best strategy presentation de beers e business programme

The De Beers e-Business Programme:‘From Strategy to Adding Value …’

3rd Annual SA Best Strategy Practices Symposium

21st August 2002

Midrand, South Africa

“To fully exploit all e-business opportunities to transform De Beers’ way of doing business, internally and externally, in a way that creates value for stakeholders, especially shareholders ”

De Beers e-Business ProgrammeAugust 2002 2

What is De Beers?

n World’s No. 1 Producer of rough Gem diamondsð 12 mining complexes across southern Africa

ð 45% of world production in 2001

ð Probable reserves spanning 8 years at current production rates

n World’s No. 1 operation in sorting, valuing and marketing of rough Gem diamondsð Supplied 60% of world requirements in 2001

n Global end market ð $55bn sales of diamond jewellery in 2001 world-wide

n New Strategic Plan


Agenda

n Strategy

n Business Case

n Governance

n Capabilities

n The Future

De Beers e-Business Programme


From supply control to driving demand

Controlling supply as custodian

Driving demand as leader

Strategy- De Beers’ strategic thrust


US$3 bn

2000

US$10 bn

2010

Strategy- The Corporate BHAG

Diamond Business Value at US$10bn by 2010


As is Plus

Significantly improving operating efficiencies and economies

From seller of last resort to ‘Supplier of Choice’Supplier of Choice

Driving greater demand by working more closely with our customers ( = Sightholders)

Driving Demand

Branding Initiatives

Seeking ways to develop multiple brands, including De Beers, to drive significant additional demand

Strategy- The Strategic Plan


Strategic

Tactical

Focus

BHAG ImpactHighLow

Trade Network

Sightholder Network

GroupIntranet

GroupIntranet

CorporateInternet

Strategy- Connecting to Business Value


n Common global infrastructureð Outsourced for outward facing nets

ð Insourced for intranets

n Common e-Business approach, standards, methodologies, etc

n Single service provider with prime accountabilityð Accenture (SA & UK) in alliance with Microsoft and Tinderbox

ð Gartner providing a strategic quality assurance role

n Single programmeð Spanning all the Functional Units (FU) of De Beers

ð Central strategy driven ‘seed’ funding, with FU justification

n Strong executive supportð e-Business Steering Group chaired by Finance Director

Strategy- E-Business Strategy


n Strategy

n Business Case

n Governance

n Capabilities

n The Future

Agenda



Business Case- Scope

Consolidated eBusiness

Programme

Corporate Internet

Sightholder Network

Group Intranet

Trade Network

Core Group Intranet

Site Migrations & New Communities

Document Management

Knowledge Exchange

Human Performance

Organisational Learning

Core Internet

eRecruiting

Core Sightholders Network

Applications & Announcements

Extended marketing capabilities

Individual capability areasCore applications

Marketing Collaboration & Support

Retail Effectiveness

DTC Reach & Effectiveness

Safety, Health & Environment

StatusCompleted

Completed

Completed

Completed

Completed

Ongoing

Pilot completed

Pilot completed

Proposed

Proposed

Proposed

Proposed

Tangible:Original

BHAG Goals($10bn by 2010)

Intangible:Image

‘Maintaining Position’

Etc.

Completed

Pilot completed

Completed


Sightholder Network Corporate InternetGroup Intranet Trade Network

Contributions to total NPV

23%

2%

39%

36%

NB: Relative contribution

between SN and TN may vary depending on where

sub-capabilities actually reside

Net Cashflow ($)

-8,000,000

-6,000,000

-4,000,000

-2,000,000

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

2000 2001 2002 2003 2004 2005 2006

Business Case- Segmental View


Agenda

n Strategy

n Business Case

n Governance

n Capabilities

n The Future



Governance- Programme Structure

Group Intranet

e-Business Steering Group

Sightholder Network Project n Project n Programme

DirectorTechnical Direction

Business Project Leader




Programme Organisation

Technical Manager

Project Manager Project Manager Project Manager Project Manager

Programme View

• Solution Build Services

• Creative Services

• Outsourcing Services

• CM Cross Project team • Infrastructure

• Solutions (Core Team)

• Security

Business Project Leaders 1… n*

• Project Managers 1… n*

Programme DirectorLegal & Commercial Administration

Project Definition & Planning

Change Management

Technical Management

QualityAssurance

Partner Services Provider

Business View


• Minimize risk & investment loss• Prove the concept • Quick pilots

- clear route to aspirational goal- strong local business sponsorship

Start Smart – Small Pilots that add value but at low risk

• A vision – 3 to 5 years out• Draw on external examples• Think beyond current limitations

Think Big – Aspirational Goals

• Scale quickly – as benefits can be proven• Scale by user, business function or functionality• Leverage new technology alongside current technology

Scale Fast

Pilots

Roll out to wider community

Realise benefits

1

3

2

In general our approach is to undertake pilots first – to prove benefits, test the implementation approach and ensure ‘business appetite’… before scaling

