With Anglo Platinum, BHP-Billiton Energy Coal, Exxaro Resources, De Beers, Impala Platinum, and Xstrata taking the lead, business intelligence (BI) applications from business solutions giant, SAP AG, are becoming the preferred means by which mining groups manage their way through a mergers and acquisitions-dominated market.
So says SAP Africa business development manager, Greg Nethercott. "Growth in the mining sector is increasingly being driven by mergers and takeovers rather than organic growth or the development of projects from scratch.
"Corporate activity in the international mining industry jumped 27% in 2007 to almost 1 400 deals worth around US$160 billion - compared with 2006's 1 100 deals worth about US$140 billion.
"BHP-Billiton's US$ 180 million bid for Rio Tinto was the biggest single event. Already the world's biggest mining group, BHP wants to create a mining giant with a market capitalisation of around US$350 billion.
"Smaller deals include the recent acquisition by Anglo American and Xstrata of Eland Platinum's Elandsfontein platinum project.
"All of which creates an urgent need for companies to be standardised on the same best-of-breed systems. In mining that's not all that difficult because 85% of companies are already on SAP solutions."
"But," says Kurt Lindoor, CEO of Pretoria-based Satreno, an SAP business partner, "there's still an inflationary environment, creating a need to sharply reduce overhead costs - particularly in the face of rising input costs such as fuel, electricity, steel and wages. That's only possible if you find additional ways to streamline your operations.
"And, giant or not, you still need speedier decision-making. That's only possible if you're getting a 360^0, realtime, view of all your operations in reports that help you manage by exception.
"Adding BI functionality to your SAP system enables both."
Nethercott says that SAP's industry wide solution with end-to-end supply chain capabilities, based on decades of experience of enabling mining groups to be more profitable, allows companies to optimise procurement, production and productivity.
"What BI gives you on top of all that is single version of the truth of all your financial, health and safety, production, and marketing information - enabling you to make strategic and tactical decisions that actually enhance performance."
Lindoor adds that, with the stringent corporate governance and transparency pressures that are placed on modern-day mining companies, companies need a single planning and forecasting application. "BI gives you the means to addresses compliance, budgeting, competition, and market pressures while keeping execution and strategy aligned.
"But, for BI to achieve all that for you, it needs to be complete, open and scalable. The most useful solution therefore is and end-to-end one that incorporates data warehousing, data mining, business intelligence tools and pre-defined business content."
Satreno has offices in South Africa, Turkey and the USA.
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