Problem
Anvil have had numerous challenges over the last few years – operational sites in Africa, an overload of Financial and Operational data, plus the Global Financial Crisis making them instantly unprofitable.

Solution
IBM Cognos Business Partner Cubewise recommended IBM Cognos TM1 through the ensuing years with a series of Proof of Concepts and prototypes to prove the value of the TM1 Information Platform.

Benefits
Multiple benefits have been accrued; the IBM Cognos TM1 single platform has allowed Anvil’s BPA team to “build for the business” culminating in business buy-in for true Responsibility Management at a time when it is most needed.

IBM Cognos TM1 Consolidations

In 2006 Anvil concluded that the business had out-grown their spreadsheet systems and that their ERP system (Pronto) was just that: an ERP system as opposed to a BI tool. Clearly a new BI system was required.

During the procurement process other BI tools were also considered but IBM Cognos TM1 was selected for its flexibility, analytical capabilities, ability to scale/grow and for the ability to integrate with Pronto Chart of Accounts. Once the decision had been made it was not long before Phase 1 of the IBM Cognos TM1 project at Anvil Mining started. The initial objective was to deliver a consolidations model which would reduce the turn-around time required at month end.

The architecture of IBM Cognos TM1 brought in the data from Pronto and allowed the users to view their information pre & post-consolidations. This gave the users the ability to quickly compile reports and financial views of the business.

The project was a major success and dramatically reduced the amount of time required at month-end. In the past it had taken between 22 and 25 days to compile the consolidations which in effect left very little time to analyse the information. By 2010 the month-end process was taking roughly 8 working days which represents a dramatic improvement. Additionally, it has also enabled internal efficiencies - users are now able to focus on managing the business rather than getting swamped by the more routine elements of the work.

Another benefit was that the external auditing & reconciliation process was vastly simplified and culminated in a shorter audit due to the transparency inherent in the TM1 environment.

“Three weeks of help from Cubewise was all that was required in order to

establish a multi-company, multi-currency Consolidation system,”

Lui Evangelista. Group Financial Controller

Global Financial Crisis spins Anvil into Cost Control

The collapse caused by the Global Financial Crisis spun the world economy into a recession and as a result many sectors suffered. The copper price was not immune from this crisis. During the course of the Global Financial Crisis the market price of copper dropped from $4.06 per pound to around $1.28 per pound over a period of only 5 months (July-Dec 2008). Suddenly Anvil’s core business was in danger.

By the end of 2008, Anvil had to make some difficult decisions and had to act fast. They developed a strategy which required them to cut almost all of the capital spending, while managing the company operating costs as closely as possible.

As a result all 3 mines were placed on “care and maintenance” and a $400m capital project at Kinsevere was placed on hold. Additionally the company had to retrench a staggering 1,900 staff members, which reduced Anvil to only about 300. A company whose primary focus had been expansion, was now forced to shift its focus onto “Cost Control.”

In order to respond to the dramatically changing situation, a new Phase of the IBM Cognos TM1 system was brought into play. Now, a rigorous centralised budgeting, analysis and planning system was implemented in order to control costs with increased granularity and more clearly defined responsibility for reporting back to cost centre managers.

Budgeting & Forecasting - the Global Financial Crisis

With clearer cost control and planning rigour, Anvil was able to better position itself to ride out the severely challenging conditions.

However, still critical to surviving the Global Financial Crisis was the company’s cash position. Thanks to IBM Cognos TM1, Anvil found it possible to run multiple scenario analyses very quickly, in order to determine how long it could survive based on how much capital injection might be needed at particular times. Finding a strategic investor capable of injecting significant capital was made all the easier because of the TM1 flexible Management Accounting System.

The next task was to move responsibility for budgets and forecasts out to the operational managers. Says Barclay, “This enabled the Business Planning and Analysis (BPA) team to source information required for managing in real-time, rather than trying to manage based on historic information.

This capability made IBM Cognos TM1 the “go-to” software as a forecasting and budgeting tool. Cubewise was again enlisted to build and advise on what Anvil had created, driving for Best Practices and methodologies as promoted with “Bedrock TM1”. The goal was to enable users to get even more out of the IBM Cognos TM1 models and create buyin around the rest of the company.

Being dual-listed on the TSX and ASX meant that there was an even greater reporting requirement – with a flexible tool like IBM Cognos TM1 it was easy to comply with those requirements keeping the BPA team “lean and mean” but also highly effective.”

Systems always have to reflect the changing nature and business logic of the company but now the road ahead for Anvil is more refinements and deeper modelling for the operational (Life of Mine) model and its accompanying integration of the Cashflow model – the model which was so valuable in the GFC. Finally they will tackle real-time operational physicals from the plants and further dashboard development.