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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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Exxaro Resources Limited
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Exxaro Resources Limited
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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