Alacer Gold turns ERP refit project to Australia

Mid-tier miner Alacer Gold is turning its attention to an enterprise resource planning system replacement for its Australian operations, having completed similar works overseas.

(Photo courtesy: Alacer Gold)

The Colorado-based company is the product of a 2011 merger between Turkey's Anatolia Minerals and Australia's Avoca Resources. The latter had mines around Kalgoorlie in Western Australia.

Chief information officer Cheryl Tilly told last week's SAP SapphireNow event Alacer had replaced Microsoft Dynamics AX at its corporate office and Turkish operations with SAP's Business All-In-One for Mining over a four-month period commencing late November 2012.

The SAP system, implemented under the codename Project ATOM, went live in Colorado and Turkey on April 1 this year.

"Australia's the next phase," Tilly said.

The Australian operations currently run a Pronto ERP system. No further details were provided about timelines for the upcoming Australian portion of Project ATOM works.

Tilly said Alacer's executive leadership team and board decided to implement a single global ERP system in May 2012.

SAP was selected relatively quickly, despite initially not being considered as an option.

Counteracting ERP's truisms

The tight implementation timeframe meant ignoring some of the "truisms" typically associated with successful ERP projects.

"I began implementing ERP products in '94, and as many of you who have done this over the years know there's just some certain truisms when you're doing ERP about how to do it right, around communications and change management and planning, and we really didn't do any of that this time," Tilly said.

"That's how we did it in four months, to be really frank."

One such truism is having IT run a predominately business-driven project.

"When I approached the ELT [executive leadership team] and the board to sell this project, I was very adamant that I could not be the face of it because we've all been told IT should not run these projects — this is a business transformation project, it's not a technology project," Tilly said.

"So when they said, 'Cheryl you have to because no one else has ever done it and we want you to do it', I was like, 'Ugh, this is a slippery slope'.

"Now I'm on the other side of it ... I think I want to buck that theory. I think IT can run your business transformation project and I think IT can do it quite well.

"It's really more about who your sponsors are in the business and if they trust you. And if they trust you there's no reason why you can't do it."

Alacer kept to schedule by not "over-thinking" the project and by nipping scope creep in the bud.

"Our scope kept to the current functionality [in the existing ERP systems]," Tilly said.

"Every time I sat down with a business owner that wanted to add scope, my first question was, 'Can you not go live without this?' And they would say, 'Well, I can go live but I'd rather have it... '.

"OK, that's the end of the conversation. If you can go live without it you're not getting it, so let's move onto the next thing. We really kept it down to that and set that expectation early."

Choosing who needs to know

Tilly said Alacer kept the project on track by limiting communication to certain parts of the organisation.

"Unless it directly affects their cost and revenue centres, there's a lot of people in your organisation who really don't need to know very much about it," Tilly said.

"That's another one that's completely counter to what you're told in project management, but [once] you start to involve people and get them to feel like they really have a lot of influence and it doesn't impact their area, it doesn't make for a speedy project."

The project's own steering committee saw "a minimum of communication".

"Why was that? Because the sponsors were the ones that were really materially impacted by this project," Tilly said.

The project sponsors are the global CFO and the president of Alacer's Australian operations.

"The rest [of the steering committee] kind of had an interest or they might want to know, but the reality was it wasn't really going to impact them as much as everybody else.

"We didn't want to get into this whole quagmire and just spin into people, politics and the whole nine yards about empire-building and who owned what. We don't have time for that".

Tilly said steering committee meetings were held monthly, but communication with the project sponsors "on what was going on with their teams and what they were doing" occurred "almost daily".

"Frankly, you can't do that unless the project sponsors have the trust of the rest of the executive teams. And as a project owner they had to trust what I was doing, otherwise that wasn't going to work."

Alacer borrowed the concept of holding daily stand-up meetings from the Scrum agile methodology.

"We made sure that every single morning we had everybody out for 15 minutes of standup, not a meeting in a room, to say what their tasks were for the day," Tilly said.

"It really brought some accountability that people had to say what they were expected to deliver that day because someone else was waiting for it."

The company did reserve time to communicate with some of the project's pessimists.

"We had a lot of naysayers either because they didn't want change, because they didn't believe you could do SAP in four months, because they didn't believe they could keep to a scope — [for] a variety of reasons.

"And one of the things we made sure was that when we had naysayers, I would talk to them but I also made sure that I got the other executive leadership team members to address them as well, and our GM [general manager].

"So it wasn't just me, it wasn't just the sponsors. Everybody had to go talk to these folks and we did it repeatedly."

The project team also spent a considerable amount of time in a back-and-forth conversation with various stakeholders to iron out key concerns.

"We were probably doing that for the first three months," Tilly said. "You can't underestimate the time it takes to alleviate someone's concerns".

Alacer also took lessons from ensuring that finance, supply chain and plant maintenance — the three areas where SAP is being deployed — "were all talking to each other about their integration points".

"They were in silos for a lot of the project just doing their own thing without that integration point," Tilly said.

Read on to find out how the project team knew it had secured the right internal resources for the project.

If it hurts, it works

Although Alacer ignored some of ERP's common truisms, others emerged for the company following the first phase of the SAP implementation.

"Every time you do a project like this you say, 'We have to have the best resources', and operations might give you someone really good and they might not," Tilly said.

"When I went out to Turkey prior to the go-live and talked to the plant manager, and he was really upset with me because the person that we had taken had really hurt his operations being on our project, then I knew we had the right guy.

"It's one of the things we really stressed with our operations was that if you don't feel it, you didn't give us the right person.

"That is one of the things we all know, but that was absolutely a truism for us."

With the benefit of hindsight, Tilly said she would deploy corporate resources out to the mine sites faster.

"We put North American Alacer resources onsite in Turkey. We were trying to do it remotely for a long time and I wish we would have moved them out there sooner to be with the folks," she said.

"I was onsite [in Turkey] for the last 28 days of the project. I stayed at the mine site and worked with the folks there, we put up a war room and ... just through sheer willpower got [the system] in on April 1st and we went live successfully."