Download - The Next Wave of Value
THE NEXT WAVE OF VALUE: IMPLEMENTING GLOBAL BUSINESS SERVICES Mick Myers General Manager, Shared Business Services Minerals & Metals Group (MMG) [email protected]
15th Annual Australasian Shared Services & Outsourcing Week,
Melbourne 17thApril 2012
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Disclaimer
The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part, for any purpose. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. It is not the intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive analysis of the Company’s financial or trading position or prospects. The information contained in this presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation. None of the Company nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss or damage howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
This presentation includes forward-looking statements. Forward-looking statements include, but are not limited to, the company’s growth potential, costs projections, expected infrastructure development, capital cost expenditures, market outlook and other statements that are not historical facts. When used in this presentation, the words such as "could," “plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Minmetals Resources Limited (“MMR”) believe that the expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.
This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in the United States or any other jurisdiction and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto, nor does this presentation constitute a recommendation regarding the securities of the Company. This presentation is not for distribution in the United States. Securities may not be offered or sold in the United States absent registration or exemption from registration under the US Securities Act. There will be no public offering of the Company’s securities in the United States.
Agenda
Who is MMG?
Global Services to support Agile Businesses
Regional Hubs to Support Emerging Markets
Managing the Transition
Embracing the Journey to GBS
Clearing the Pathways to Success
Engaging Global Business Owners
Decision Support Tools
A brief look at the payback on ERP investments
A look to the future…
Company and Speaker Profile
MMG
• Revenue of ~US$2.2b and NPAT of ~US$0.5b in 2011.
• Employs 3,500 people at its mining operations in Australia & Asia.
• The world’s second largest producer of zinc and a major producer of copper,
gold & silver with exploration programs in North America & Asia.
• Core values: Safety, Integrity, Action, Results.
Mick Myers
• Leads MMG’s SBS which includes Financial, Procurement, Property and HR
Services delivered by a team in Melbourne, Vientiane (Laos) & Vancouver
(Canada). Currently Integration Manager of corporate offices of Anvil Mining.
• Ex GM Finance @ MMG – Corporate Accounting & Reporting, Tax & Treasury.
Joined the group in 2004, experienced de-merger of smelting group & float of
Nyrstar in 2007, merger with Oxiana in 2008 and acquisition of MMG by CMN in
2009, then business combination with MMR & listing on Hong Kong exchange.
• Previously with Deloitte - led IFRS Implementation Project @ Telstra and has
extensive experience in enterprise risk, forensic and assurance services.
• Board member of Australasian Shared Services Association (“ASSA”)
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A bit about MMG…
Major Top 3 of mid tier resource companies within 5 years
Major group projects in Australia, Canada & Africa
International
Operations in Australia, Africa and Asia
Listed on the Hong Kong Stock Exchange – current market cap ~ US$3b
Exploration in Australia, Canada, USA, Chile, Indonesia, Africa, Jamaica
Diversified
Base Metals
Primary products include Copper, Zinc, Gold, Silver and Lead
Nickel, Bauxite / Alumina
Upstream Mining – open cut and underground
First stage processing – not smelting
Our Vision: Building the next generations’ leading, global diversified minerals and metals company
“Shared Services underpins MMG’s business model”
The Way We Operate – the “MMG Way”
Business Model Our business model aims to drive the bottom line cost for the company as low as possible:
Only do what we need to do on site – focus on Safety, Volume and Cost.
Aggregate everything else we do into support hubs.
Continuously improve our operations, service and support
Operating Model
The business model will be implemented by the way we operate:
Articulates what is done by group and what is done on site
Defines functions and roles
Defines specific accountabilities
MMG Management System The operating model will be implemented by MMG’s specific rules and processes:
One common set of policies and
standards.
Standard and simple processes
and business information
Standard and simple
organisation structure
Regional hubs to support growth in emerging markets
Legend:
Development / Exploration Assets
Dugald River (Australia) Zinc/lead/silver (development)
Izok Corridor Project (Canada) Zinc/copper/lead/silver (development)
Mutoshi (DRC) Copper
Exploration areas Australia, Indonesia, Canada,, Africa
Bauxite exploration Jamaica
Production Assets
Sepon (Laos) Copper/gold
Century (Australia) Zinc/lead/silver
Golden Grove (Australia) Zinc/copper/lead/gold/silver
Rosebery (Australia) Zinc/copper/lead/gold/silver
Kinsevere (DRC) Copper
Operating assets
Development assets
Exploration areas
Current shared service centres
“Shared services must evolve to support the business’ growth plans – or risk being left behind!”
Proposed shared service centres
The evolutionary path from Shared to Global Business Services (GBS)
Competitive differentiation 5
4
2
1 Process Definition
Process Integration
Process Optimisation
Process Control
Process Maturity
5-10 years We are at best practice We are considered a market leader – ie in top quartile world wide. We are known as being: Dynamic in responding to business and market needs through our processes
> 10 years We are the Toyota of the mining industry. We are known as being: The industry defers to us regarding process excellence
We are a function based organisation. We see process is something back office do. We begin : our journey to define our processes – current state is siloed
2-5 years We have caught up with our peers. We are showing signs of excellence in some areas. We are known as: having successfully integrated processes across functions, eg Employee Services
1-2 years We have a clear strategic plan around process and quality. No longer optional. Managers rewarded on meeting process objectives. We have : An emerging culture of continuous improvement, measurement and process conformance
Time
3
June 2009 Today
What sort of SSC suits your business?
