Over the last few years, there has been a lot of conversation around the sales…
Mining companies have been at the forefront of technological innovation, which enabled them to best discover deposits, extract them in a safe and environmentally conscious manner, and deliver them to customers. Inspired by their success, and eager to realize further competitive advantages from technology introductions, these same companies have been looking for new digital technologies to improve their financial functions.
Within the Office of Finance, forward-looking mining operators have invested in significantly improving their Business Planning & Analysis functions, but there is still room for improvement. In particular, Business Planning & Analysis can benefit from a digital transformation; one that provides greater reliability in forecasting. This transformation can unify data from multiple sources to optimize planning, performance monitoring, and decision-making.
However, a mining organization must keep in sight the goal of rebalancing efforts within the system to spend less time on data collection, yielding more time for sensitivity analysis, scenario planning, and improved resource allocation and prioritization. The reporting and analysis typically done in siloed software and solutions limit a company’s integration, standardization, user access, and governance. So how can Integrated Business Planning (IBP) overcome these limitations?
This is where a mining company’s Office of Finance can take advantage of the latest in IBP systems, or platforms. They draw real-time data together into visualization and calculation tools that show one version of the truth. This in turn improves the overall efficiency of the company, empowering teamwork among multiple stakeholders.
Combining strategic, operational, and financial components, IBP platforms deliver strategies, actions, and outcomes in many forms. These forms include dependable, long-term planning and long-range forecasting (LRF) models, as well as annual budget ‘builds’ – whose execution plans mesh perfectly to produce annual, 18-, 24- and 36-month rolling forecasts. Then, using dashboards for ease of Reporting & Analysis, an executive team can determine the best scenarios for optimizing life of mine (LOM) / life of business (LOB) realities. This will provide 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 can then be incorporated into the 3-5-year plan and/or LRF. 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 medium-term plans fed into the IBP platform can be used to prepare detailed site execution plans and annual budgets, providing a rolling monthly forecast that reflects the actual performance and serves as a monitor. In addition, regular Reporting & Analysis is put in place to support performance management, identify gaps to agreed-upon targets among different planning elements, to support decision-making at the different levels.
By improving operating processes and procedures, the strategic benefits of better planning, budgeting, and forecasting become attainable. Other benefits include faster scenario analysis to support decision-making that is both robust and based on key value drivers. A culture aimed at continuous analysis and improvement, in turn, ensues, delivering updated, rolling forecasts. The Operations Plan benefits by having direct linkages, based on true value drivers and activities. The integrated reporting and analysis that results will leverage an organization’s existing tools to provide timelier, transparent, and flexible reporting solutions.
Data-wise, IBP solutions deliver a single, common source of readily accessible data, rooted in the reality of user needs. Multiple uses proliferate from this commonality, including a “single source of truth” for the 5-year plan, budget, forecast, and analyses.
Other benefits include:
The way forward for mining companies to improve co-operation among departments, providing all with real-time data, analyses, reports, and projections is by increasing investments in digital technologies. As the field operations have used machine-and-sensing technologies to accomplish their tasks, so too can the Office of Finance accelerate and optimize corporate and department decision-making, using the latest IBP software solutions, hosted in the Cloud.
For these IBP platforms, mastering and unifying data to provide integrated planning across multiple time horizons will reduce data-collection tasks, and make the results verifiable and sound. Deliver the applications and data in visually pleasing and effective dashboards, and the way forward will be clear. Corporate and departmental decision-making made easier and more reliable by IBP platforms can raise mining companies to new heights.
Join KPMG, Dundee Precious Metals, and Board International to discover how mining companies are using digital technologies by watching this on-demand webinar, in partnership with MiningGlobal.com