Financial Transformation in Mining: An Integrated Approach

Over the past decade, mining operators have invested in front-end technologies to find, extract, transport, and market their products. But in today’s fast-paced business environment, a similar commitment is needed to modernizing their Office of Finance to improve corporate performance and achieve greater planning accuracy, through precision alignment with field operations, supply chains, HR, and the sales and marketing functions.  

Only by evolving beyond the traditional planning approach – which relies on multiple, siloed data sets and outdated Excel-driven processes – can global mining conglomerates jump to the forefront of the mining industry. To deliver exceptional planning processes that take corporate performance to a new level, a unified decision-making platform is essential; one that aligns different departments, functions, and business partners.  

Integrated Business Planning

Enter the Integrated Business Planning (IBP) model for creating C-suite level efficiency, orchestrated by the Office of Finance. Combining Strategic, Operational, and Financial components, IBP platforms will deliver strategies, actions, and outcomes that delight rather than frustrate the many stakeholders within a mining concern, while facilitating key planning activities, including:  

• Dependable, long term planning/long range forecasting (‘LRF’) models 
• Building of 5-year plans 
• Annual Budgets (supported by the Annual Execution Plans) 
• Rolling forecasts – including 18, 24, and 36-month ones  
• Reporting and Analysis (e.g. Dashboards) for Executives and Managers 

Life of Mine

At the strategic planning level, the organization’s Executive Team will determine the best scenario for optimized life of mine (LOM) / life of business (LOB).  This will provide a strategic background to the business decisions that are made as part of the ongoing business planning process, by creating operational and tactical guidelines to ensure alignment with Executive strategy.  

Selected/aligned operational and tactical options will then be incorporated into the 3-5 year plan and/or Long Range Forecast. The activity level reflected in the medium-term plans will be consistent with operational planning and, as a result, will be more detailed than the LOM/LOB.  

Information from the medium-term plans can then be used to prepare detailed site execution plans and annual budgets.  A rolling monthly forecast that reflects the actual performance serves as a monitor, while regular reporting and analysis will be in place to support performance management, identify gaps to targets (different planning elements), and support the decision-making at the different levels.  

The planning will be based on a common set of business plan assumptions, supplemented with mining-site specific assumptions when needed, forming a fully (or largely) integrated mine/operating and business planning environment. 

The Benefits

• The benefits that an organization should gain from this level of project process improvement, across key areas, include: 
• Improved operating processes and procedures leading to better planning, budgeting, and forecasting 
• Faster scenario analysis to support decision-making that is robust and based on key value drivers 
• Development of a culture of continuous analysis and improvement that delivers updated rolling forecasts 
• Direct linkages with the operations plan, based on value drivers and activities 
• Integrated reporting and analysis that leverages an organization’s existing tools and provides more timely, transparent, and flexible reporting solutions 
• One source of readily accessible data based on user needs and authorities 
• Integrated, transparent, and accessible reporting, with all appropriate corporate governance 
• More effective use of the data based on a single common source for multiple uses 
• Providing a “Single source of truth” for the 5-year plan, budget, forecast, and analysis data 
• Broad and unfettered, role-based access to the business planning software 
• Predictable and manageable costs for the project activities  
• Constant improvement and innovation aimed at enhancement of the new solutions service, performance improvement, and cost management 

Conclusion 

By fostering co-operation among departments and providing them with a single, up-to-date version of ‘the truth,’ mining companies can reduce operational risks and improve productivity. That strategy can be fulfilled by increasing investments in digital technologies, foremost of which are Integrated Business Planning (IBP) platforms. These IBP platforms integrate planning across multiple time horizons, reducing the time spent on data collection while increasing the veracity and timeliness of the data. These platforms also combine applications and data in visually pleasing and effective dashboards, which accelerate and optimize corporate and department decision-making. What are you waiting for? The time is now.  

To find out more, join KPMG in Canada, Dundee Precious Metals, and Board International to discover how mining companies are using digital technologies - sign up for this forthcoming webinar on Thursday April 8 / 5pm GMT/12pm EST:

“Integrated Business Planning for Mining: Data, Analytics & Digital Planning Trends in Mining Companies” 

About Board International 

Board is the #1 decision-making platform. Founded in 1994, Board enables people to have a transformative impact on their business, helping them to intuitively explore and leverage their data in a flexible, all-in-one decision-making platform. By unifying Business Intelligence, planning, and predictive analytics, the Board platform allows companies to produce a single, accurate, and complete view of business information, gain actionable insights, and achieve full control of performance across the entire organization. Thanks to Board, more than 3,000 organizations worldwide, including Coca-Cola, Ricoh, KPMG, Puma, Siemens, and ZF Group, have deployed end-to end decision-making applications at a fraction of the time and cost associated with traditional solutions. www.board.com 

About KPMG in Canada  

KPMG ‘s Advisory professionals work with mining companies globally to to improve and enhance finance processes with technology, including EPM software implementation services. We develop practical recommendations designed to help finance teams work smarter, shifting from the traditional compliance function with automation, streamlining processes, and improving performance reporting to provide more business insight.  

KPMG has more than 7,000 professionals/employees in over 40 locations across Canada serving private- and public-sector clients. We are trusted advisors to Canada’s leading organizations. They choose us because we are known for our talented people, deep technical experience, industry insights and our ability to get the job done. www.kpmg.ca