2010
2012 2014
Agile business systems are essential to meet customer needs & expectations of management
Building “A” Quadrant Systems is crucial to the success of Global Business Systems
A range of systems exist to underpin productive behaviour
Embracing cultural diversity is crucial for success
At MMG we seek to gain the Competitive EdgeTM
The push for continuous improvement requires awareness of the Culture Change Curve
Embracing the Journey to GBS
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Companies are Refining How They Leverage and Drive Value From Their Services Organization
Global Business ServicesTraditional Shared Services
Stage
3
Stage
2
Stage
1Function-
Centric
Process/ServiceCentric
Value-Centric
Maturity
Strategic Business
EnablementBusiness Intelligence, Collaboration,
Capability, Flexibility/Agility
Operating ExcellenceDecision Support, Cash Optimization,
response Time, Error Rates
Complexity
ReductionEliminate, Simplify, Automate,
Consolidate, Globalize
• Functionally focused & owned platform
• Standardization
• Process improvement
• Automation
• Shared services centric
• Functional-oriented platform
• Multiple functions
• Individual SLAs
• Performance technology improvements
• Enterprise standards
• Knowledge COE
• Use of BPO & managed services outsourcing
• Service-oriented independent platform
• Service catalog-centric
• Balanced scorecard performance
• Non-traditional knowledge COE
• Commercial performance profile
• Innovation
Continuous
Commercial
Assessment
(Global, cross-functional, transactional and
specialist services oriented)
Navigating the HMS GBS requires awareness of the potential perils
Data
inaccuracy
Hidden “roles” in the business
Inability to
adjust to
changing
conditions
IT
problems
Poor
service
quality Lack of
business
unit
support Ability to opt out of GBS
Poor communications
Clear pathways to a successful GBS model
Obtain the mandate
from EXCO and set a
clear vision of shared
service model
Engage at each
turning point in
transformation
journey Review baseline model
and target activities that
should be in scope of
Shared Services
Strong business case for change
Visible and authentic leadership
Structure teams for success
Agree Service Levels
Communicate
Building GBS requires the commitment of the business and discipline to execute the model
“The most frequent reason for shared services failure is the lack of executive support and absence
of an explicit mandate.”
Engaging Global Process Owners
Sites Operations
Group Functions eg SBS
Global Process Owners
Process Owners are accountable
for sustainability of processes: • Process design and governance
• Stakeholder engagement
• Manage the change journey
Functional Managers accountable for
results: • Benefits case and realisation
• Leading the change and make it happen
• Identifying continuous opportunities to
improve
THE KEY IS EXECUTING TOGETHER! Functional Managers and Process Owners have the responsibility to contribute
• One-on-one proactive engagement
• Visible leadership to confirm alignment
• Escalate to EXCO if there is no consensus
Clear benefits from establishing Global Process Owners
MMG has established Process Owners for Global Business Processes to drive the model
Other Council
Members
General Manager
Organisational
Effectiveness (Chair),
Cliff Parker
General Manager
Strategic Performance,
Charles Reis
General Manager
Shared Business
Services,
Mick Myers
Chief Information Officer,
Peter McLure
General Manager
Enterprise Risk,
Richard Hearn
Manager MMG
Management System,
Patricia Bunde
Data mining & conversion are the commodities of trade for the future GBS
Balancing the Payback on ERP investments – processing speed / efficiency vs enterprise value
Initial investment
Ongoing support
Initial payback
Continuous improvement
Intangible benefits
Strategy
Operational
Transactional
Essential infrastructure
The justification for major ERP investment usually stems from...
Strategic: we need to do this thing to support a
new business strategy
Operational: we need to do this to provide
information needed by the business to operate
Transactional: If we do this we will displace “x”
staff or we will achieve a lower unit cost for core
processes
Essential infrastructure: we need to do this thing
to allow the business to grow rapidly
A look to the future-state GBS…..
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Future State GBS Model seeks to maximise the Leverage and impact of Services by Making it an Enterprise-Wide Competency
• Organisation – function focus shifts to strategy, grow &
protect; GBS accountable for all phases of service Design,
Build & Run activities for areas in scope including selected
Knowledge COEs
• Governance – integrated and horizontally focused
• Opportunity – maximum transaction and skill
leverage; focused enterprise approach including
agility & operations/service excellence
• Challenges – demands high level of global
integration
Building a World Class Global Business Service
Set a clear plan –
establish strategic
intent & alignment
with the business
ExCo sponsorship
well-defined
governance &
voice of customer
Recruit & retain
employees – blend
technical, relationship
builders & challengers Consolidate, Standardise,
Integrate & Automate
Build flexibility &
capability of team,
rotate through the
business
Embed culture
of continuous
improvement
Outcome
World
Class everyday
Transparent reporting of
performance & review SDM
Finally … Join the Club
Australian Shared Services Association (“ASSA”)
is a professional industry member based association committed to representing the
collective voice of the shared services profession, offering members:
• Networking events and forums
• Participate in value for money benchmarking studies and review previous studies
• Accredited Training conducted in partnership with AIM
• Access to a knowledge library on up to date articles on Shared Services
• Access to companies with varying degrees of shared services maturity
• Conference and partner discounts
• Representing the profession through a single voice for Shared Services
For further information: www.assa.net.au
Questions?