Improvement of Non-Business Development (NBD) Investment Proposal System Through a Pre-Proposal System at PT Pertamina Hulu Rokan

PT Pertamina Hulu Rokan has experienced a decline in net profit, while new work proposals and carry-over (CO) projects have continued to rise. This trend raises concerns about resource management and operational efficiency, requiring an effective solution. This research aims to develop a pre-proposal system using risk-based and workload analysis to prioritize and evaluate Non-Business Development (NBD) investment proposals. The system ensures alignment with strategic objectives and resource capacity. The study introduces a structured pre-proposal process to filter and prioritize proposals at an early stage. The system focuses on critical and feasible projects by applying risk and workload evaluations while reducing redundancies. The research aims to optimize decision-making and align investment proposals with corporate strategies. The methodology includes Business Process Modeling Notation (BPMN) simulations to analyze workflow inefficiencies and Focus Group Discussions (FGD) with stakeholders to refine the system. A trial of the pre-proposal tools for the 2026 Work Plan and Budget (RKAP) demonstrated their effectiveness in managing and prioritizing proposals. The results show that the pre-proposal system reduces incoming proposals from 299 work plans to 232 work plans, a 22.4% decrease. Proposals are categorized into P1 (very high priority) and P2 (high priority) for follow-up, ensuring resources are directed toward impactful projects. This research provides a practical framework for early-stage proposal assessment, enhancing decision-making and investment planning. The system demonstrates the potential to improve efficiency, reduce redundancies, and better align proposals with organizational goals, offering a valuable tool for managing future investment initiatives.

Introduction

From 2021 to 2023, PT Pertamina Hulu Rokan (PHR) experienced a significant rise in Non-Business Development (NBD) investments, focusing on maintaining company value and achieving strategic objectives in areas such as HSSE, equipment integrity, and maintenance. In 2023 alone, the number of newly proposed NBD projects reached 341, valued at 540.75 MUSD, while carry-over projects—those exceeding their initial schedules—totaled 342 projects worth 313.28 MUSD. This upward trend in New Proposed Projects (UB), exceeding 300 RKs, has necessitated increased financial resources, more review staff, and extended discussion times, particularly in transitioning from initiation to the Technical Review Meeting (TRM 2). The growing scale and complexity of these operations underscore the heightened demands on the company’s evaluation processes and resource management.

Established on December 20, 2018, PT Pertamina Hulu Rokan (PHR) manages the Rokan Working Area (WK) as an operator for 20 years from August 9, 2021, to August 8, 2041, while also overseeing upstream oil and gas activities in Regional 1—Sumatra under Pertamina’s Upstream Subholding. As one of Indonesia’s major oil and gas producers, PHR plays a vital role in the national energy supply, with Regional 1 spanning Aceh to South Sumatra and divided into four zonas covering 20 fields, including WK Rokan in Zonas 2 and 3. Within this vast operational scope, the coordination of ABI NBD proposals falls under the OSF (Operations & Surface Facilities) Function, precisely, the SF Planning & Support Sub-Function, which faces significant challenges. With only six organic employees tasked as reviewers, the team must handle over 300 annual Work Program (RK) proposals, adding pressure to the already demanding review and evaluation process.

PT Pertamina Hulu Rokan (PHR) faces a growing challenge in managing investment proposals due to an increasing number of carry-over (CO) projects and new submissions, projected to escalate from 697 projects in 2024 to 955 by 2027 if current methods persist. This accumulation strains resources, impacts cash flow, and risks production losses from delayed project completions. Root cause analysis using the 5 Whys technique reveals the absence of a structured filtering mechanism and tools to provide a comprehensive overview of company-wide needs, leading to subjective proposal prioritization and misalignment with strategic objectives. Stakeholder analysis highlights the need for tailored engagement strategies, with high-power, high-interest stakeholders like the Proposing Team and Sr. Manager OSF Regional 1 requiring active collaboration. In contrast, others, such as the Finance Division, need minimal attention.

This research seeks to identify and design a practical and effective tool to enhance the business process for proposing Non-Business Development (NBD) investment projects, ensuring alignment with strategic objectives without compromising operational needs. The study addresses key questions, including how to improve the business system to effectively filter, prioritize, or categorize investment proposals and how to ensure that the proposed solution is both practical and feasible for implementation. By focusing on these objectives, the research aims to streamline proposal evaluations and support more strategic decision-making.

