The Next Wave of Value


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Implementing Global Business Services

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The Next Wave of Value

  1. 1. 15th Annual Australasian Shared Services & Outsourcing Week,Melbourne 17thApril 2012THE NEXT WAVE OF VALUE:IMPLEMENTING GLOBALBUSINESS SERVICESMick MyersGeneral Manager, Shared Business ServicesMinerals & Metals Group (MMG)
  2. 2. DisclaimerThe information contained in this presentation is intended solely for your personal reference and may not bereproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside yourorganisation/firm) or published, in whole or in part, for any purpose. No representation or warranty express or impliedis made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of theinformation or opinions contained in this presentation. It is not the intention to provide, and you may not rely on thispresentation as providing, a complete or comprehensive analysis of the Company’s financial or trading position orprospects. The information contained in this presentation should be considered in the context of the circumstancesprevailing at the time and has not been, and will not be, updated to reflect material developments which may occurafter the date of the presentation. None of the Company nor any of its respective affiliates, advisors or representativesshall have any liability whatsoever (in negligence or otherwise) for any loss or damage howsoever arising from any useof 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, thecompany’s growth potential, costs projections, expected infrastructure development, capital cost expenditures, marketoutlook 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-lookingstatements. 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 thatactual 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 UnitedStates or any other jurisdiction and no part of it shall form the basis of or be relied upon in connection with anycontract, commitment or investment decision in relation thereto, nor does this presentation constitute arecommendation 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 theUS Securities Act. There will be no public offering of the Company’s securities in the United States. 2
  3. 3. 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…
  4. 4. 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”)
  5. 5. A bit about MMG…Our Vision: Building the next generations’ leading,global diversified minerals and metals company  Top 3 of mid tier resource companies within 5 years Major  Major group projects in Australia, Canada & Africa  Operations in Australia, Africa and Asia International  Listed on the Hong Kong Stock Exchange – current market cap ~ US$3b  Exploration in Australia, Canada, USA, Chile, Indonesia, Africa, Jamaica  Mining – open cut and underground Upstream  First stage processing – not smelting Diversified  Primary products include Copper, Zinc, Gold, Silver and Lead Base Metals  Nickel, Bauxite / Alumina“Shared Services underpins MMG’s business model” 5
  6. 6. 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 Operating Model on Safety, The business model will be implemented by the way we Volume and Cost. operate: Articulates Aggregate what is done by everything group and what MMG Management System else we do into is done on site support hubs. The operating model will be implemented by Defines MMG’s specific rules and processes: functions and roles Standard and Standard and Continuously One common set improve our simple processes simple of policies and operations, and business organisation Defines specific standards. service and information structure accountabilities support
  7. 7. Regional hubs to support growth in emerging markets Production AssetsSepon (Laos) Copper/goldCentury (Australia) Zinc/lead/silverGolden Grove (Australia) Zinc/copper/lead/gold/silverRosebery (Australia) Zinc/copper/lead/gold/silverKinsevere (DRC) CopperLegend: Development / Exploration Assets Operating assets Dugald River (Australia) Zinc/lead/silver (development) Development assets Izok Corridor Project (Canada) Zinc/copper/lead/silver (development) Exploration areas Mutoshi (DRC) Copper Current shared service centres Exploration areas Australia, Indonesia, Canada,, Africa Bauxite exploration Jamaica Proposed shared service centres “Shared services must evolve to support the business’ growth plans – or risk being left behind!”
  8. 8. The evolutionary path from Shared to Global Business Services (GBS)Process CompetitiveMaturity 5 differentiation Process > 10 years 4 Optimisation We are the Toyota of the mining industry. Process 5-10 years We are known as being: 3 We are at best practice The industry defers to Integration We are considered a us regarding process market leader – ie in excellence 2-5 years top quartile world wide. 2 Process We have caught up Control with our peers. We are known as being: We are showing Dynamic in responding 1-2 years signs of excellence to business and We have a clear in some areas. market needs through 1 Process our processes strategic plan around Definition process and quality. We are known as: No longer optional. having We are a function successfully based organisation. Managers rewarded on meeting process integrated We see process is processes across something back objectives. functions, eg office do. Employee Services We have : An We begin : our emerging culture of journey to define continuous our processes – improvement, current state is measurement and siloed process conformance Time June 2009 Today
