The Impact of an Operational Information System Design when

Controlling the Operational Costs of an Urban Rail Transit System in

Surabaya

Debby Ratna Daniel, Ivana Laksmono, Rizka Baby Hermanto

Faculty of Business and Economic, Airlangga University,Dharmawangsa,Surabaya, Indonesia

debby-r-d@feb.unair.ac.id, {ivanalaksmono88,bebyhermanto}@gmail.com

Keywords: Operational Costs, Operational Information System (OIS), Urban Rail Transit System.

Abstract: Urban rail transit systems are excellent systems that should be used in Indonesia, especially in the city of

Surabaya. This type of transportation system is currently being planned by the Surabaya city government.

This planning has resulted two ideas for future transportation systems: “Boyo Rail” for the monorail system

and “Suro Tram” for the tram system. The presence of these two new transportation systems is expected to

help the government solve the congestion problem in the city of Surabaya. This research will help the

government to determine the selling price of tickets for each passenger through an operational information

system (OIS) whose design is based on the operational costs required to support the success of the urban rail

transit system in Surabaya. This research used a qualitative approach to answer the question with using the

literature on the subject in order to create an operational information system that can control operational

costs. The results of this research will be used to compare the costs-of-goods-sold (COGS) report, the

income report and the internal control of operational costs.

1 INTRODUCTION

Surabaya, as the capital city of East Java and the

second biggest city in Indonesia, has a population

that reached over 2.7 million in 2010 and a wide

territory of up to 326,81 km² (Surabaya Central

Bureau of Statistics Department, 2010).

Rismaharini, the current mayor of Surabaya, stated

that this city is a major growth center for the East

Indonesian region’s manufacturing and agricultural

sector (Rismaharini, 2008).

Furthermore, Surabaya can be classified as the

busiest city in Indonesia, where congestion has

become a major problem. This problem has

happened due to the increasing number of vehicles

in the city; there were 1,368,000 vehicle units in

2008, then increasing by 31.53% four years later

(Surabaya Central Bureau of Statistics Department,

2014). The escalation of vehicle numbers has

resulted in two consequences: 1) a decrease in the

average vehicle speed (from 34.31 kph in 2010 to

28.96 kph in 2014) and 2) the appearance of both

material and non-material losses, where the

material loss caused by congestion reached Rp.

2,530,654,563,00 in 2012 and non-material losses

caused some bad social and environmental

impacts.

Therefore, a strategic plan has been created by

the current government in an effort to solve the

ongoing problem by developing the transportation

system (Rismaharini, 2008). Based on information

from the Surabaya Development Infrastructure

(2015), Rismaharini has planned three strategies

with which to develop the Surabaya transportation

system (Fig. 1). Developing mass transportation

systems, particularly the monorail (MRT), is the

Surabaya city government’s initial plan. Suro

Tram and Boyo Trail are the two new concepts in

the transportation system offering to improve mass

transportation in the city.

216

Daniel, D., Laksmono, I. and Hermanto, R.

The Impact of an Operational Information System Design when Controlling the Operational Costs of an Urban Rail Transit System in Surabaya.

In Proceedings of the Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study (JCAE 2018) - Contemporary Accounting Studies in

Indonesia, pages 216-223

ISBN: 978-989-758-339-1

Figure 1: The Development of Transportation in

Surabaya (2015)

In summary, the main focus of this study is

how to control the operational costs of mass public

transportation, particularly for urban rail transit

systems (Suro Tram and Boyo Rail) by

implementing operational information design.

Further research about budgeting can be conducted

in order to manage all the costs and to generate

more profits in relation to the introduction of a

new transportation system.

1.1 The Limitations of Research

There are two limitations to the findings of this

research process. These are as follows:

1) The report examining the operational costs

related to Suro Tram and Boyo Rail cannot be

obtained and analyzed due to confidentiality

reasons (according to the Surabaya Ministry of

Transportation).

2) There is a lack of previous research related to

the operational design of public transportation

in Indonesia. This would have been useful as a

supporting reference when designing a new

operational system that is more suited to

today’s needs.