This research is focused on the business process of proposing NBD investment projects in Regional 1 with a specific limitation on resource management—encompassing time, cost, and personnel in the surface facilities planning division of PT Pertamina Hulu Rokan Regional 1.

Literature Review

Theoretical Foundation

PT Pertamina Hulu Rokan Regional 1 manages Non-Business Development (NBD) investment proposals in accordance with the Pertamina Upstream Development Way (PUDW) Management Guidelines No. A3-001/PHE24000/2021-S9 Rev. 1, which provides a standard framework for planning and managing upstream oil and gas projects across Pertamina’s Upstream Subholding and its subsidiaries. Regional 1 applies its specific Operational Procedure (TKO) No. B6-001/PHR23300/2023-S9 Rev. 0, focusing on NBD investments aimed at maintaining company value and achieving strategic objectives, such as asset restoration, equipment replacement, and HSSE equipment procurement. Investment costs (CAPEX) encompass construction and pre-construction expenses, as well as management-related costs, excluding taxes, sunk costs, IDC, and funding expenses. New work proposals are classified as New Proposals (UB), while projects exceeding their committed timelines are categorized as Carry Over (CO).

Business process modeling serves as a tool to convey diverse information to various audiences and is adaptable to multiple modeling objectives. BPMN (Business Process Model and Notation) supports creating both process segments and end-to-end business processes at varying levels of detail. Internal (Private) Business Processes, typically represented in a Business Process Diagram (BPD), focus on the perspective of a single organization, detailing activities that are not publicly visible. These processes often illustrate interactions with external participants while remaining confined to a single Pool, with Sequence Flows restricted within the Pool boundaries. Message Flows can extend beyond the Pool to depict interactions between distinct internal business processes, enabling a BPD to represent multiple private processes concurrently (White, 2004).

Kepner-Tregoe decision analysis, developed by Charles H. Kepner and Benjamin B. Tregoe in the 1960s, is a structured methodology for gathering, prioritizing, and evaluating information, with a particular emphasis on risk assessment (Lunenburg & Bougie, 2010). The process involves several systematic steps: defining the decision to ensure clarity and alignment among stakeholders, setting SMART objectives, and categorizing objectives into essential (“musts”) and desirable (“wants”). Weights are assigned to “wants” to quantify their importance, and all potential alternatives are identified and evaluated against the “must” criteria to filter out unsuitable options. The remaining alternatives are then compared based on the “wants” criteria and their assigned weights. A thorough risk analysis examines potential challenges for each option, assessing their likelihood and impact. Finally, the best alternative is chosen, considering objectives, risks, and relevant factors, followed by the development of contingency plans and monitoring mechanisms to address potential implementation issues (Kusmono, 2024).

The commitment of PT Pertamina Hulu Energi as Subholding Upstream, outlined in its HSSE Policy, emphasizes safe, healthy, environmentally friendly, and efficient operations by applying high standards in managing HSSE aspects. Central to this policy is HSSE Risk Management, which includes hazard registration, risk assessment, and risk review. Hazard registration involves documenting occupational and process hazards that could affect health, safety, the environment, and stakeholders. Risk assessment entails analyzing hazards to determine their likelihood and severity, followed by implementing controls to mitigate risks, with findings documented for continuous monitoring. Risk review ensures that residual risk management aligns with best practices. Effective risk assessments require thorough hazard identification, accurate risk analysis, and qualified personnel to reduce uncertainties and ensure safety measures align with corporate and operational goals. Reference to detailed procedures can be found in Individual Work Procedures (TKI) Preparation of All Risks and Top Risks No. C12-006/PHR45110/2023-S9.

The Eisenhower Matrix, a productivity and time management tool, aids teams in organizing tasks by urgency and importance, focusing efforts on high-priority activities (SPS Academic Resource Center (n.d.)). Popularized by Stephen Covey in The 7 Habits of Highly Effective People and inspired by Dwight D. Eisenhower, the matrix categorizes tasks into four quadrants: Urgent and Important (requiring immediate attention, such as crises), Important but Not Urgent (long-term goal-oriented tasks to be scheduled), Urgent but Not Important (non-essential demands or interruptions), and Neither Urgent nor Important (low-value distractions). Emphasizing tasks in Quadrants I and II while reducing time spent in Quadrants III and IV enhances productivity and ensures alignment with strategic objectives (Covey, 2020).

