Golden standard of corporate finance: Nordgold's financial planning automation

Nordgold has automated financial planning and budgeting with the help of CN Planning Analytics for Mining Industry, a solution for mining companies developed based on IBM Planning Analytics. IT consulting company Odyssey was the implementation partner.

Fact Sheet

Project:

Automation of financial planning, analysis and budgeting.

Result:

- The implemented solution CN Planning Analytics for Mining Industry allows you to perform financial planning, correct it quickly when conditions change, analyze financial results, and build medium- and long-term forecasts.

- Nordgold created a unified information space for operational and financial data of the company which allows for analysis of the causes of deviations from target indicators within seconds.

- The solution automatically generates management reports after the period is closed. Nordgold has received a convenient tool to manage the life cycle of capital investment projects

Project features:

A unique CN Planning Analytics solution, taking into account the industry specifics of mining companies was created: budget model, cost model, industry KPI, benchmarking with industry best practices as well as a preset block of management reporting.

Project prerequisites

Nordgold is an international gold mining company, one of the market leaders striving for further development and improvement of operational efficiency. To support the achievement of its ambitious goals, the company focused on creating effective tools for management decision making, one of which was a system of financial planning and budgeting. Odyssey Consulting Group was chosen to implement this system as a digital transformation partner. Nordgold set the following goals for the project:

- Speeding up the process of financial planning and analysis,

- Creating a unified information environment for financial and operational indicators in order to conduct an in-depth analysis of the primary sources of data and reasons for deviations from target indicators,

- Forming a single unified management reporting system in accordance with the standards adopted in the group of companies.

Project Implementation

The chosen platform IBM Planning Analytics was suitable for implementing the functional objectives of the project, but did not fully reflect the specifics of the company. In order to achieve the maximum productivity and efficiency of the solution Odyssey specialists made improvements to the budget model incorporated in the solution.

Due to the changes, Nordgold is now able to use the best industry standards (TCC, AISC, AIC) in its financial planning and analysis:

- Relying on advanced industry standards (TCC, AISC, AIC), consider all mining (open pit, underground and mixed) and gold processing methods (CIL, CIP, heap leaching and BIOX),

- Conducting financial planning on a 12 month horizon,

- Analyzing CAPEX projects for stability, impact on company cash flow, NPV, IRR and other key indicators,

-Conducting factor analysis,

- Finding the root source of deviations from targets within seconds.

In addition, the system has been customized reporting modules: the system automatically generates the main types of financial, management reports immediately after the end of the reporting period. The solution also generates dashboards for prompt managerial decisions on key performance KPIs, visualization of the results of plan-fact analysis. The Benchmarking module based on integration with Mitraq data (industry benchmarking tool) was developed in the system in order to compare company's results with the best industry practices and similar data of competitors. As a result, IBM Planning Analytics was upgraded to a stand-alone industry solution, CN Planning Analytics for Mining Industry. The system was highly praised by the vendor in terms of functionality and reflection of industry specifics and was registered in the IBM Global Solution Directory.

Project results

The system implementation made it possible to take into account the industry specifics when calculating the cost price, building a budgeting model and the formation of management reporting, because all the possible types of enterprises with different mining methods are included in the solution. CN Planning Analytics for Mining Industry allows to carry out a detailed analysis of all the company's operations, including CAPEX-projects for sustainability, impact on the company's cash flow, as well as NPV, IRR and other KPIs.

Nordgold has significantly increased the speed of planning and analysis of financial and operational results, as well as the ability to analyze variances using dashboard and visualization systems. Automatic generation of all necessary types of reporting has increased the speed of making key management decisions and freed the resources of the finance function from a large volume of routine manual operations.