ANALYSIS OF KEY PERFORMANCE INDICATOR OF PREANGER HOTEL BANDUNG BASED ON THE PERFORMANCE PRISM FRAMEWORK. By:

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By:

AVANTY ADZANNY

ID No: 19004022

ADITYA PRATOMO

ID No: 19004028

Undergraduate Program

School of Business and Management

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ANALYSIS OF KEY PERFORMANCE INDICATOR OF PREANGER

HOTEL BANDUNG BASED ON THE PERFORMANCE PRISM

FRAMEWORK

By:

AVANTY ADZANNY

ID No: 19004022

ADITYA PRATOMO

ID No: 19004028

Undergraduate Program

School of Business and Management

Institut Teknologi Bandung

Validated By

Supervisor:

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AVANTY ADZANNY

ID No: 19004022

ADITYA PRATOMO

ID No: 19004028

Date of Final Examination: 6

th

of August 2007

Date of Graduation: 27

th

of October 2007

Undergraduate Program, Bandung Institute of Technology, 2007

Advisor: Dr. Ir. Dermawan Wibisono, M.Eng

ABSTRACT

The increasing number of tourist that visits Bandung makes the competition among the hotel increase significantly. The competition became tighter because there are many new hotels and service apartments in Bandung with their own uniqueness. This condition forces the hotel management to give a better performance for the customer in order to survive in the long term. One of them is Grand Preanger Hotel.

Preanger hotel is one of Bandung’s five stars hotel and a landmark for Bandung because of its history. But until now, Preanger hotel has no strategic performance measurement system to support the improvement process. Therefore, through reviewing of such condition and using the Performance Prism framework that has been studied intensively, the proposed research is willing to develop a performance measurement framework for Preanger hotel.

This research defines Key Performance Indicators (KPI) for customer satisfaction and contribution, operations processes, operations strategies and people capabilities, in order to develop performance measurement framework. These KPI are determined from Preanger internal assessment, interview with the BOD, and their guest comments to make this performance measurement framework fit properly with the company condition.

The results for this research will be the performance measurement tool in Prism framework and its KPI to measure their performance level in order to serve the customer better. This research also purpose several recommendations for the Preanger that are gathered from their guest comments form. The recommendations will be the need of fix the parking problems, and modernizations in interior and guest room condition.

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ANALYSIS OF KEY PERFORMANCE INDICATOR OF PREANGER

HOTEL BANDUNG BASED ON THE PERFORMANCE PRISM

FRAMEWORK

AVANTY ADZANNY

ID No: 19004022

ADITYA PRATOMO

ID No: 19004028

Tanggal Ujian Akhir: 6 Agustus 2007

Tanggal Wisuda: 27 Oktober 2007

Program Sarjana, Institut Teknologi Bandung, 2007

Pembimbing: Dr. Ir. Dermawan Wibisono, M.Eng

ABSTRAK

Kenaikan jumlah pengunjung yang datang ke Bandung memicu persaingan dalam bisnis perhotelan. Persangan menjadi lebih ketat lagi dengan munculnya hotel-hotel baru dan servis apartemen di Bandung yang menawarkan keunikannya masing-masing. Situasi ini memaksa manajemen hotel untuk memberikan pelayanan yang lebih baik lagi agar dapat mempertahankan posisinya. Salah satu dari hotel-hotel tersebut adalah Grand Hotel Preanger.

Hotel Preanger adalah hotel berbintang lima dan merupakan salah satu landmark kota Bandung. Tetapi sampai saat ini Hotel Preanger tidak memilki sistem pengukuran kinerja yang stratejik untuk mendukung proses perbaikan. Penelitian ini bertujuan untuk merancang suatu kerangka kerja pengukuran kinerja yang sesuai untuk Hotel Preanger dengan menggunakan metode The Performance

Prism.

Dalam merancang kerangka kerja pengukuran kinerja, penelitian ini menggunakan Key Performance

Indicator (KPI) untuk customer satisfaction and contribution, operations processes, operations strategies, dan people capabilities. KPI ini didapatkan dari Hotel Preanger melalui wawancara dan guest comment agar kerangka kerja pengukuran kinerja ini sesuai dengan keadaan perusahaan saat ini.

Hasil dari penelitian ini adalah alat pengukuran kinerja menggunakan metode The Performance Prism dengan KPI untuk mengukur kinerja Hotel Preanger. Penelitian ini juga memberikan beberapa rekomendasi yang didapatkan dari guest comment. Rekomendasi ini mencakup perbaikan untuk area parkir, interior, dan kamar hotel.