Conceptual Framework

In this research, conceptual framework outlines the systematic approach to addressing the issue of the increasing number of proposed investment work plans. The process uses analytical tools to identify the problem, explore its root causes, propose alternative solutions, and identify the best approach to achieve the desired target. The conceptual framework is shown in Fig. 1.

Fig. 1. Conceptual framework.

The primary goal of this conceptual framework is to provide an effective tool in the early stage of proposed investment work plans with categorization or prioritizing to assess the feasibility of investment so that the proposals align with organizational needs.

Methodology

According to Saunders et al. (2016), methodology refers to the theoretical framework guiding research conduct, where research itself is a systematic process aimed at uncovering new knowledge. Research design, as defined by Sekaran and Bougie (2016), provides a comprehensive framework for data collection, measurement, and analysis, ensuring validity and reliability in addressing research questions. This study integrates qualitative and quantitative approaches, utilizing primary data from focus group discussions and secondary data from internal documents, articles, and books. Data analysis employs qualitative methods and simulation to develop tools to enhance the business process for proposing NBD investment projects, aligning them with strategic objectives.

As shown in Fig. 2, the problem of this research is no tools available to provide a comprehensive overview of the company’s requirements. This problem is need to be solved, by finding the tools that will enhance the business process for proposing NBD investment projects, ensuring that they are accurately aligned with strategic objectives. The data collection for this research will involve both primary and secondary data. Primary data will be gathered through focus group discussions (FGDs) with Subject Matter Experts (SMEs) at PT Pertamina Hulu Rokan Regional 1. The FGDs will use a semi-structured interview approach, allowing the interviewer to explore themes related to NBD investment projects, trend analysis, and the root causes of challenges. This method enables flexibility, in-depth exploration, and the generation of interactive discussions that contribute to practical solutions. Secondary data will be collected from internal assignments, company procedures, the company website, and a literature review. The annual NBD reports for 2021 to 2023, which include data on project trends, budget allocation, carry-over issues, and resource demands, will also be used to support the analysis. The combination of these data sources ensures a comprehensive understanding of the challenges and potential strategies for improving NBD investment projects.

Fig. 2. Research methodology.

Data analysis methods encompass strategies to organize, interpret, and derive meaningful insights from raw data. In this final project, a combination of quantitative and qualitative data analysis methodologies will be employed. Quantitative analysis provides objective insights, enabling the testing of hypotheses and quantification of correlations among variables, while qualitative analysis, such as thematic analysis, focuses on understanding the context and subjective experiences of participants (Bertin, 1978; Mileset al., 2014). The thematic analysis moves beyond merely counting explicit words and aims to identify and describe both implicit and explicit ideas within the data. The research will begin by examining company procedures related to the investment proposal process. This will be followed by a BPMN simulation of the current system to assess cycle time, task time, and waiting time. The results of the focus group discussions will help in designing a tool for the pre-proposal phase, with the data being disassembled into meaningful groupings before being reassembled to analyze the effectiveness of the proposed tool and system. Finally, the interpretation phase will conclude the data to answer the research questions.

Results and Discussion

Analysis

The analysis is conducted in stages based on the conceptual frameworks, beginning with an evaluation of the BPMN simulation results for the existing ABI NBD proposal process. This is followed by correlating the identified bottleneck factors with the insights obtained from Focus Group Discussions (FGD) involving Management and the Regional 1 Review Team.

Simulation of BPMN Existing

Fig. 3 shows the BPMN simulation for the existing ABI NBD proposal process in Regional 1, which provides a visual representation of the workflow and key stages involved.

Fig. 3. BPMN process for NBD Investment Proposal in Regional 1.

