AngloGold Ashanti, one of South Africa's largest mining organisations, employs a workforce in excess of 38,000 people, and in 2009 produced 1,86-million gold ounces. With mines across the country and thousands of cost allocations and different budget processes, the company needed a sophisticated financial performance management system.
The company's financial system, implemented in 2001, was an in-house developed solution that worked on a batch system, and was causing delays as all updates had to be run in batches and the system would not be updated until this process was completed. Turnaround was slow as a result.
However, the more pressing problem for AngloGold Ashanti was the fact that there was no local support for their version of their financial system, and product support was due to be discontinued at the end of 2010. This left the mining giant with little choice but to seek an alternative solution – they turned to Cortell Corporate Performance Management to deliver it.
"After AngloGold Ashanti conducted a comprehensive technical evaluation of the various products available, we were asked to conduct a proof of concept (PoC) for IBM Cognos TM1, and various selection criteria were scored at this stage," says Greg Bogiages, MD of Cortell Corporate Performance Management.
"The key criteria were processing speed as well as the ability to create multiple hierarchies so that different end-users could view the data in various reporting rollups. The meta data also needed to be easily changeable, the system had to handle the complex cost and labour allocations, and above all it needed to be easy to use."
The TM1 product within the IBM Cognos portfolio allows for a multi-cube, multi-dimensional database build, enabling faster access to centrally stored information as well as easier maintenance. It can handle high volumes of data and delivers an Excel spreadsheet front-end, making it easy and intuitive to use with little additional training.
During the PoC phase it met all of the outlined criteria, and Cortell was selected to implement the upgrade.
"We selected the IBM Cognos TM1 solution from Cortell as it performed to expectation during the PoC stage, and met all of our key criteria," says Greg Reed, manager for financial systems at AngloGold Ashanti.
"Cortell was chosen as the supplier to assist us with the project due to their 15 years of experience with the IBM Cognos TM1 solution, and have many reference sites, including several large listed companies."
Once user requirement specifications were drawn up, the project was initiated and developed on site by both Cortell and the AngloGold Ashanti team.
A test plan consisting of weekly reviews, user acceptance testing, performance testing and a balance to the budgets produced by previous financial planning system was performed to ensure that the IBM Cognos TM1 solution produced results that were satisfactory.
Onsite training was also conducted to allow for skills transfer to take place and to ensure the users were comfortable with the new system.
"The hands-on approach taken by the AngloGold Ashanti team was instrumental in the success of this project, as we had a number of challenges, not least of which was the tight timeframe of less than three months to implement. By working intimately with the team from AngloGold Ashanti, we were able to deliver the project in time and ensure expectations were met from both sides," says Bogiages.
Aside from the timeframe, the allocations themselves presented a challenge, as they were highly complex and the drivers of the allocations needed to be easily changed. In order to address this, the team from Cortell ensured that the coding was kept generic and that all of the variables were dynamic, allowing for the necessary changes to be made as required.
The balance between real-time and batch processes also had to be determined in order to optimise both speed and availability. Other challenges included the need for tight securities, user created hierarchies, and data sparcity optimisation to ensure the system ran at the best speeds possible.
Despite these challenges the project was a success, with great improvements in speed, multiple user hierarchies created as required and the ease of use that was necessary delivered through user templates and the Excel front-end.
"AngloGold Ashanti's budget processes used to take around seven hours with their previous financial system, and can now be completed in approximately 15 minutes.
"Allocations take on average seven minutes now, whereas previously they would take up to two and a half hours. The company can also convert data into activity format in about two minutes, and changes to the meta data are available immediately," says Bogiages.
These dramatically improved processing times save not only hours but money too, and help to increase productivity as a result. Easier administration and simpler management are some of the other benefits the mining giant is experiencing as a result of the implementation.
Says Reed, "Collaboration between AngloGold Ashanti and Cortell was a key component that contributed to the success of the project. This was acknowledged and confirmed with the AngloGold Ashanti TM1 team winning the in-house IT Team Award for the implementation."
Following the success of the TM1 implementation at AngloGold Ashanti in South Africa, an HR labour module was also implemented by Cortell along with Corporate Reporting, a rolling forecast system and a Life of Mine solution.
Hierarchy maintenance using Business Viewpoint is currently in progress. A TM1 solution was also implemented in Ghana at Obuasi and Iduapriem mines, and is currently being rolled out in Geita, Tanzania.