2 LITERATURE REVIEW

2.1 Previous Research

Previous studies which usinh in this subject

derived from twelve journals, both international

and local. Decision making when setting the

selling price of transportation tickets can be

measured by assessing the operational costs

incurred during the activities (Hermanto and

Daniel, 2017). The measuring of operational costs

can be recouped through the design of an

operational information system. This system can

include suitable sub-systems, such as an

accounting information system to collect driver

transaction data, an operational engineering

subsystem to obtain procedural data, and an

operational intelligence subsystem to collect

external data to act as a reference for operational

design (Fitriani and Daniel, 2016).

It has also been shown that an operational

information system is very useful to a

transportation system, in that it can manage the

maintenance costs (Gunawan et al., 2017).

Operational costs in public services are affected by

the complexity and the predictability of the

system; as such, cost behavior must be determined

as it can affect stakeholder decisions when using

such services (Estrada et al. 2017). An operational

information system should be designed in a way

that allows it to support standard operational

procedures (Handika et al., 2017).

The measurement of the operational costs of an

urban rail transit system can be divided into three

periods. There are: (1) when the new network is

going through the application process; (2) before

the urban rail transit system is operational; and (3)

while the urban rail transit system is operational

(Shang and Zhang, 2013). The performance of an

operational public transport service can be valued

by analyzing all the supporting factors; which will

become the minimum standards (Ismiyati et al.,

2016).

The characteristics of public transport users or

passengers are strongly influenced by their travel

routes (Currie and Delbosc, 2013). The increasing

cost of public transport can be caused by the need

to repeatedly transfer between different modes of

transportation in order to reach a destination

(Kumar et al., 2013). The evolution and

development of a transportation line (i.e., a

subway) will improve the efficiency of passengers’

transportation and remove the pressure on

passengers’ movements (Zhu and Luo, 2016).

The development of a public transportation

system cannot be separated from the development

of spatial urban areas (Kołoś and Taczonowski,

2016). Finally, an operational information system

should be applied to the current transportation

system in order to maximize operational

performance, especially in the terms of the total

travelled distance, the number of passengers

carried, energy consumption, and operational

profit (Teoh et al., 2017).

The Impact of an Operational Information System Design when Controlling the Operational Costs of an Urban Rail Transit System in

Surabaya

217

2.2 Internal Control

Internal control is a process designed by a board of

directors, management and other personnel in

order to foster confidence in the achievement of

their goals (Boynton and Johnson, 2006). There

are five elements of internal control: the control

environment, risk assessment, information and

communication, control activities, and monitoring.

2.3 Cost

Systematic, comparative and analytical earning

data can be used to determine the profit target, the

departmental target for middle and operational

management, the effectiveness of the planning, the

operational performance, the strategy selection,

and the corrective action (Carter, 2009). Carter

also states that the controller role is needed to

control and to plan all costs by coordinating all

management levels.

2.4 Operational Information System

An organizational system is responsible for

transforming things such as goods or services from

input to output (Stevenson and Chuong, 2014).

This system will be used to summarize and

translate integrated operational flows (Fitriani and

Daniel, 2016). In addition, an operational

information system can describe a business activity

or event, recording it and helping to manage all

transactions (Smith, 2000).

When designing a good operational system for

a transportation system, Khisty and Lall (2006)

state that there are eight focuses that need to be

considered in order to evaluate the system’s

performance. These are as follows:

1. Cost efficiency. This focus will compare the

total operational cost (TC) and the total vehicle

revenue (TRV) based on the size of the area

(miles) or the time spent (hours). The

calculation formula is:

Operational costs

er vehicle revenue

TC / TRV

2. Worker productivity. This focus will compare

the total vehicle revenue per hour (TR) or per

miles (TRV) and the number of staff (TS), as

follows:

otal vehicle

evenue per staff

embe

TR / TS

3. Vehicle utilization. This focus will consider

factors such as the total vehicle revenue (per

miles or per hour) (TRV), the total number of

passengers (TP), and the number of vehicles

(TV). The calculation formula is:

