gerry gluscic newmont mining corporation€¦ · 12/9/2012 · organization change management ......

Global Process Transformation Using SAP –

“What to Expect in Large Deployments”

Gerry Gluscic – Newmont Mining Corporation

Newmont Mining Corporation – A Company focused on

becoming the most valued and respected mining company

through industry leading performance

Based in Greenwood Village, Colorado

Approximately 43,000 employees and contractors

90+ year old company

Gold (85%) and Copper (15%) mining

Transitioning to a global operating company

Newmont culture – relationship based

9/12/2012 Newmont Mining Corporation – Strictly Confidential 2


Newmont Operating Locations – Newmont operates in

a global environment and is aggressively pursuing

efficiencies in all parts of our business

Tanami Jundee

Kalgoorlie Walhl

Batu Hijau

Boddington

Ahafo

Akyem

Merian

Yanacocha

Conga

La Herradura

Nevada

Operating Regions: N. America, S. America, Africa, and Asia Pacific

6 Support Models

Pangaea Project – A business process transformation

project using SAP, focused on standardizing business

processes and leveraging best practices globally

Strategic Value low high

high

To

tal B

us

ine

ss

C

os

t

Different Processes

Different Data

Different Applications

6 Instances

6 Versions

>10,000 Reports

Can’t Benchmark

6 Support Models

Different Training

Different Processes

Different Data

6 Instances

6 Versions

> 10,000 Reports

Can’t Benchmark

6 Support Models

Different Training

Common Application

Different Application

6 Instances

6 Versions

Common Processes

Common Data

Common Reports

Benchmarking

Similar Training

Common Processes

Common Data

Common Application

2 Instances

Single Version

Common Reports

Benchmarking

1 Support Model

Standard Training

Common Processes

Common Data

Common Application

Single Instance

Single Version

Common Reports

Benchmarking

1 Support Model

Same Training

No Standard

No Standard

Weak Standard

Stronger Standard

Desired Standard

Ellipse

SAP

Newmont Mining Corporation – Strictly Confidential 9/12/2012 4

Pangaea Project Value Creation - Our global

transformation project was focused on enabling other

strategic initiatives and capabilities... A strategic platform

9/12/2012 Newmont Mining Corporation – Strictly Confidential

Creates a foundation for Newmont’s global shared services

strategy

Shared Services and Pangaea benefits estimated to save

$35 - 40 Million annually

Enables Wave 2 benefits of process and services

optimization (Estimates to be developed)

Establishes consistent processes and data globally that can

be benchmarked

Enables Newmont shareholder and growth plans

Addresses a IT platform issue with legacy software

5

Pangaea Project Scope – Global project that includes

major functions, with an aim to simplify our business and IT

operating environments

Key Functions included in the project: Finance, Payroll, Supply

Chain/Procurement, Human Resources, Maintenance

All operating sites included in scope with exception of Indonesia

Single global instance approach

Common data

Common reporting with exception of required localizations

No or limited customizations

Center of Excellence business and IT centralized support model


Project Pangaea Scope (Phase One) – The scope of

Phase One is large, and the related process

transformation equally significant

7

Supply Chain

Purchasing

Materials Management

Materials Resource Planning

Quality Management

Supplier Relationship management

Contract Lifecycle Management

Maintenance

Multi Resource Scheduling

Work Order Process

Preventive Maintenance Processing

Shutdown Planning and Scheduling

Outside Contractor Services

Syclo Mobility

Finance

General Ledger

Accounts Payable

Accounts Receivable

Fixed Assets

Controlling

Project Systems

Business Planning and Consolidation (BPC)

HR

Benefits – US only

Personnel Administration

Training and Event Management

Organization Management

Payroll – NA, Ghana, Australia, New Zealand, Peru

Global employment

Time Management

Employee Self Service

Manager Self Service

eLearning

Technology

Portal

SAP Technical Footprint

CLM

SRM

Syclo

ESS

MSS Modules implemented

Related Extension


Pangaea Implementation Schedule – To ensure business

focus, Newmont’s approach to the implementation has been

to complete the project in a 2 year timeframe

SAP Pangaea

Implementation

2010 2011 2012

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Project Life Cycle – Kickoff Oct 2010

Blueprint - Design

Realization – Build & Test

Final Preparation – Ready for Go-Live

Go-Live North America

Go-Live Peru

Go-Lives Australia/New Zealand/ & Ghana

April 2012

July 2012

Oct./Nov 2012

Newmont Mining Corporation – Strictly Confidential 9/12/2012

Minimize

initiative conflict

and employee

and consultant

turnover

8

Pangaea Project Approach – A true global program...A top

company initiative, with strong executive sponsorship...

