Exxaro Resources SAP ECC6

Programme
Achieving the near impossible
Presented by: Antionette Wagner and
Marius van Jaarsveld






12 September 2012
Introduction
Antionette Wagner
Executive lead
Deloitte
Marius van Jaarsveld
Partner
Deloitte
2
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
3
Exxaro Resources Limited
4
Exxaro Resources Limited
Anglo American
plc
9.8%
Free float
37.54%
BEE Holdco
52.66%
Exxaro Resources Ltd
100%
Exxaro Coal
Limpopo
Leeuwpan mine
Tshikondeni
mine
Mafube coal
Mafube joint
venture (JV)2
Inyanda mine
Exxaro
reductants
Arnot mine
Matla mine
New Clydesdale
mine
North Block
Complex
Exxaro Sands
Toliara Sands
Option to
acquire 100%
Namakwa
Sands
100%
KZN Sands
100%
Australia Sands
100%
Tiwest Joint
Venture
50%
Other interests
Cennergi
50%
Sishen Iron Ore
Company
20%
Tronox Limited
38.5%
Zincor
Rosh Pinah
(Namibia)
50.04%
FerroAlloys
Chifeng
(China)
22%
Black Mountain and
Gamsberg Project
36%

Exxaro Base
Metals and
Industrial
Minerals
Alloy-Stream
TM
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.
5
Overview of the
transformation
programme
6
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 capital
within the core operations does not
support sustainable growth cash
requirements.
Services and corporate functions
do not serve the business
optimally, resulting in below
standard service delivery,
unacceptable service cost and
inappropriate control.
Goals
Improve financial return for
investors.
Optimise the core structures.
Hardwire core for improvement.
Establish greater role clarity.
Better service delivery.
Reduced services costs.

Benefits
Alignment in structures and
processes:
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 market
optimisation.
Cost reduction:
Significant reduction in costs.
To achieve its Mission and Vision
and to live the Values and the
Brand Promise, Exxaro identified
the following focus areas:
To deliver this, Exxaro identified
the following business challenges
Siyaya was then launched to
address these challenges
7
The Siyaya transformation programme
we 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 office
functions appropriate to
chosen governance
model
Corporate
office
Services
Economy of
skill
Professional
services
Economy of
scale
Transactional
services
Regional and
site services
Growth
Business of
today
Cash engine
Operational excellence
Operations
Sands and base metals
Coal
8
It was recognised that technology would be a key enabler to achieve
this vision
September 2010
Investigation to to understand the key
business drivers and technology
requirements of Siyaya and determine the
most appropriate ERP Landscape
Strategy and Roadmap to enable this
vision.
1990s
Exxaro was a pioneer in implementing
SAP in the middle and late 1990s and
had six existing SAP instances and one
Elypse system.
November 2010
Decision to replace SAP 4.7 systems with
a 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 a
consolidated Exxaro across the multiple
underlying clients.
Technology challenges
Lack of consistency in
business process
execution, underpinned by
discrepancies in supporting
systems. Configuration
differences in the various SAP
clients reflect process
deviations and differences
between operations.
Technology barriers
existed, created by the
multiple SAP client
environment, preventing the
organisation from leveraging
cross business capability
e.g. the opportunity to manage
critical stock as a single
business entity.
Business process
ownership was lacking in
some areas, and the mandate
to govern the organisation in a
single consistent manner is
absent or lacking.
Master data discrepancies
remained a challenge
hindering standardization,
although some notable efforts
have been made, particularly
in Supply Chain.
9
Siyaya Foundation stage
A complex programme
The 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 March July May June August September October November December January Apr
2011 2012
Staffing Staffing preparation
ERP blueprint socialisation Systems training Training process and systems
Process
training
Facilities fit out and integrated solution Facilities ready Facilities long-term transition
Service management enablement Service management transition
Systems support Build system Test system UAT Cutover ERP blueprint
Consult Overall solution support
Data clean up and preparation Capture data in new systems
Change and communication support Change preparation /mobilisation
Stabilise Consult Staff and system readiness Train and deploy
6 May
3 October 1 January
10
SAP 5
SAP 4
SAP 3
SAP 2
SAP 1
Blue print Implementation
Single 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 from
an 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.
11
Selecting Deloitte
12
D
e
p
t
h

o
f

e
x
p
e
r
i
e
n
c
e

i
n

m
i
n
i
n
g

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
13
Highlights of the SAP
ECC6 programme
14
Extensive scope
Business
warehouse
Document
management
HCM ESS, MSS
and Portal
Quality
management
Production
planning
Projects
Plant
maintenance
Travel
management
Materials
management with
bar coding
mobility solution
Maintenance cost
budgeting
(SAP ramp up)
Sales and
distribution
Treasury
Asset
management
Controlling Financials
Business objects NetWeaver Basis
Application link
enabling
Process
integration
NetWeaver ABAP
Development
Solution manager
Customer
relationship
management
GRC Access
Control and
Authorisations
GRC Access
Control and
Authorisations
Qmastor Pit to
Port
ARIS
Cideon
Dmobile Barcode
Scanning
Master data
management
SAP scope 3
rd
party products
15
Aggressive timelines
Mid June 2012
4 weeks
Transition
From other service provider.
01 April 2012
7 months
Realisation
01 November 2012
2 months
Final preparation
01 March 2012
4 months
Blueprint
To level 4 with another
service provider.
Early J anuary 2012
Go live
Across entire coal division
and all corporate and
services 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.
16
Success factors
17
Success factors


Taking ownership Appoint the right
advisors
Good blueprint Solid system build Strong governance
and assurance
Group CIO took personal
ownership.
Deloitte leadership. Baseline developed with
third party.
Flawless configuration. Deloitte programme
management.
Very good business
resources assigned to
project.
Deloitte consultants. Reviewed and improved by
Deloitte.
No source code changes.

Daily, weekly and monthly
meetings.

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

SAP skills. Assurance role of KPMG.
Deloitte executive
involvement.
18
Lessons learnt
19
Things we could have done better
Overall programme approach
Authorisations became a challenge due to late operating and organisation model
implementation.
Training challenge due to late operating and organisation model implementation.
20
Next steps
21
Next phases
Environment, health
and safety
Phased programme.
First go live 01 October
2012.
Mineral Sands division
Go live 01 October 2012.
Business planning and
consolidation
Extend and roll out MCB.
Business planning.
22
Questions and answers
23
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