  9. 9. What sort of SSC suits your business? 2012 2014 2010
  10. 10. Agile business systems are essential to meetcustomer needs & expectations of management
  11. 11. Building “A” Quadrant Systems is crucial to thesuccess of Global Business SystemsA range of systems exist to underpin productive behaviour
  12. 12. Embracing cultural diversity is crucial for success
  13. 13. At MMG we seek to gain the Competitive EdgeTM
  14. 14. The push for continuous improvement requiresawareness of the Culture Change Curve
  15. 15. Embracing the Journey to GBSCompanies are Refining How They Leverage and Drive ValueFrom Their Services Organization Maturity • Service-oriented independent platform Stage • Service catalog-centric 3 • Balanced scorecard performance Strategic Business Value- Centric • Non-traditional knowledge COE Enablement • Commercial performance profile Business Intelligence, Collaboration, • Innovation Capability, Flexibility/Agility • Functional-oriented platform Stage • Multiple functions 2 • Individual SLAs Operating Excellence • Performance technology improvements Decision Support, Cash Optimization, Process/ Service • Enterprise standards response Time, Error Rates Centric • Knowledge COE • Use of BPO & managed services outsourcing • Functionally focused & owned platform Stage • Standardization Complexity Continuous • Process improvement 1 • Automation Reduction Commercial Function- Assessment Centric • Shared services centric Eliminate, Simplify, Automate, Consolidate, Globalize Traditional Shared Services Global Business Services (Global, cross-functional, transactional and specialist services oriented)© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
  16. 16. Navigating the HMS GBS requires awareness ofthe potential perils Poor communications Inability to adjust to changing conditions Data inaccuracy Poor service IT Lack of quality problems business unit support Ability to opt out of GBS Hidden “roles” in the business
  17. 17. Clear pathways to a successful GBS model Engage at each Strong business case for change turning point in Visible and authentic leadership transformation Structure teams for success journey Review baseline model Agree Service Levels and target activities that Communicate should be in scope of Shared Services Obtain the mandate from EXCO and set a clear vision of shared service model
  18. 18. Building GBS requires the commitment of thebusiness 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.”
  19. 19. Engaging Global Process Owners Process Owners are accountable for sustainability of processes: • Process design and governance • Stakeholder engagement • Manage the change journey Global Process Owners THE KEY IS EXECUTING Group TOGETHER! Functions Functional Managers and Process Owners have the responsibility to eg SBS contribute • One-on-one proactive engagement • Visible leadership to confirm alignment • Escalate to EXCO if there is no consensus Sites OperationsFunctional Managers accountable forresults:• Benefits case and realisation• Leading the change and make it happen• Identifying continuous opportunities to improve
  20. 20. Clear benefits from establishing Global ProcessOwners
  21. 21. MMG has established Process Owners forGlobal 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
  22. 22. Data mining & conversion are the commodities oftrade for the future GBS
  23. 23. Balancing the Payback on ERP investments –processing speed / efficiency vs enterprise value Initial payback Initial investment Continuous improvement Ongoing support Intangible benefits Strategy Operational Transactional Essential infrastructure
  24. 24. The justification for major ERP investmentusually 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
  25. 25. A look to the future-state GBS…..Future State GBS Model seeks to maximise the Leverage andimpact of Services by Making it an Enterprise-Wide Competency • Organisation – function focus shifts to strategy, grow & • Opportunity – maximum transaction and skill protect; GBS accountable for all phases of service Design, leverage; focused enterprise approach including Build & Run activities for areas in scope including selected agility & operations/service excellence Knowledge COEs • Challenges – demands high level of global • Governance – integrated and horizontally focused integration© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
  26. 26. Building a World Class Global Business Service Transparent reporting of Outcome Set a clear plan – performance & review SDM World establish strategic Embed culture Class intent & alignment of continuous everyday with the business improvement ExCo sponsorship well-definedBuild flexibility & governance &capability of team, voice of customerrotate through thebusiness Recruit & retain employees – blend Consolidate, Standardise, technical, relationship Integrate & Automate builders & challengers
  27. 27. Finally … Join the ClubAustralian Shared Services Association (“ASSA”)is a professional industry member based association committed to representing thecollective 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 ServicesFor further information:
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