The simulation of the investment proposal process highlights key stages, including problem identification, proposal evaluation, technical reviews, risk and cost-benefit analysis, and decision-making at the management level, serving as the foundation for identifying inefficiencies and bottlenecks. The BPMN diagram, using swim lanes, illustrates the internal process within Pertamina Hulu Rokan, starting from problem identification at the field level and progressing through various stages, such as technical review meetings (TRM-1 and TRM-2), risk and cost-benefit analyses, and the final gate review at the management level. Each team—Field, Zona, Technical Team, and Management—has clearly defined responsibilities throughout the process. After the technical reviews, proposals are either deemed unviable or move forward for detailed analysis. Following risk assessments and cost-benefit evaluations, the proposal undergoes a final review before management decides on approval or rejection. The BPMN model allows for the analysis of transaction and activity statistics, offering insights into the efficiency of the NBD investment proposal process and identifying areas for improvement.

Once the business process has been modeled in BPMN, we can examine the simulation results (Fig. 4), which provide transaction and activity statistics for the investment proposal process in Non-Business Development (NBD). The simulation of the Non-Business Development (NBD) investment proposal process reveals significant inefficiencies, especially in terms of waiting times, with 76% of the total process duration attributed to delays. The total elapsed time is 25.20 weeks, with 6.05 weeks spent on work time and 19.15 weeks on wait time. Key bottlenecks are identified, particularly in the Technical Review Team, which has the longest cycle time of 18 weeks and a wait time of 13.71 weeks. The analysis highlights inefficiencies across various stages, including Field, Zona, and TRM-2, where wait times represent a substantial portion of the cycle. The Management stage, while efficient, still faces delays due to dependencies on prior steps, particularly in the Gate Review phase, which experiences a 10.67-day wait time. The findings suggest that inter-departmental communication, resource allocation, and process optimization are critical areas for improvement to streamline the overall process.

Fig. 4. Simulation results of transactions in the BPMN process for NBD investment.

Results of FGD

The results of the Focus Group Discussion (FGD) indicate several challenges and areas for improvement in the company’s project proposal system. Both management and team reviewers agree that the current procedures, based on the PUDW Revision-2 and TKO, are effective but time-consuming, particularly at the Zona level, where the TRM-1 Phase filtering process is considered efficient. However, the Zona teams lack adequate tools for evaluating proposals. Critical projects for the company include those that impact HSSE, LPO, and strategic goals like asset restoration and operational excellence. Data collection challenges were highlighted, including inconsistent sources, missing key metrics, and integration issues, which delay the process. Moreover, operational challenges, such as the time-consuming nature of work plan discussions and late data collection, contribute to delayed decision-making. For improvement, suggestions include implementing a filtering system during submission and requiring approval from Function Heads to streamline the process.

The findings from the Focus Group Discussion (FGD) and BPMN simulation of the NBD investment proposal process in Regional 1 highlight several key inefficiencies, with the Technical Review Team (TRT) identified as the primary bottleneck due to the lack of practical evaluation tools and unintegrated data, leading to prolonged delays. The dependency between TRT and TRM-2 stages further exacerbates the delays, as incomplete or misaligned data from a single function slows validation in TRM-2. Both the simulation and FGD results point to significant waiting times, accounting for 76% of the total process duration, primarily driven by inefficient work plan discussions, high proposal volumes, and delays in data collection. These insights suggest that addressing the root causes of delays—namely inadequate early evaluation tools, inconsistent data, and limited cross-functional collaboration—through improved filtering mechanisms and data readiness could streamline the process, reduce bottlenecks, speed up decision-making, and enhance overall process efficiency, aligning with the organization’s strategic objectives.

Business Solution

From the correlation between the FGD results and BPMN simulation in identifying and developing solutions to the business issue, the following business solution is proposed for this research. This sub-chapter will refer to the FGD results in the Do and Check steps. The Do step will create the most suitable design tools with the current company conditions. While for the Check step, it will see whether there is a system improvement from the developed tool or not.

Design Tool for Pre-Proposal Stage (Do)

The research suggests implementing a Pre-Proposal Stage to assess whether a work plan proposal is feasible to be considered as an Investment Work Plan. The Pre-Proposal stage serves as the initiation phase, during which risk assessments and workload evaluations for each proposal are conducted. The output of this Pre-Proposal stage is the prioritization of proposals, which will determine the Frozen Scope.