With SAP as our implementation partner

Global program run out of Denver, with representatives from all regions

and functions relocated to Denver for 18 of the 26 months

Selected SAP as implementation partner for the project

Business and IT leadership were solid, with an experienced Newmont SAP

Project Manager and SAP Project Manager

An executive steering and governance committee was established,

including COO, CFO, CIO, Controller, Human Resources executive, and

SAP executive representation o Regular Board of Director reviews of program status

o SAP QA reviews, external and internal audit QA’s were part of the program

Special incentive compensation for employees seconded to project

Monthly project updates

Aggressive governance on managing scope

No or limited customizations – Only a few customizations


Pangaea Project Learning – There were many things we

did well, but as a global transformation project, there was

learning worth sharing

Governance and project set-up

Team selection

Change management


Governance & Project Set-up – What we identified as key

risks were mostly well mitigated, but we later discovered

soft spots in decisions, processes, and capabilities

While there was a strong steering committee, the cascading of

decisions, and the communication in the regions from the

steering committee members and the regional leadership

teams was inconsistent

Funding decisions points should have been phased allowing

for more accurate spend and expectation management

Aggressive time schedule left little to no room for issue

resolution - Ultimately, requiring us to revise the time schedule

Organization process maturity was low, and it showed in

assessment and performance during the project

Our support structure required knowledge and skill ramp-up

which took more time than planned

Stabilization required more resources than planned


A very

challenging

climb

with lots of

cliffs and

overhangs

Invested more time with goal alignment with regional

management, and invested more with change management

resources including putting change resources within the streams

Asked for funding by phase... Blueprint, Realization, etc.

Scheduled our third go live (Australia/New Zealand) differently..

Post quarter end. It was scheduled to close to quarter end

Spent more time aligning the organization to a process

approach... And building process capability in functions

Brought support resources in earlier to better understand our

configuration and processes...

Additional stabilization resources would have been planned in

the structure for post go-live


Governance & Project Set-up – What we would have

done differently...

Team Selection – Selecting and securing competent

process stream SME’s and leadership proved to be a

challenge even with attractive retention packages

Business and IT project leaders were good selections, but

some functional stream leads did not possess all the skills

necessary for success in their roles

Process expertise was not as high as we liked in some SME’s

... Including project experience

Getting SME’s to move to Denver for 18 months presented

challenges

Even though there was an early commitment to support career

development, defining paths back to operational roles has

turned out to be a challenge


Team Selection – What we would have done

differently...

We would have spent more time addressing fit and

competencies in the functional business lead roles. Some

functions viewed it as a developmental opportunity.

Getting alignment from senior executives to sponsor their best

employees.

A significant amount of time was spent addressing employee

placement post project. A cost reduction effort was taking

place at the same time we were placing employees back in the

business. Expectations are not being met in some cases...


Organization Change Management - Business

adoption led by organization leaders both regionally and

functionally

Stakeholder

Engagement/

Alignment

Training • Develop training curriculum

• Updated User Guide

• Job aids

• Coaching/Support

Communications

• Communication Strategy and Plan • Executive, Internal, and External

Communications

• Wiki, Newsletter and Release Updates • Timely and relevant communications

Sustainment Readiness • Superuser development and engagement;

build team to drive long term support;

• Partner with site resources

• Communicate support process to stakeholders to prepare for Go-Live

• Develop readiness tracking tools and process

• Conduct readiness checkpoints with Stakeholders

• Add and track CM components in each

readiness checkpoint

• Align roles to business

Global Alignment/Harmonization

Business adoption must be driven from leaders at the top

Leadership

Mandate


16

OCM Strategy for Driving the Business Transformation –

Multiple levels of stakeholder change were planned and

implemented

Engage the business leaders through the Pangaea readiness process

Manage the change process with Regional Change Agents

Partner with the Regional Learning & Development teams to develop Super

Users

Work with Business Process Owners to implement the new business processes

Leverage the regional communication teams in moving the key messages to

targeted audiences

16

Build a partnership with multiple stakeholders to drive the

Business Transformation


17

Global Engagement Model – We created an

engagement model that covered all the stakeholders

and OCM extended team

Lo

ca

l R

eso

urc

es

Current Assumption: Local resources ramped to 100% time over time

OCM Team

Project

Regional

Change

Agents

Location

Super Users

Pangaea

Readiness

Teams

Regional

Change

Agents

Location

Super Users

Pangaea

Readiness

Teams

Regional

Change

Agents

Location

Super Users

Pangaea

Readiness

Teams

Regional

Change

Agents

Location

Super Users

Pangaea

Readiness

Teams

Set overall OCM Strategy and Plan

Create communication

Design OCM stakeholder management approach, tools, templates

Monitor OCM impact/effectiveness

Coordinate information flow between project to business

Focal point for moving project communication

into business

Monitor OCM impact/effectiveness at local level

Support PRT activities/reporting

Assess process change impacts on operations

Build action plans for change

Prepare organization for change

Support and monitor PRT activities

Report on PRT activities

Support PRT activities

Update local leadership on Super User

development activities

Share project information with user group

Leads the change in the regions and sites

Advocate for the change with local

leadership team

Advocate for the change

North

America

South

AmericaAfrica APAC

Communicates changes to employees


18

End User Training - Our end user training model used

best practices and models from SAP change practice

18

End users must

understand how the

process works and their

role in the process before

they start SAP training

Pangaea Readiness

Process

Changes

Procedure

Changes

SAP

Transaction

Training

End User Role

Changes

Business

leaders must

prepare end

users for

changes in

process,

procedures

and roles

Training delivered through

Instructor led and on line

classes (instructor led were

Super-users from regions


Change Management – We knew this was a critical part

of our project. We thought we prepared well enough, but

it wasn’t enough…

We had to change out our change management lead during

the project. Finding a replacement was difficult.

