Overcoming historical challenges for successful ERP implementation
Globally, there’s been an explosion of merger and acquisition activity as vaccine distribution ramp-ups start to translate into greater economic growth. And climbing to the top of the transaction activity list is the Canadian mining and metals sector looking to capitalize on opportunistic deals.
But as companies start to grow through acquisition, one of the increasing challenges they will have to overcome is harmonizing the organization to achieve tangible benefits, analytics capabilities and reduced operational risk.
Many mining companies end up with multiple disparate systems, depending on the number of assets that they own. Multiple systems often mean additional costs of maintaining different enterprise resource planning (ERP) technologies, plus difficulties making data-driven decisions. It will become quickly apparent that this model just isn’t sustainable. An ERP project is the best way to enable non-system changes that will drive business value.
Harmonizing to one platform isn’t just a consideration for those undertaking transactions either. Even companies who are growing organically may look to revisit ERP strategies to address risks with unreliable data, achieve process optimization or put themselves in a better position for future growth.
Whether it’s to enable a growth agenda or to release pain points that companies want to resolve, this landscape has fuelled a renewed interest in the last year to revaluate ERP strategies.
This isn’t the first time this interest has sparked. Some companies are still paralyzed from challenges seen in previous ERP implementations – and we hear often from executives who highlight a number of risks around prior experiences. So, how can companies ensure they see significant value, control costs and mitigate risks this time around? In a recent webinar, Eldorado Gold shared the main considerations they’ve factored in for success.
First of all, take the time to plan out the objectives and scope of the project. This includes determining what will change from a process, systems, data and people standpoint, and utilizing that scope to estimate detailed costs and benefits. Some companies elect to treat this as an ERP-enabled business transformation and complete a fulsome business case to realize maximum value. Others conduct exercises to opportunistically identify areas for improvement and include the highest value changes in their scope.
This first step is endlessly important and well worth the time and investment. A robust roadmap can reduce project risk, lower overall cost, and improve time to value and predictability in the implementation.
Secondly, the focus should be on a comprehensive, integrated plan. It’s common that mining companies execute transformations in phased steps and begin with support functions that can drive significant value. But the strategy, roadmap and plan should be contemplated holistically upfront.
Lastly, it’s important to identify the right resources to support the project. Implementing a new ERP system, or making changes to an existing ERP system, will require more than just the IT team. It’s critical to have knowledgeable and influential resources involved in the project that understand the business requirements, are empowered to make future-state decisions and can serve as change ambassadors.
Improving aspects of a mining company – from work identification and execution quality, to employee engagement and asset optimization – across various operating sites and assets can be quite complex. By executing a successful ERP implementation plan, companies can reduce the number of systems and risks they currently have, lower overall costs, improve decision making and ultimately drive significant value to the business.
STEPHANIE PORTER is the EY Canada SAP Mining & Metal leader and S/4 Migration leader. She’s a partner based in Toronto. For more information, visit www.ey.com/en_ca/mining-metals.
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