The pre-proposal tool in the evaluation form includes several key elements to ensure a comprehensive assessment of investment proposals. Element I, Project Title, requires the project name to follow the B-A-D principle, explaining the type of investment activity (How), the unit or equipment involved (What), and the investment location (Where). The threshold represents the investment approval authority limit in the Subholding Upstream, as specified in decree number 015/PHE0000/2023-S0. Element 2 focuses on Investment Classification (NBD), with the threshold defined in the same decree. Element 3, Work Plan Classification, involves conducting a Risk-Based Analysis, gathering data on factors such as Loss of Production Opportunity (LPO), risk events, and budget and realization data. This analysis categorizes risks into Quantitative and Qualitative impacts. The Quantitative category involves identifying risk events, explaining their causes, and calculating impact values based on LPO avoidance, using global oil and gas prices to assess financial impact. The Qualitative category focuses on risks that are more challenging to quantify financially, considering expert judgment and non-financial impacts, such as higher costs from potential risk events.

The probability value can be calculated with this formula:

• If historical data exists:

(1) $$\begin{array}{rcl}& & ProbabilityIndex\\ & & =\frac{Frequencyofpastevents}{populationofincidentdataincalculations}\\ & & \times 100\mathrm{\%}\end{array}$$

• If historical data doesn’t exist, can be defined from expert judgment based on criteria (Probability Scale).

Risk Priority Number (RPN) is obtained by multiplying the value of the impact scale with the value of the probability scale. RPN value > 9 is categorized as High Risk (H), while RPN value < 9 is categorized as Low Risk (L).

The Work Load Analysis (WLA) is a calculation designed to determine the workforce required for project implementation. To calculate the WLA, several factors must be considered: first, the technical discipline involved in the work; second, the output of the work, which can be a document or an activity, referred to as “A”; third, the job time for each task, assuming an 8-hour workday, labeled as “B”; and fourth, the target number of working days required to complete the disciplinary activities, represented by “C”. Based on these calculations, if the WLA value is greater than or equal to three, it is categorized as High (H), while values less than three are classified as Low (L).

(2) $$\begin{array}{r}WLAValue=\frac{\left((A_1\times B_1+A_n{B}_n)\right)}{8\times C}\end{array}$$

Based on the findings from the Risk-Based Analysis and Work Load Analysis, a frozen scope of the project has been identified. To prioritize projects, the Risk Priority Number (RPN) and Work Load Analysis (WLA) values are compared as shown in Fig. 5. Projects categorized as having a P1 and P2 value are deemed as having a frozen scope and will proceed to the next selection stage, which is the TRM-1 process. This approach ensures that projects with the highest risk and workload demands are appropriately evaluated and prioritized for further review and decision-making.

Fig. 5. The Eisenhower Matrix of Pre-Proposal.

This section details the usage of contracts and LPO avoidance associated with the project, which is vital for managing project resources and expenditures. It includes contract numbers and names, such as “QA/QC Engineering Planning Services in Surface Facilities Asset 1 Function,” along with the allocated contract value, totaling USD 1,200,000.00. This amount represents the total expenditure for contracts related to this activity. Additionally, the LPO Avoidance section quantifies potential production loss prevented through executing the work plan. The LPO categories include loss due to non-execution of the work plan (7518 BO and 1503 MSCF) and no production loss during execution. Lastly, the Approval section ensures that the work plan proposal is reviewed and approved by the engineer, reviewer, and function leader, ensuring validation, accountability, and proper management of investment proposals.

Implementation Plan and Justification

In general, for future investment proposals, the process system proposal will be outlined as in Fig. 6.

Fig. 6. Investment proposal system for NBD in Regional 1.

Enhancements are being introduced to improve the effectiveness and efficiency of the investment proposal system in NBD Regional 1. The current system, which consists of initiation, selection (Technical Review Meeting-1), and advanced review (Technical Review Meeting-2), will be complemented by a new stage: Pre-Proposal (Preliminary Submission). This proposed addition serves as an early filtering mechanism to ensure that only well-aligned and high-priority proposals proceed to the existing process, strengthening the overall planning and decision-making framework.

The trials and implementation of the tools can be observed in Table I.

