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Implementing Global Business Services

Presentation to 15th Annual Australasian Shared Services & Outsourcing Week,Melbourne 17th April 2012 on The Next Wave of Value: Implementing Global Business Services

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Implementing Global Business Services

  1. 1. THE NEXT WAVE OF VALUE: IMPLEMENTING GLOBAL BUSINESS SERVICES Mick Myers General Manager, Shared Business Services Minerals & Metals Group (MMG) Mick.Myers@mmg.com 15th Annual Australasian Shared Services & Outsourcing Week, Melbourne 17thApril 2012
  2. 2. 2 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.
  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. 5 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”
  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 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
  7. 7. 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
  8. 8. The evolutionary path from Shared to Global Business Services (GBS) Competitive differentiation5 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
  9. 9. What sort of SSC suits your business? 2010 2012 2014
  10. 10. Agile business systems are essential to meet customer needs & expectations of management
  11. 11. Building “A” Quadrant Systems is crucial to the success of Global Business Systems A 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 requires awareness of the Culture Change Curve
  15. 15. 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 1 Function- Centric Process/ Service Centric Value- Centric Maturity Strategic Business Enablement Business Intelligence, Collaboration, Capability, Flexibility/Agility Operating Excellence Decision Support, Cash Optimization, response Time, Error Rates Complexity Reduction Eliminate, 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 servicesoriented)
  16. 16. 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 qualityLack of business unit support Ability to opt out of GBS Poor communications
  17. 17. 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
  18. 18. 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.”
  19. 19. 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
  20. 20. Clear benefits from establishing Global Process Owners
  21. 21. 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
  22. 22. Data mining & conversion are the commodities of trade for the future GBS
  23. 23. 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
  24. 24. 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
  25. 25. 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/serviceexcellence • Challenges – demands high level of global integration
  26. 26. 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
  27. 27. 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
  28. 28. Questions?