SAP MiningMetals Forum 2012 A6 Deloitte Exxaro

8/12/2019 SAP MiningMetals Forum 2012 A6 Deloitte Exxaro

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Exxaro Resources SAP ECC6

Programme

Achieving the near impossible

Presented by: Antionette Wagner andMarius van Jaarsveld

12 September 2012
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Introduction

Antionette Wagner

Executive leadDeloitte

Marius van Jaarsveld

PartnerDeloitte

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Agenda

Exxaro Resources Limited

Overview of the transformation programme

Highlights of the SAP ECC6 programme

Success factors

Lessons learnt

Questions and answers

Next steps

Selecting Deloitte

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Anglo Americanplc

9.8%

Free float37.54%

BEE Holdco52.66%

Exxaro Resources Ltd100%

Exxaro Coal

Limpopo

Leeuwpan mine

Tshikondenimine

Mafube coal

Mafube jointventure (JV)2

Inyanda mine

Exxaroreductants

Arnot mine

Matla mine

New Clydesdalemine

North BlockComplex

Exxaro Sands

Toliara SandsOption to

acquire 100%

NamakwaSands100%

KZN Sands100%

Australia Sands100%

Tiwest JointVenture

50%

Other interests

Cennergi50%

Sishen Iron OreCompany

20%

Tronox Limited38.5%

Zincor

Rosh Pinah(Namibia)50.04%

FerroAlloys

Chifeng(China)

22%

Black Mountain andGamsberg Project

36%

Exxaro BaseMetals andIndustrialMinerals

Alloy-StreamTM

South African-based mining group, listed on the JSE Limited.

One of the best-performing constituents of the JSEs Socially Responsible

Investment (SRI) index.

At 31 December 2011, Exxaro had assets of R37 billion and a market capitalisation

of R60 billion (US$7 billion).

Diverse and world-class commodity portfolio in coal, mineral sands, base metals and

industrial minerals.

Exposure to iron ore through a 20% interest in Sishen Iron Ore Company (SIOC).

Second largest South African coal producer with capacity of 47 million tonnes per

annum.

Third largest global producer of mineral sands.

A significant participant in the coal and mineral sands markets.

The eight coal mines produce 46,8Mtpa of power station, steam and coking coal.

All power station coal produced is supplied to the national power utility, Eskom, and

municipal power stations.

Grootegeluk is one of the most efficient mining operations in the world, and operates

the worlds largest coal beneficiation complex.

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Overview of the

transformation

programme

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The need for transformation

Ensure Exxaros sustainability. Protect and build Exxaro s

reputation. Develop Exxaros leadership and

people. Improve Exxaros portfolio. Achieve operational excellence.

Expected financial return on capitalwithin the core operations does notsupport sustainable growth cashrequirements.

Services and corporate functionsdo not serve the businessoptimally, resulting in belowstandard service delivery,unacceptable service cost and

inappropriate control.

Goals

Improve financial return forinvestors.

Optimise the core structures. Hardwire core for improvement. Establish greater role clarity. Better service delivery. Reduced services costs.

Benefits

Alignment in structures andprocesses: High level alignment in core

structures. Improved focus on planning and

optimisation. Aligned key business process.

Value creation: Significant revenue potential.

Focus on plant efficiencies,product mix and marketoptimisation.

Cost reduction: Significant reduction in costs.

To achieve its Mission and Visionand to live the Values and the

Brand Promise, Exxaro identified

the following focus areas:

To deliver this, Exxaro identifiedthe following business challenges

Siyaya was then launched toaddress these challenges

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The Siyaya transformation programmewe are on the move

A strategic business programme,

called Siyaya, was launched to

achieve these and other strategic

goals such as creating unrivalled

value in terms of return on capital

employed, and creating robust

businesses that share, optimise

cost structures, improve

throughput and optimise their

sales mix.

Perform corporate officefunctions appropriate to

chosen governancemodel

Corporateoffice

Services

Economy ofskill

Professionalservices

Economy ofscale

Transactionalservices

Regional and

site services

Growth

Business oftoday

Cash engineOperational excellence

Operations

Sands and base metals

Coal

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It was recognised that technology would be a key enabler to achievethis vision

September 2010

Investigation to to understand the keybusiness drivers and technologyrequirements of Siyaya and determine themost appropriate ERP LandscapeStrategy and Roadmap to enable thisvision.

1990s

Exxaro was a pioneer in implementingSAP in the middle and late 1990s and

had six existing SAP instances and oneElypse system.

November 2010

Decision to replace SAP 4.7 systems witha single consolidated SAP ECC6

system.

Exxaros Business Intelligence (BI) capability

was advanced, as this capability has historically

been necessary to create a single view of aconsolidated Exxaro across the multiple

underlying clients.

Technology challenges

Lack of consistency in

business process

execution, underpinned bydiscrepancies in supportingsystems. Configurationdifferences in the various SAPclients reflect processdeviations and differencesbetween operations.