Total vehicle

revenue per

vehicle

TR / TV

Total number of

passengers per

vehicle

TP / TV

4. Energy efficiency. This focus applies two

calculation components: the total energy

consumption (TEC) and total vehicle revenue

(per miles or per hour) (TRV). The calculation

formula is:

Total energy

consumption per

total vehicle

revenue

TEC / TR

5. Size of service utilization. This focus

considers three elements: the total revenue

every passenger (TRP), the total vehicle

revenue per miles (TRV), and the total

population of the service area (TSA). The

calculation can be formulated as follows:

Total revenue every

passenger per

vehicle revenue per

miles

TRP / TRV

Total revenue per

passenger per the

population of the

service area

TRP / TSA

6. Accessibility. This focus measures the

percentage of the service used based on the

total population of the service area (TSA) and

the total population of area covered by this

service (TSC), as follows:

The percentage of

the population in

the service area

TSA / TSC

JCAE Symposium 2018 – Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study

218

7. Service quality. This focus considers the total

number of on-time trips (TOT), the total

number of trips (TT), the total vehicle

revenue per miles (TRV), and total square

miles of the area served (TAS). The

calculations can be explained as follows:

Reliability of the

ste

: TOT / TT

Total of vehicle

revenue per miles

per total square

miles of area serve

TRV / TAS

8. Financial performance. This focus measures

the operational costs based on the total

operational revenue (TOR), total operational

costs (TC), total number of trips (TT), and

total number of passengers per miles (TP).

The calculations can be explained as follows:

Operational

atio

: TOR / TC

Operational cost

of each

assen

er trip

TC / TT

Operational cost

of each

passenger

(miles)

: TC / TP

3 RESEARCH METHODOLOGY

This current research applies a holistic single case-

study through a literature observation method.

Several components will be used to compile the

current research (Yin, 2012):

1. Research question

This research will focus on the design of an

operational information system. This will

produce output in the form of operational cost

controlling for an urban rail transit system;

specifically, Suro Tram and Boyo Rail. The

basis of the current research question is “How

can the design of an operational information

system be applied to control the operational

costs incurred by an urban rail transit system?”

2. Unit of analysis

Previous research serves as the unit of analysis

in this current study. Furthermore, the analysis

was conducted by studying the operational

costs of an urban rail transit system or light rail

transit system that have been incurred by such

transport systems in other cities across the

world.

3. The logic that links data with propositions

A transaction process system will generate

accounting information related to operational

costs such as recruitment costs, maintenance

costs, payroll systems, investment costs, utility

costs, and other costs that are linked to

operational cost control.

4. The criteria for interpretation of the findings

This current research used some theories to

design an operational system that can control

the operation of an urban rail transit system

(specifically, Suro Tram and Boyo Rail). The

theories consider accounting information

systems, transaction processing systems,

management information systems, and

operational management systems.

4 ANALYSIS

4.1 A General Overview of The

Planned Urban Rail System

Surabaya Government is planning a new

breakthrough transportation system in the form of

a fast mass-transit service. This type of system is

generally known as an urban rail transit system.

This consists of two types of public transport: Suro

Tram (the monorail product) and Boyo Rail (the

tram product).

Fig 2 shows a diagram by Array Motor

Blogspot (2014) which explained that Suro Tram

will pass the route from west to east (17.4 km) that

have 25 stops, and Boyo Rail will cross from

northern route to southern route (24km) which

have 29 stops.

This new transportation system project is still

entering the investigation phase and the project

team is in the process of constructing the

prequalification documents that will determine the

bidders. Investment in the project, which has

reached ten trillion rupiah , includes the station

construction costs, the track and construction costs,

the transport stop costs, socialization costs, design

costs, study and supervision costs, fleet costs, and

depo charges.