Governance- Implementation Philosophy


Agenda

n Strategy

n Business Case

n Governance

n Capabilitiesð Corporate Internet

ð Sightholder Network

ð Group Intranet

n The Future



Corporate Internet - Overarching Goals

n Promote the De Beers company, not directly our product

n Leverage the powerful reach of the Internet to deliver image-enhancing, authoritative, compelling and timely information to key audiences

n Remain [stock]market responsive, owing to continued exposure through Anglo American PLC

n Provide a world-class site, emblematic of De Beers’ willingness and ability to embrace the new economy

n Through meeting these goals, contribute to the business goals of De Beers in a way which can ultimately be measured

n Promote image of De Beers as ‘Employer of Choice’; support ‘War for Talent’ programme

… The Corporate Internet sites are the public face of De Beers and it’s partners …


Commentary on financials:

n Base case NPV of $325K and IRR of 25%

n Key upside is in e-Recruitment

Commentary on risks:

n One of the strong value drivers behind the corporate internet was removed when De Beers went privateð The corporate internet was originally conceived when

De Beers was a publicly quoted company

ð As a private company the issue of communicating effectively with numerous Shareholders is no longer an issue

ð The lower requirement to distribute materials has lowered the disintermediation benefits

n eRecruiting functionality has been added to the site to drive additional valueð The value of web-enabled recruitment will be dependent

on the numbers of applicants using this facilityN

et B

enef

its

Risks

HighLowH

igh

Low

CoreInternet

eRecruiting

Corporate Internet- Commentary on Risks and Benefits


Searchable applicant database with rich

back-end administration capability

Tracking and reporting on recruiting process

Line Managers submit job vacancies on-line

Immediately accessible by all

employees

Vacancies seamlessly migrated to Internet site


Corporate Internet- Benefits Measurement

Visits: Feb 2001 – June 2002

Visit length: Feb 2001 – June 2002

Benefits Measurement Feb 2001 - June 2002

Top 5 Downloads Feb 2001 - June 2002


0

5

10

15

20

25

30

35

40

45

50

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 0

100

200

300

400

500

600

700

800

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

0

20000

40000

60000

80000

100000

120000


Corporate Internet- Benefits Measurement (e-Recruitment)

Placement & Advertising cost savings

No.of job ads placed

No.of applicants

No.of registered candidates

Over 2,300 resumes in data base

Over 168 jobs

advertised

75% reduction in advertising expenses

0

50

100

150

200

250

300

350

400

450



n Strategy

n Business Case

n Governance



ð Group Intranet

n The Future

Agenda



§ Change attitudes: provide a range of information services that encourage ‘downstream’ thinking … in support of Supplier of Choice.

§ Build partnerships (the core of Supplier of Choice principle):§ Establish a common ethos and identity;

§ Make the DTC, its people, processes and strategies more accessible to clients;

§ Promote the secure exchange of information.

§ Introduce efficiencies§ Govern and manage the common B2B identity - initially the DTC Sightholder

Signature, and eventually the Forevermark

§ Online Applications and Announcements - eventually moving to an ‘active’ online account.

§ Manage the key account management planning cycle

§ Differentiate the DTC as a dynamic, value-adding service provider

Sightholder Network- Overarching Goals

… The Sightholder Network is central to Supplier of Choice - especially in supporting clients’ quality downstream marketing activities



n Base case NPV of $2.97M and IRR of 43%

n High variation in benefits results from level of client user acceptance


n Client acceptanceð The addition of Applications and Announcements

functionality should move take-up towards 100%

n Benefits realisationð The Sightholders Network is core to the Supplier of Choice

initiative. Therefore the benefits gained will be contingent on external factors relating to this critical programme

n Securityð Although a great deal of care has been taken to analyse,

select and implement the security approach, security is a risk, and a high profile security incident would undermine credibility

n Legalð As with other Supplier of Choice initiatives

Net

Ben

efits

Risks

HighLowH

igh

Low

Applications &Announcements

Core S/HNetwork

MarketingMaterial

Sightholders Network- Commentary on Risks and Benefits


Link to Secure Mail Service

Drawn at random from a carousel of current

DTC ‘generic’ consumer adverts. (With click-through background info)


Comprehensive planning info on this category of jewellery


Draft artwork attached in .pdf or .jpeg format

Workflow information


Personalisation determines which client information a user can

view

Provides a history of comments.

Link through to Applications


n Strategy

n Business Case

n Governance



ð Group Intranet

n The Future

Agenda



Group Intranet- Overarching Goals

§ Improve the efficiency and effectiveness of internal communications and information dissemination

§ Improve the capability of the organisation to collaborate, share knowledge and innovate

§ Support realisation of benefits arising from re-engineering of both primary and support business processes (through full or partial web access / enablement of process applications)

§ Support the drive towards ‘one company, one purpose’

§ Support migration from the current 19 divisional / departmental systems to a De Beers Group approach, with common standards (security, technical, brand) thereby reducing long-term maintenance costs

… The Group Intranet is how we will fundamentally change the way we work in De Beers...