Technology barriers

existed, created by themultiple SAP clientenvironment, preventing theorganisation from leveragingcross business capability e.g. the opportunity to managecritical stock as a singlebusiness entity.

Business process

ownership was lacking insome areas, and the mandateto govern the organisation in asingle consistent manner isabsent or lacking.

Master data discrepancies

remained a challengehindering standardization,although some notable effortshave been made, particularlyin Supply Chain.

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Siyaya Foundation stage

A complex programmeThe transformation programme was executed along five parallel streams with an aggressive timeline:

Enabling technology (including SAP ECC6).

Work force transition.

Services management.

Change communication and training. Facilities and infrastructure.

February MarchJulyMay June August September October November December JanuaryApr

2011 2012

StaffingStaffing preparation

ERP blueprint socialisation Systems training Training process and systemsProcesstraining

Facilities fit out and integrated solution Facilities ready Facilities long-term transition

Service management enablement Service management transition

Systems supportBuild system Test system UAT CutoverERP blueprint

Consult Overall solution support

Data clean up and preparation Capture data in new systems

Change and communication supportChange preparation /mobilisation

StabiliseConsult Staff and system readiness Train and deploy

6 May 3 October 1 January

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SAP 5

SAP 4

SAP 3

SAP 2

SAP 1

Blue print ImplementationSingle SAP

ECC6 Instance

SAP consolidation into one ECC6 instance

Exxaro opted for a two phase approach to

the overall execution of the ECC6 Project.

1. The first phase was focused on Design/

Blueprinting. This phase included the

calibration of all level four processes to be

aligned with SAP and the requirements froman ARIS business process modeling

perspective.

2. Deloitte, having been the auditors to

Exxaro until December 2010, was appointed

in February 2011 for the Implementation

phase.

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Selecting Deloitte

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Depthofexperienceinmining

Cameco

Billiton: Alusaf Hillside Billiton: Alusaf Bayside

Rio Tinto

Billtion: Mozal

Billiton: Manganese

De Beers

Sasol

Lonmin

De Beers

Koornfontein Coal Mine

Optimum

Sohar Aluminium

Gold Fields

Anooraq

Arcelor Mittal SA

Great Basin Gold

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

BHP Billiton: Coal, Chrome, Corporate and International

Dubai Aluminium

2011

Exxaro

Selecting Deloitte

Deloitte was appointed as the SAP ECC6 Implementation for the

following reasons:

The depth of SAP mining industry experience

The quality and experience of the proposed Deloitte team

The commitment to a seamless transition and no alibi approach

The commitment by the Deloitte leadership

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Highlights of the SAP

ECC6 programme

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Extensive scope

Businesswarehouse

Documentmanagement

HCM ESS, MSSand Portal

Qualitymanagement

Productionplanning

ProjectsPlant

maintenanceTravel

management

Materialsmanagement with

bar coding

mobility solution

Maintenance costbudgeting

(SAP ramp up)

Sales anddistribution

TreasuryAsset

managementControllingFinancials

Business objects NetWeaver BasisApplication link

enablingProcess

integrationNetWeaver ABAP

Development

Solution managerCustomer

relationshipmanagement

GRC Access

Control andAuthorisations

GRC Access

Control andAuthorisations

Qmastor Pit toPort

ARIS

Cideon

Dmobile BarcodeScanning

Master datamanagement

SAP scope 3rdparty products

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Aggressive timelines

Mid June 20124 weeks

Transition

From other service provider.

01 April 2012

7 months

Realisation

01 November 20122 months

Final preparation

01 March 2012

4 months

BlueprintTo level 4 with anotherservice provider.

Early January 2012

Go live

Across entire coal divisionand all corporate andservices functions.

Quick facts

9 months from design to single instance go live, 13 months from kick off.

Training and cut over during the South African holiday season.

310 Training Instances

4 925 end users trained at 16 sites

24 million data objects migrated.

Outcomes

On time.

Within budget.

Zero configuration changes made since go

live. Stability in a short period of time.

No SAP source code changes.

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Success factors

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Success factors

Taking ownership Appoint the right

advisors

Good blueprint Solid system build Strong governance

and assurance

Group CIO took personalownership.

Deloitte leadership. Baseline developed withthird party.

Flawless configuration. Deloitte programmemanagement.

Very good businessresources assigned toproject.

Deloitte consultants. Reviewed and improved byDeloitte.

No source code changes. Daily, weekly and monthlymeetings.

Mining industry experience. No alibi approach. Limited developments. Three meetings daily duringcutover.

SAP skills. Assurance role of KPMG.

Deloitte executive

involvement.

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Lessons learnt

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Things we could have done better

Overall programme approach

Authorisations became a challenge due to late operating and organisation modelimplementation.

Training challenge due to late operating and organisation model implementation.

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Next steps

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Next phases

Environment, healthand safety

Phased programme.

First go live 01 October2012.

Mineral Sands division

Go live 01 October 2012.

Business planning and

consolidation Extend and roll out MCB.

Business planning.

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Questions and answers

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SAP MiningMetals Forum 2012 A6 Deloitte Exxaro

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