We previously mentioned the lack of maturity in process.

Process adoption at some sites/regions has been significantly

more difficult than in other regions. It is clear that investing

more on change management up front would have helped

early go-live sites…

We started the change process 7 months before the region

rollout, but the significance to local leadership occurred 2-3

months before implementation

Some regions wanted to appoint Newmont employees to key

regional change roles. This turned out to be a mistake as they

had no ERP change management experience

Initially, we did not have enough (or the right) key metrics in

place to measure/track progress on change and adoption


Change Management – We knew this was a critical part

of our project. We thought we prepared well enough...

But guess what? It wasn’t enough.

Starting a change resource search earlier and building this

capability at least 12 months in advance would have made a

difference

We implemented with our most difficult region from a change

perspective first. We would have reordered this region

differently, if re-planning the implementation.

Investing more with change resources at the regional level

would have mitigated some of our challenges in process

adoption... Even if process knowledge was not present.

Training materials to cover total process (end to end process)

We would augmented external change management resources

with our Newmont change resources in our regional teams.

While we established metrics for go live, we did not put enough

rigor into the effort... Establish metrics 3 months in advance of

implementation


Change Post-Project – Establishing Business Process

ownership roles instead of functionally aligned roles for post

project governance is essential, and underway... But not easy

Execu

tiv

e

Lev

el

Pro

gra

m L

ev

el

Pro

cess

Lead

P

rocess L

ead

Executive

Steering

Committee

Program & Project

Management

Business Process

Owner (During

Project)

Business Process

Owner (Post

Project)

■ Sponsorship, commitment and ownership ■ Alignment and prioritization across initiatives

■ Agree on project goals and objectives, scope, budget, and approve any significant changes

to scope

■ Responsible for day to day project activities and integration across all functional and technical tracks, providing operational support to the project, value/benefits, resources,

organization, communication, structure / standards

■ Prioritization criteria and deployment options ■ Risk management , Issue escalation and resolution

■ Responsible for scope management, communication, OCM and resolving critical issues

■ Accountable for delivery of the program

■ Accountable for final process design and key performance indicators (KPI) ■ Accountable for successful deployment of the common processes across the organization

Operational project staffing, planning and execution, 1st level risk mitigation & p. resolution

Users training and program support, change management, cutover support and execution

■ Time and Budget Accountability

Global Advisory Council


■ Develops strategic process and tech roadmap for process change in respective area ■ Process lead and expert and business lead on process change initiatives

■ Governance lead over all requests for process changes in their process area

■ Responsible for integration with other process leads on change impact reviews ■ Jointly creates and owns process capital plans and programs with IT and SSO

21

Change Post-Project – Establishing Business Process

ownership roles instead of functionally aligned roles for post

project governance is essential, and underway... But not easy

Execu

tiv

e

Lev

el

Pro

gra

m L

ev

el

Pro

cess

Lead

P

rocess L

ead

Executive

Steering

Committee

Program & Project

Management

Business Process

Owner (During

Project)

Business Process

Owner (Post

Project)

■ Sponsorship, commitment and ownership ■ Alignment and prioritization across initiatives

■ Agree on project goals and objectives, scope, budget, and approve any significant changes

to scope

■ Responsible for day to day project activities and integration across all functional and technical tracks, providing operational support to the project, value/benefits, resources,

organization, communication, structure / standards

■ Prioritization criteria and deployment options ■ Risk management , Issue escalation and resolution

■ Responsible for scope management, communication, OCM and resolving critical issues

■ Accountable for delivery of the program

■ Accountable for final process design and key performance indicators (KPI) ■ Accountable for successful deployment of the common processes across the organization

Operational project staffing, planning and execution, 1st level risk mitigation & p. resolution

Users training and program support, change management, cutover support and execution

■ Time and Budget Accountability

Global Advisory Council


■ Develops strategic process and tech roadmap for process change in respective area ■ Process lead and expert and business lead on process change initiatives

■ Governance lead over all requests for process changes in their process area

■ Responsible for integration with other process leads on change impact reviews ■ Jointly creates and owns process capital plans and programs with IT and SSO

Business teams have traditionally been organized around functions (even in the

project), so transitioning to a true process approach (“Procure-to-Pay”, “Record -to-

Report”, “Hire-to-Retire”), is just starting. Procure- to-Pay” has been established, but

the others have not.

22

Summary – While there were many opportunities to improve

our program, these were the key areas where we found high

impact items

• Governance and project set up

• Team selection

• Change management


Our program is still in the implementation phase and learning

is being applied to each new region going forward.....

Historically, adjustments on approach in these areas for our 1st or 2nd

go live would have made a difference in our program......

gerry gluscic newmont mining corporation€¦ · 12/9/2012 · organization change management ......

Documents