SAP dumped by Australian mining giant Newmont

Goldmining giant Newmont Mines is migrating its Australia and New Zealand SAP applications to software from Brisbane-based Mincom.

The migration follows the merger of Newmont USA, which was an established Mincom customer, and Normandy Gold in Australia, a SAP user.

The Mincom win is part of a fierce bidding war by IT vendors targeting Australia’s mining industry which has undergone a boom in the past year with pre-tax profits jumping from A$5.1 billion (US$3.9 billion) to A$17.5 billion.

Responding to the Normandy migration, SAP Australia spokeswoman Jennifer Roach said it was simply part of a broader trend by enterprises to standardize on a single platform.

Roach said Rio Tinto is a prime example, pointing out that the company is currently converting from Mincom to SAP.

She said BHP Billiton, with market capitalization of around US$90 billion, is adding extra functionality to its global SAP system, introducing Supplier Relationship Management (SRM) software to enhance its supply chain.

This was also central to Newmont’s IT strategy with a case study published on Mincom’s Web site stating that the company wanted to “reduce costs and improve efficiencies” in its supply chain by becoming a participant in the mining industry e-marketplace, Quadrem.

“The majority of its operations are in Nevada USA, Yanacocha Peru and Batu Hijau in Indonesia,” a statement said. “These are very remote locations and all were running different versions of Mincom’s ERP software. With the acquisition of Normandy Gold in Australia (now Newmont Australia) there was the further complication of incorporating the existing SAP enterprise management system into the mix.”

In a posting to the online forum dated May 2003, Newmont Mining employee Cayce Rivers wrote: “I work for a mining company and we have 2 ERP systems globally – we will be migrating to one in the future. The problem is that we will be getting rid of SAP’s EBP and replacing it with the eProcurement module from our other ERP vendor – Mincom. Do you know of any companies that will do a side-by-side comparison of the functionality gaps in the systems?”

Newmont is using Mincom Axis, a hosted B2B integration service, to act as an e-hub to facilitate the exchange of documents over the Internet directly to trading partners.

The international locations and “the site in Australia where a SAP ERP system was employed”, were connected to Mincom Axis.

Newmont’s head of technology and e-business John Huber spoke highly of the Mincom solution.

“We knew from initial research that by streamlining our processes through Quadrem and Mincom Axis we would save time, money and have a much improved supply chain process,” Huber said.

Newmont’s primary use of Mincom Axis was to provide seamless integration with Quadrem; however, the service can connect directly to trading partners. Mincom Axis can also be used to connect different divisions of the same organization, such as remote mine sites.

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