Boundary spanning as a strategic capability in orchestrating the hajj and umrah ecosystem

Indonesia’s Hajj Financial Management Agency is being asked to do far more than manage a portfolio. Under Law No. 34 of 2014, the Badan Pengelola Keuangan Haji, or BPKH, must seek stronger returns and broader economic benefits while keeping pilgrimage funds safe, liquid and invested within a low to low-moderate risk profile.

It must also help keep hajj costs reasonable, improve the quality of pilgrimage services, protect the sustainability of the funds and ensure that business decisions remain accountable. Those overlapping demands place BPKH at a complicated intersection of interests, according to the article by Arief Mufraini and Aziz Fajar Ariwibowo.

The authors describe BPKH as a boundary-spanning organization. Its role involves coordinating, collaborating, integrating and orchestrating resources across different stakeholders. Strategic partnerships, acquisitions and financing are presented as tools for increasing and optimizing the benefits generated by hajj funds.

BPKH has operated officially since 2017 and now has two subsidiaries. PT Bank Muamalat Indonesia operates in Indonesia and has a branch in Kuala Lumpur, Malaysia. Syarikah BPKH Limited operates in Makkah, Saudi Arabia. The companies work in different sectors: Bank Muamalat in Islamic financial services, and BPKH Limited in the real economy.

Together with its parent, the two subsidiaries form what the authors call the BPKH Holding. BPKH provides the strategic investment direction and manages hajj funds. Bank Muamalat contributes transaction services, data, office networks and Islamic finance experience. BPKH Limited brings market access, supply chains, business networks and execution capabilities in Saudi Arabia. Their cooperation extends beyond organizational, industry, business-model, market, geographic and jurisdictional boundaries.