Queensland Nickel implements new ERP & HR systems

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Published on the 25/02/2014 | Written by SAP

AT A GLANCE

Queensland Nickel Pty Ltd

INDUSTRY

Mining & Resources

BUSINESS OBJECTIVE

Replace existing ERP, infrastructure and user systems in tight timeframe with no opportunity for an extension
Migrate from a multinational integrated shared service operation to a standalone business

SOLUTION

SAP’s ECC6 Business Suite
Professional services provided by NTT DATA Business Solutions

THE BENEFITS

An integrated foundation platform to enable growth
Delivered on time and under budget with no impact to business-as-usual operations
New Business Warehouse and BusinessObjects capabilities

FOR MORE INFORMATION

SAP
P: 1800 287 727
E: info.australia@sap.com
E: info.newzealand@sap.com
W: www.sap.com/australia

When BHP Billiton decided to sell Queensland Nickel, the new standalone business was faced with a fixed deadline to be up and running with its own SAP system…

Queensland Nickel operates the Yabulu Refinery north of Townsville in Queensland, and processes high-quality nickel and cobalt from third party mines in New Caledonia, Indonesia and the Philippines. Previously part of the BHP Billiton group, Queensland Nickel was sold in July 2009 to companies owned by Professor Clive Palmer. Queensland Nickel had operated in an SAP environment for some years, and was moved into the BHP Billiton global SAP environment two and a half years before the sale.

The newly-sold company an effectively standalone organisation one month after the transaction date, but as this would not provide enough time to transition the SAP system, Queensland Nickel negotiated a transition agreement enabling it to operate for six months on the BHP system. The deadline for Queensland Nickel to be operating independently was set for 31 December 2009.

Queensland Nickel chief financial officer Basil Ahyick says the company had to make a decision about replacing the full ERP system. “The objectives for that decision were the amount of time we had to transition to a new system; the operational stability, as the plant had to be humming and running at capacity as we came out of the previous system; and setting up a good foundation for the future in terms of how we would translate and interpret our business information.”

As a resources company in the complex minerals processing industry, Queensland Nickel had some particular technical challenges. “We are similar to a manufacturing facility, so we have quite complex processes for transforming ore to metal. Our ability to continue to translate the production information into business support and financial information in a timely manner is critical. It is a continual challenge to marry our ERP with our process control information and to continually provide updated targets and operational data back to the operation, and to translate that information into key performance indicators that is available to the whole operation,” Ahyick says.

A deadline’s a deadline
There was an immovable deadline for the project. Queensland Nickel would have no access to the BHP Billiton systems after 31 December 2009. This brought the Go-Live date back to 30 November, resulting in a four-month timeline.

“We targeted very specific SAP resources that we knew had worked with the BHP Billiton group before, or had worked on our previous implementation of the global SAP system in BHP, so we didn’t have a learning curve in our business,” Ahyick says. “We pulled a team together very rapidly and obviously we took an approach of ‘vanilla’ SAP. We were not going to customise unless it was absolutely necessary, and we needed to look at how varied we were in our processes from the vanilla SAP world.”

NTT DATA Business Solutions (formerly Extend Technologies) came on board as a strategic partner with independent consultants to assist with various aspects of the SAP project.

From an SAP perspective, the key objective was to implement a contemporary version of the system. While there was some discussion about whether Queensland Nickel’s new SAP system should essentially duplicate what they had operated at BHP Billiton, the team instead opted for SAP’s ECC6 Business Suite, which included functionality for managing finance, supply, maintenance, sales and marketing, payroll and HR. The business also chose to implement SAP Xi for integration and SAP’s BusinessObjects reporting suite for advanced business reporting.

“As a result of that, our ABAP [SAP programming] work was quite limited, and it was mainly around some reporting. Nearly all the process work was very straightforward in all the systems, because we had a broad coverage of SAP previously,” Ahyick says.

The HR element
NTT DATA Business Solutions’ SAP Qualified HCM payroll solution template was used as the starting point for the HR/Payroll implementation and helped to accelerate the process, as well as reducing overheads for support and upgrades. The SAP HCM modules that were included within project scope included:

Personnel administration
Organisational management
Time management (including cross application timesheet)
Payroll
Employee self service
Manager self service

The HCM Payroll solution covered 800 employees with a combination of salaried and waged (EBA) groups across monthly and fortnightly payroll frequencies.

