How has your IT operating model changed during the last five years in Metals and Mining industry?
Alpha Natural Resources began as a “roll-up” company with three initial acquisitions of existing coal assets in 2002-2003. An ERP evaluation was conducted at the time and it was decided to implement Oracle e-Business Suite for all accounting functions, including Payroll and HR. Initially, the Oracle Applications and Database were hosted by a third party. As the company grew to $7 Billion in Revenue and 15,000 employees, the Oracle ERP was re-implemented with the R12 offering and the databases were brought on-premise and hosted on Oracle’s Exadata machine. The performance gains were sizable and the Oracle Applications, including OBIEE, enjoyed widespread approval and adoption. However, the bottom of the Coal Market fell out and the company was forced into bankruptcy. Upon emerging from bankruptcy—Alpha was split into two separate companies: Alpha Natural Resources (ANR) and Contura Energy. Both companies featured an employee base of between 2,500 and 3,000 and neither could support the substantial ERP infrastructure that was in place. Contura opted to go with a SaaS model featuring Microsoft Dynamics AX7 / UltiPro HRMS and ANR migrated to Workday Financials and Ultipro HRMS SaaS model. The cost savings for both companies were significant enough to cover the cost of implementing new systems.
1. What is your main goal at Metals and Mining Industries?
Most industry experts are in agreement that the Coal Industry is not dead, but that it will never return to the size it once was in the United States. Till date, there is still an oversupply of coal inventories in the US, and market conditions are challenging due to Natural Gas gaining market share due to new fracking extraction methods. Hence, coal suppliers must take a much more nimble and flexible approach towards information technology and systems moving forward. Our goal is to build a new ERP infrastructure that is robust, as well as flexible, to easily ramp up or down depending on market conditions.
"We have busted through the office confinement, our technology follows us wherever we go"
2. Moving from traditional IT to a service offering model requires a major mindset shift in IT. How did you make that happen?
A lot of the decision making was driven by current economics.