Brisbane Case Study

Financial Systems Program Planning and Reporting Project Rick Cooper Director – M-Power Solutions Project Manager – Planning & Reporting Project September 08

Agenda • Introduction • Xstrata Overview • Program/Project Overview • Project – timeline, team • Technical – architecture, applications • Application screenshots • Challenges & Lessons Learnt • Q&A

Xstrata the company • • • • • • • •

A major global diversified mining group Headquartered in Switzerland Listed on London and Swiss stock exchanges Top 20 in FTSE 100 Market cap of about US$70 billion Employs 56,000+ people worldwide EBIT of US$4.5b for 6 months to June 30 2008 Divided into commodity businesses (Coal, Copper, Zinc, Nickel, Alloys etc)

Significant Growth

Market Position

Xstrata Copper - Overview • HQ in Brisbane • Operating divisions in Australia, Canada, Peru, Argentina and Chile • Produced 1m tonnes Copper in 2007/8 • 4th largest copper producer • EBIT US$2.2b for 6 months to June 30 2008 • Aims to double production in next 5-7 years

Xstrata Copper - Overview

Program Overview • • •

•

Xstrata Copper management were seeking to improve their finance systems (ERP, Sales, Planning, Reporting etc) The Planning & Reporting project is part of the Finance Systems program of work. The other projects in the program of work include: • Common Chart of Accounts • Business Separation • Sales & Logistics • Ellipse merge and demerge projects • HFM implementation The key objectives of the P&R project are to: • Ensure a consistent process • Improve the efficiency of the process • Ensure the accuracy of information • Ensure the business has a better understanding of business drivers and business performance

Why Hyperion/Oracle? • Xstrata already had exposure to Hyperion and Oracle products • Seen as the market leader – provided capability beyond just pure planning through the reporting and analysis tools • Proven technology – many other companies were already implementing Hyperion Planning, including mining companies • Scaleable solution – would be able to grow as the company grows • Successful pilot site and tool verification process • Positive feedback from Xstrata personnel attending the Hyperion conference to evaluate tools • Skills and support available in the market

Project Overview •

• • • •

Core functionality: • Operating Cost estimating and budgeting – variable costs, employees, capex etc • Basic physical modelling for cost drivers • Life of Mine financial modelling • Variance Analysis – PVE, EBIT • Oracle data warehouse for provisioning actuals • Reporting Centralised development team, global rollout through the 5 operating divisions in a staged manner Distributed architecture – each division has their own software, hardware and applications User numbers will reach 800 by project end In effect working to a template, making future implementations quicker and more cost effective

Project Timeline Scoping Tool Verification

Pilot Site Argentina Australia Chile Peru Canada Benefits Realisation Initiatives

Jun 06

Dec 06

Jun 07

Dec 07

Jun 08

Dec 08

Jun 09

Typical Divisional Project Timeline Analyse/Plan Agree Scope

Design/Build

Business Requirements Order hardware

Application Build

Lock in resources Software Installation

Unit Test/UAT

Reports Build

User Training

Data Integration

Project Plan Communication Strategy

Jan 08

Test/Train/Rollout

Application Design

Mar 08

Parallel Run

Data Reconciliation

May 08

Go Live/Support

Aug 08

Oct 08

Dec08

Divisional Project Team Steering Committee

Program Manager

Project Manager

Key Stakeholders

40%

Finance, HR, Operations etc (5%)

Functional Consultant/Project Co-ordinator

Hyperion Consultant

Business Analysts / System Administrator

IT Support

100%

100%

100%

Servers (ad hoc) DBA (ad hoc) Comms (ad hoc)

DW Consultant 100%

Project Team Roles & Responsibilities Internal Resources • • • • •

Understand requirements Data mapping, migration and reconciliation Reporting Training Becomes the administrator

Project Management • • • • • •

Stakeholder engagement Communication, training and rollout plans Co-ordinate the moving parts – requirements, build etc Ensure sign-off of plan and documentation Quality Assurance (QA) Part time role

Build Consultants/Functional Consultant/Coordinator • • • • • •

Software installation Requirements Design & Build Data Integration Knowledge transfer to internal resources Onsite liaison

Architecture

Version information: •Hyperion Planning v9.3.1 •Oracle v10.2

Note: •Ellipse and HFM integration achieved via FDM

Applications •

LOM Application

Hyperion Planning at Xstrata Copper contains 4 applications, each providing distinct functionality: • LOM – Financials and KPI reporting

Capex

LOM & KPI

Costs Application

Capex Application

Sales

Costs

Employees

Projects

• Capex – capital expenditure and depreciation Stats Application

• Costs – operating costs, including fixed, variable and employee costs • Stats – physical related information such as S&OP, equipment hours, metres etc

Drivers

Physicals (S&OP)

Sales & Marketing

Capex

Hyperion Screenshots

Login

Workspace

Physicals Planning

Variable Cost Planning

Variable Cost Planning

Headcount Planning

Fixed Cost Planning

Profit & Loss

Dashboard Reporting

Charts

Standard Reports

Smart View

Support Process

Level 1

•Important to define and communicate support process early in the project

Application Owner / Administrator

•In general, finance users should be the first level of support

Power User/Finance Reps

Level 2

M-Power Solutions Level 3

Hyperion Support

•If they cannot resolve the issue, it is passed onto the administrator who may be part of finance or business systems •And then onto the 3rd party support provider or direct to Hyperion support

Challenges/Lessons Learnt •

Time zone

•

Language barriers

•

Keeping it simple

•

Performance

•

Quality of source data in ERP and other systems

•

Challenges with some design elements – performance, usability, etc

•

Managing expectations around what the tool can/can’t do

•

Competing projects – impact on timelines and capacity of internal resources

•

Demands on internal resources – month-end, budget cycle

•

Defining Roles and Responsibilities

•

Avoid the big bang approach – implement in components or in a stage gated manner

Next Steps •

The project is now entering the benefits realisation phase.

•

The implementation of the Planning and Reporting project provides a platform to drive benefits through the business

•

The business now needs to develop functionality to meet operational needs

•

Key benefit realisation activities are: • Improved trend and comparative analysis based on appropriate drivers • Improved KPI alignment and reporting • Value Driver Trees • Price, Volume and Efficiency analysis (PVE)

Questions & Thank-you Rick Cooper Director – M-Power Solutions [email protected]