The Impact of an Operational Information System Design when Controlling the Operational Costs of an Urban Rail Transit System in

Surabaya

219

Figure 2: A Route Map Showing the Routes taken by

Suro Tram and Boyo Rail (2014)

Furthermore, the successful of urban rail transit

system in Surabaya will be reached when it can

fulfill the three requirements (Ristia,2009) as

follows:

1. There is an integration of supporting systems

such as feeder system and non-motorized

transport system especially for bicycle and

pedestrian path

2. There is an healthy institution of provision in

public transport with the transparently licensing

mechanism and giving priority to the high

quality of service

3. There is a well-preparation and well-socialize

stage to the public. The socialization material

must cover the reason of every action taking

and anticipation efforts by government for

every consequences facing by society relating

with the implementation

4.2 The Planned Operational Costs of

Urban Rail Transit System in

Surabaya

The operational costs of an urban rail transit

system cannot be separated from the capital costs

(which usually cover all planning and construction

costs) (Wright and Fjellstorm, 2002). These costs

depend on a multi-level separation and a special

path extension (e.g. special geological conditions

and the material costs of building and labor). There

are some factors that can affect these costs:

1. Dominant factors:

a. Costs of quality management or

organization

b. Costs of a new system or progressive

expansion of the current system.

2. Important factors:

a. Cost of land maintenance (construction and

foundation)

b. Costs of topography (error costs, insurance

costs, etc.)

c. Design costs

d. Utilization costs (water, electricity, etc.)

e. Cost of funding.

3. Moderately important factors:

a. Land costs

b. Cost of supplying the tools needing for

construction

4. Minor factors:

a. Labor costs

b. Tax and liability costs

c. Cost of supporting facility systems (air-

conditioners (AC), special access,

televisions, etc.).

Some operational costs depend on the number

of vehicles needed to provide the service. The

higher the speed of the operation, the lower the

circulation period; this will affect the number of

vehicles needed for a single-line service.

Based on a World Bank study, there are some

aspects that can be used as standard parameters to

determine the operational costs incurred by an

urban rail transit system (Hefrianto, 2008). These

can be explained as follows:

1. The average number of passengers which can

be carried by every vehicle in a day

2. The number of vehicles operating in peak hours

3. The average speed of the vehicles in a day

4. The number of vehicles in maintenance

5. The consumption of the engine in each of the

vehicles

6. The number of workers

7. The length of the route travelled

8. The service costs of the vehicles (operational

costs, depreciation costs, etc.)

The total amount of income earned.

5 CONCLUSIONS AND

RECOMMENDATIONS

5.1 Conclusion

Based on the results of our analysis, we can

conclude that, in order to be effectively managed,

an urban rail transit system must be supported by

an integrated operational information system.

An integrated operational system has some

advantages, such as:

JCAE Symposium 2018 – Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study

220

1. It can manage the calculation of the operational

costs more accurately and effectively

2. It can measure the selling price of passenger

tickets effectively

3. It can produce reports related to the operational

system, such as operational reports, cost-of-

goods-sold reports, etc.

4. It can measure the operational performance and

service offered by the transit system

5. It can increase the effectiveness and efficiency

of resources, thereby affecting operational

performance

6. It can control the operational costs, budget

costs, and control costs.

5.2 Reccomendation

The recommendation that can be applied to control

operational costs from urban rail transit system in

Surabaya is using E-Budgeting to control the

operational cost. This can be generated by

implementing an operational information system.

Therefore, we suggest a design of Entity-

Relationship Diagram (ERD) to create a good

operational information system to be used by

Surabaya Government (fig 3). As the beginning,

this design is started by using master data relating

with information needed and stored as a database.

Then, this database will be processed by system to

generate some reports i.e.: Sales Budget, Cost of

Goods Sold, Budget Control, and Cost Control.

Therefore, the result of ERD system can be

functioned to evaluate the operational system

performance such as : cost efficiency, worker

productivity, vehicle utilization, energy efficiency,

size of service utilization, accessibility, service

quality, and control the operational costs.

The Impact of an Operational Information System Design when Controlling the Operational Costs of an Urban Rail Transit System in

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