Table I. Implementation Plan for the New Pre-Proposal System

Years				2024								2025
				November				December				Jan				Feb
No	Maturation and optimization method for work plans		PIC	W1 1	W2 2	W3 3	W4 4	W1 5	W2 6	W3 7	W4 8	W1 9	W2 10	W3 11	W4 12	W1 13	W2 14	W3 15	W4 16
1	Check	Conducting trails on tools for pre-investment proposal optimization in NBD	Team Reviewer
2	Implementation	Socialization of the system	Team Reviewer
		Workshop on Pre-Proposal Preparation for 2025 RK ABI NBD: Zona 1, Zona Rokan, and Zona 4	Team Reviewer
		Analysis and Evaluation of Pre-Proposal Method Implementation Results	Team Reviewer & Management
3	Assessment	Devolopment of Standard Operating Procedures (SOP) for Pre-Proposals	Team Reviewer

Furthermore, to evaluate whether the tool has a positive impact or not, a discussion trial was conducted with the proposers. The results of the trial can be seen in the following subsection.

Trial Tool for Pre-Proposal Stage (Check)

From the initial 299 work plan proposals with a total proposed investment value of 423.72 MUSD, the implementation of the Pre-Proposal process resulted in a Frozen Scope of 232 work plans with a total proposed investment value of 381.60 MUSD.

The researcher conducted a BPMN simulation as shown in Fig. 7 to analyze whether the overall system demonstrated improvements in effectiveness.

Fig. 7. BPMN new process for NBD Investment Proposal in Regional 1.

The simulation of the post-improvement non-business development (NBD) investment proposal process as shown in Fig. 8 shows significant progress in reducing inefficiencies, particularly in waiting times and bottlenecks. Overall, the total elapsed time was reduced to 21.61 weeks, with work time accounting for 24.2% and wait time at 75.8%. In the Field stage, cycle time improved to two weeks with a 66.5% wait time, requiring further optimization in data handoff processes. The Zona stage also showed improvements, with reduced wait times at 66.2% of its 1.42-week cycle time. The Technical Review Team saw a reduction of 2.13 weeks in cycle time, but wait time still constituted 76.3% of the 15.87-week process. The Finance team streamlined its Risk and Cost-Benefit Analysis process, reducing its cycle time to 0.48 weeks with minimal wait time. Management remained efficient, with minimal delays recorded. The Activity Statistics showed that key stages like Proposal Review at TRM-1, TRM-2, and Risk and Cost-Benefit Analysis all benefited from reduced cycle and wait times, demonstrating better prioritization, resource management, and streamlined processes. Despite these improvements, some minor delays remained in stages, such as Gate Review, primarily due to dependencies on prior processes. The recapitulation of the changes before and after the improvements is presented in Table II.

Fig. 8. Simulation of transactions in the BPMN process for NBD investment.

Table II. Comparison of the Process Before and After the Improvement

Metric	Before improvement	After improvement	Change
Total elapsed time (Weeks)	25.2	21.61	−3.59 Weeks
Average work time (Weeks)	6.05	5.22	−0.83 Weeks
Average wait time (Weeks)	19.15	16.39	−2.76 Weeks
Technical review team cycle time (Weeks)	18	15.87	−2.13 Weeks
Technical review team wait time (Weeks)	13.71	12.1	−1.61 Weeks
TRM−2 cycle time (Days)	63	49.04	−13.96 Days
TRM−2 wait time (Days)	48	37.33	−10.67 Days

The improvement in the NBD investment proposal process demonstrates a significant reduction in inefficiencies, with a 14.3% decrease in total elapsed time and notable progress in addressing bottlenecks. With the implementation of this tool and its simulation, it has been proven to improve the effectiveness of the proposal process. Proposal teams can now focus better on preparing investment proposals, while review teams can conduct reviews more quickly and with more remarkable thoroughness. These improvements highlight the potential for continued optimization in NBD investment proposals, ensuring better resource allocation and decision-making efficiency.

Conclusion and Recommendation

This research concludes that the pre-proposal process plays a critical role in investment planning by refining and filtering proposals to ensure they align with operational needs and strategic goals. Using structured criteria such as project urgency, strategic alignment, and cost-effectiveness optimizes resource allocation and decision-making, while tools for risk assessment and workload analysis enhance the feasibility of proposals. The proposed system, supported by user-friendly tools and periodic reviews, effectively improves decision-making and resource allocation. For the system’s sustainability, it is recommended to formalize company procedures for the pre-proposal process, conduct regular socialization to ensure stakeholder understanding and enhance BPMN simulations by incorporating cost factors to improve the accuracy of resource efficiency and financial assessments. These efforts will ensure consistency, compliance, and a more comprehensive evaluation of proposals across the organization.