The NTT DATA Business Solutions HCM payroll solution template was applied to Queensland Nickel’s consolidated ECC6 system in mid August which provided a time frame of three months to complete system configuration from the template base-line, unit, integration and user acceptance testing, data migration and finally training delivery in order to meet the go-live deadline of 30 November. The implementation adhered to the overall project approach of ‘vanilla’ SAP with no customisation.

In addition to the core HCM Payroll modules, workflow was implemented to support leave and time-sheet approvals through employee and manager self-service. HCM roles and system authorisations ‘with context’ were also implemented, providing a robust structural authorisation for HR data and a workflow solution that leveraged Queensland Nickel’s HR organisational structure, within SAP.

Ready for go-live
All HCM modules went live successfully on 1 December 2009. The first fortnightly payroll was processed on 9th December and the first monthly payroll on 11th December. Both payrolls had been fully reconciled and balanced in SAP well in advance of their process day to ensure all employees were paid correctly and on time.

The SAP project obviously had interdependencies with other streams that were running. Open communication was absolutely critical to making sure that on a daily basis any of the latest potential impact points were managed and resolved. Despite the high-pressure situation, the project was delivered on time and on a tight budget. This was due to some very tight controls of the project, according to Ahyick.

“It was full on. We had to bring in the right team, we had very strong management support behind the project, and made sure that we had a very rigid time frame and we had full back-end failsafe where we needed to. It required rapid decision making and very few customisations unless they were justified,” Ahyick says.

‘No surprises’
From the partners’ perspective, with no margin for error, the project team had to be able hit the ground running across a very broad project scope.

“The challenge was really to pull together a team that absolutely knew the industry, so it could sit down with the business specialists from Queensland Nickel and speak the same business language from day one,” says Tony Parvin, who manged the entire SAP project.

With such a tight timeframe for the project, the team couldn’t afford to be held up at any point, so adopted some approaches specifically to keep things moving along as quickly as possible. From July, all the work was done onsite, so the team largely lived in rented apartments in Townsville and worked at the refinery.

Steering committee meetings with the executive of Queensland Nickel were held every fortnight, and this strong executive support and availability was key to keeping the project on track and achieving its objectives. With a project slogan of ‘no surprises’, an open project room helped ensure everything was on the table.

“Basically the entire team of business specialists and SAP specialists were in a big open area, along with myself and the programme manager. We talked across the desks, the protocol and etiquette was good. From day one it was absolutely about open communication. There was no time to convene meetings to deal with issues, they had to be dealt with on the run, so it was very quick decision making involving all the relevant parties,” Tony Parvin says. “We really had an absolutely fantastic team of people from both the business and obviously the SAP consultants. It was an absolutely superb effort from all.”

The hardest part
Working on tight deadlines wasn’t without its problems, however. “Fatigue wasn’t an issue, as we managed that very well. But just running at a high intensity for a very short period of time meant you had to manage different personalities and different views all the time,” Ahyick says. He adds that probably the most difficult obstacle from the business’s perspective was ensuring BHP Billiton was able to keep up with the pace of the work the project team was doing.

There were also issues relating to the very strict protocols BHP Billiton has in place around its information management processes, according to Parvin. “It did present some communication challenges. But we had a very competent team involved in data migration and the senior consultants themselves took a very active role,” he says.

From a technical perspective, however, the biggest problem arose with faxing. “It only lasted a few days, but it’s a bit ironic that the technology that has been around for 30 years actually presented us with some significant technical challenges,” Parvin says.

Perfect launch, ongoing benefits
Not only was the project finished on time, there was a window of opportunity to ensure the payroll and accounts payable was working seamlessly before go-live.

“We could have gone fully live first off, and done the big bang approach. But we were able to run three interim payroll runs to make sure we were on track and we were able to make sure accounts payable was up and running and working as well,” Ahyick says. With the full transfer of data completed ahead of time, the go-live went incredibly smoothly. “The operation didn’t really miss a heartbeat overall, which was fantastic. When we ran live, on the day we cut over, there were no problems. You expect maybe some purchase orders or maintenance requests that don’t get through, but everything just went like clockwork,” Ahyick says.

In terms of benefits for the business, in addition to providing a strong, stable platform for Queensland Nickel to move forward, it also now has Business Warehouse and BusinessObjects capability, which it did not have under the previous ownership. Ahyick says this new functionality supports the company’s approach to business improvement, which translate into KPIs across the organisation.

“It provides us with an awesome foundation because we have very wide coverage of SAP components now. Our full integration of product is giving us an excellent ability to go to the next stage. So the information capability and the translation of our production data into information to feed our business improvement process, is going to be the key that we can now further develop and move forward with.”