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Performance Indicator of Preanger Hotel Bandung Based on the Performance Prism Framework can be completed in time.

There are problems and challenges to be faced and overcome in the making of this final project. But we still make it because of the support, guidence and encouragement from a number of people especially from our supervisor- Dr. Ir. Dermawan Wibisono, M.Eng.

The most important acknowledgement to all, we would like to thank:

1. Prof. Surna Tjahja Djajadiningat, Ph.D, as Dean of School of Business and Management. 2. All the lectures, tutors, staff of SBM who always guide us from the beginning of the

semester.

3. Grand Hotel Preanger Bandung, especially Mr. Rai and Mrs. Wati. 4. All of our friends, SBM 2007, for supporting us.

5. Our beloved families for their patience and support as we wrote this final project. 6. And to my beloved boyfriend, Ikal, for the encouragement, insight, and strong support.

Sincerely Bandung, August 2007

Avanty Adzanny Aditya Pratomo

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LIST OF CONTENTS

VALIDATION PAGE ... i ABSTRACT... ii ABSTRAK...iii PREFACE ... iv LIST OF CONTENTS ... v LIST OF FIGURES ... vi

LIST OF TABLES ... vii

LIST OF APPENDIXES...viii CHAPTER 1 INTRODUCTION 1.1 Background ... 1 1.2 Company Profile ... 2 1.3 Problem Formulation ... 4 1.4 Objectives ... 4 1.5 Scoop of Problems ... 4 1.6 Report Online... 4 1.7 Methodology ... 6 CHAPTER 2 2.1 The Fundamental Definition ... 7

2.2 Performance Measurement purposes. ... 8

2.3 Performance Measurement frameworks ... 9

2.4 The performance Prism... 10

2.4.1 Stakeholders Satisfactions ... 12

2.4.2 stakeholder Contributions ... 13

2.4.3 Strategies... 14

2.4.4 Processes ... 15

2.4.5 Capabilities ... 17

2.5 Challenges in Performance measurement ... 18

CHAPTER 3 METHODOLOGY 3.1 Methodology ... 19

CHAPTER 4 DATA ANALYSIS 4.1 Preanger’s Guest Comment ... 21

4.1.1 Reception and Service... 21

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4.2 Prism variable study... 27

4.3 Prism Variables selection... 29

4.3.1 Stakeholder Satisfaction and Contribution ... 30

4.3.2 Operations Strategies. ... 33

4.3.3 Operations Processes ... 35

4.3.4 People Capabilities... 37

4.4 New Prism Variables addition ... 37

4.5 Prism Variables validation. ... 40

4.6 Prism Design... 43

CHAPTER 5 CONCLUSION AND RECOMMENDATION 5.1 Conclusion ... 49

5.2 Recommendation. ... 54

REFERRENCES... 55

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LIST OF FIGURES

Figure 1.1 Organization Structure ... 3

Figure 1.2 Research Work Flow ... 6

Figure 2.1 The Performance Prism ... 10

Figure 2.2 Performance Prism Unfolded Schematic ... 12

Figure 2.3 Stakeholders Satisfaction and Stakeholders Contribution ... 13

Figure 2.4 The Role of Measurement in Strategy Creation and Execution ... 15

Figure 2.5 The Four Common Characteristic of Processes ... 16

Figure 2.6 The Components of Capabilities ... 17

Figure 3.1 Detailed Research Work Flow ... 20

Figure 4.1 Spider Diagram of Reception and Services ... 22

Figure 4.2 Spider Diagram of Guest Room ... 23

Figure 4.3 Spider Diagram of Preanger Lounge ... 24

Figure 4.4 Spider Diagram of Preanger Specialties Restaurant ... 25

Figure 4.5 Spider Diagram of Preanger Restaurant ... 26

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Table 1.2 Grand Preanger Hotel Brief Histories ... 3

Table 4.1 The Performance Prism Sub Facets ... 28

Table 4.2 Selected Preanger Performance Variables ... 29

Table 4.3 Validated Prism Variables ... 40

Table 4.4 Ranked Prism Variables ... 41

Table 4.5 Prism Variable Criteria ... 42

Table 4.6 Variable Scores ... 44

Table 4.7 Hotel X’s Scores ... 46

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LIST OF APPENDIXES

SPSS Data ... 56 Preanger Guest Comment ... 58 Bandung City Map ... 59