The global economic downturn, coupled with the never-ending need for mining companies to control costs and extract ore as profitably as possible, are the key drivers for considering an enterprise resource planning (ERP) suite in the midmarket mining sector, says midmarket business management solutions provider Softline Accpac Africa sales senior VP Keith Fenner.

In Africa, many mining companies employ ERP systems to support the planning and control of their resources. "Mining companies generally implement a low-level accounting system from day one and later migrate to ERP as they start mine development and production," he says.

Fenner explains that an ERP suite for mining, where cost control is the main driver, is not as straightforward as one would imagine, as a plethora of operations and functions, from exploration and development to production for shaft and opencast activities, needs to be properly managed to deliver a truthful version to the board and the investors. 

The critical foundation for any mine is an end-to-end solution, such as a single instance, Web-based, multilingual, multicurrency and multilegislation ERP suite, which includes the non-negotiable are of finance, as investors in companies from various stock exchanges have stringent reporting requirements and demand instant access to live dashboards of information, he says.

The next layer of competence that ERP delivers for mining is the surrounding supply chain, which is the management of the interconnected layers involved in the provisioning and ultimate delivery of goods to the mine. 

Stock optimisation has also become a focal point as financial resources tighten, says Fenner. Stock-intensive mines are employing integrated cloud-based solutions, which run algorithms overnight and return a dashboard of recommendations the next day.

ERP solutions also assist mining companies in managing and maintaining the assets in which they have invested. ERP solutions provide customisable depreciation models, maintenance schedules, and the ability to accurately measure equipment to ensure reduced downtime, as well as accurate stock availability for repairs.

An ERP solution also enables the delivery of meaningful reports to staff in the field to help improve mine profitability. Mining data used to compile the reports includes multiple sources, such as systems dealing with financials, geological and laboratory information management, production, enterprise asset management, as well as human resources, including payroll and time and attendance. 

Fenner says these data sources need to be reflected in the reports as part of a single intelligence platform.

Softline Accpac, which is a subsidiary of global supplier of business management software and services to small and medium-sized businesses Sage Group, launched its full-service enterprise management software system, Sage ERP X3, in South Africa in 2008 and reports experiencing significant growth in Africa in the last year.

Sage ERP X3 is a complete Web-based integrated ERP system that offers standardised ERP functionality, with integrated financial accounting and global support for all international markets.

The system also improves the information exchanged between external partners, including customers, suppliers and subcontractors.

The network of business partners representing Sage ERP X3 on the African continent has, since 2008, expanded to include representation in Malawi, Lesotho, Swaziland, Mauritius, Botswana, Namibia, Zimbabwe, Zambia, Tanzania, Kenya, Ghana and Nigeria, with further expansion into the African market on the horizon, reveals Fenner.

He adds that Softline Accpac has, to date, trained and certified 253 consultants in Africa.

"With African deployments of the system on par with international deployments, the African market is an important part of ensuring the global growth of Sage ERP X3, as many international companies operate on the continent," says Fenner.

Sage ERP X3 enables broad functionality, while remaining simple to implement and use. It features software integration, which enables the exchange of real-time information and the sharing of a common database and user interface.

The system's integrated design provides all the functions a mining company may currently need and/or need in future by activating the functions when necessary.

Further, the system, which is available in ten languages and is tailored to country-specific parameters and legislation, can be accessed in the same way when using clients’ server or Web mode. It also has a low total cost of ownership when compared with other ERP solutions.

In 2011, professional services firm Deloitte embarked on a partnership with Sage ERP X3 that was aimed at equipping its Mining Shared Services (MSS) division with a cost-effective ERP solution. 

The package implemented at Deloitte comprises an ERP solution, financial cosourcing and outsourcing services, and information technology outsourcing services.  

Sage ERP X3 effectively forms part of a Deloitte service delivery model that enables mining companies to cosource or outsource transactional and knowledge processes and take advantage of the cost benefits offered through consolidating and streamlining back-office processes. 

"Sage ERP X3 allows Deloitte’s MSS division to supply a cost-saving efficiency model to the firm’s clients,” says Fenner, adding that the ERP model enables Deloitte’s clients to save substantial costs within the first two years of use. 

“This makes the initial investment well worth it, considering the return on the investment it delivers,” he notes.

Since the implementation of the system at Deloitte's MSS division, four of its client’s mines have implemented the solution and are showing satisfactory results.

"Unlike some of its bigger counterparts, Sage ERP X3 does not come with a hefty price tag, which makes it the ideal solution in a tough economy.

"We are very comfortable with the product," says Deloitte consulting director Johan Theron.