SAP Strategy

With M&A activity being driven by the big players in the Mining industry, the complexities of transitioning the SAP strategy systems landscape often doesn’t get any attention until the deal is done!

It is not surprising that the brokers of these deals have greater issues to deal with, including making the operation as financially attractive as possible.

Appropriately, the SAP stretegy focus is on reaching a suitable valuation, transition agreement, asset inclusions and exclusions, in addition to a high-level strategy for the people employed which are fundamental to make the site operate.

One other factor which is often overlooked in these deals is the IT landscape, historical data and the costs associated with the transition and long-term total cost of ownership (TCO) for systems, and particularly the ERP.

In several recent engagements, the PM Eleven team have been faced with a challenge to deliver a SAP Strategy andnew ERP environment suitable for the new mine-site with some high-level success criteria driven by the new management:

“It must be delivered within a contracted separation timetable yet deliver minimal business disruption, be fully scalable and 100% secure.
And by the way, can we also eliminate all the inflexibility of business process purposely built-in to the ERP by seller”.

The seller is often one of the big global Mining companies looking to offload underperforming assets or assets which don’t fit their new profile.

It can be almost guaranteed these companies have a global SAP solution, sometimes highly customised, sometimes highly constrained and sometimes highly expensive!

The buyers were not always big, but they were aspirational, which means you must be able to scale.

The buyer is also 100% focused on cash and minimising the purchase transactional costs.

In this environment, they are often enticed into spinning up a lesser ERP which suits small operations, with the knowledge that the dollars outlaid will be small. But beware, there are risks which will increase the cost profile over the short to medium term.

PM Eleven Approach

Assess the future state using a series of critical criteria:

People & Change
Business Disruption
Budget & timelines
Technical & Feasibility
Dependencies on the Business
External factors

We have guided several growing miners to realise that you can be highly efficient and cost-effective using SAP ® together with our embedded productivity tools for SAP ® Software.