Core Group Intranet Site

Finsch

Premier

NewCommunities

EDM

S

eLearning

KnowledgeXchange

HumanPerformance

SHE

The Central group Intranet site

accessible by all employees

Migration of existing and new websites

onto the GI infrastructure and/or

standards

Basic capabilities &applications

Deeper Capabilities supporting particular requirements or business units

The management and/or delivery of learning solutions

using web-based technologies

A collaborative forum to support the development and

dissemination of innovative solutions to business problems

Tools to support the development and management

of performance targets, appraisals, feedback mentoring

and leadership planning

Functionality to support the capture, management and

dissemination of safety, health and environment information

Sear

ch

Web

boa

rd

Cal

cula

tors

Etc.

Etc. Etc.

Group Intranet – Portfolio of projects



n Base case NPV of $1.7M and IRR of 26%

n The large benefits from the high scenario result if the intranet capabilities can be scaled effectively


n The general level of risks of the GI portfolio of projects is low (no external customer interaction)

n However, there are important constraints:ð Variable technical bandwidth

ð Immature Enterprise Directory Services – which significantly impedes usability (multiple logins, login management) and impedes personalisation

ð Multiple data sources residing on different legacy systems

ð Effective strategies to provide framework for deployment and scaling of existing implementations (e.g. Knowledge Management Strategy and Plan)

Net

Ben

efits

Risks

HighLowH

igh

Low

GI Migration&Communities

HumanPerformance

DocumentMgt.

SHE

Core GroupIntranet

eLearning

Knowledge Xchange

Group Intranet- Commentary on Risks and Benefits


Streaming news feeds.

Events calendar

Consistent navigation

paradigm and styles with core

functionality (discussion forums, org

charting, document libraries, search

etc)

Dynamic information

Individual community identity

Each community site contains content and

functionality that is specifically relevant to that community


Group Intranet- Enabling knowledge sharing

‘Knowledge Providers’ ‘Knowledge Seekers’

Typical Characteristics• Deep expertise in a particular area• May know the answer • Willing to share knowledge• Plays this role formally at the

moment – but possibly not recognised for it

• Tells you who the ‘Providers’ are• Tells you what skills they have• Connects Providers and Seekers• Records previous problems and

solutions in a ‘knowledge base’• Tells you where to look first• Records usage

Knowledge Xchange

Typical Characteristics• Struggling with a particular issue• Does not know who to ask or where to look• Knows that the ‘right answer’ might save

time and money or reduce risk

For example, in the Knowledge Xchange (KX), a key step is to identify the ‘informal roles’ that currently exist – and think through the steps required to help people perform these roles more effectively using the KX toolset


Personalised home page, based on subscriptions, challenges raised, and

experience profile.

Full administration features for maintaining users and

categories, as well as, reporting.

Powerful search capabilities.


Group Intranet– Unlocking our structural capital assets

De Beers already has a vast collection of ‘structural capital’, stored and categorised using different approaches at the different organisational units or locations.

‘Structural Capital’That which will be left behind in De Beers should every employee walk out of the door. Examples

include copyrights, procedures, and patents.

Typical Situation• Specialists create ‘structural capital’;• Structural capital is inconsistenlymanaged

across sites/ locations;• Users have inefficient/ inadequate access to,

and awareness of, existing structural capital;• Inconsistent application/ understanding of

security.

• Consistent and efficient categorising and storage of structural capital across sites/ locations;

• Efficient access to stored structural capital;

• Consistent application of security policy across sites/ locations;

• Consistent user interface and navigation across sites/ locations;

• Users determine degree of targeted information;

• Enables optimum exposure/ access to structural capital.

Typical Situation• Struggles with a particular technical or

business issue;• Information overload vs. ‘knowledge

starvation’ (inefficient or insufficient access/ awareness);

• Knows that access to the righ information might save time and money or reduce risk.

‘Users’Employees who need access to available ‘structural

capital’ to perform their tasks efficiently.

EDMS


Allows you to search the document

repository (full-text or meta data only).

Documents may be associated with any number of custom-defined categories.

This allows a document to be

stored once, but be accessible via a

number of ‘paths’.

Subscriptions allow information to be

pushed


Group Intranet– e-Learning

§ Dependent upon attendance & instructors’ skills

§ Instructor explainsjob-relevant situations

§ Timing may not be appropriate

§ High cost, lowlearning retention

Teaching People Things

Teacher

Students

KnowledgeExperience

UnpredictableBusiness Results

§ Puts individual in control of own learning

§ Individual experiences job-relevant situations, in a safe environment

§ On demand at point-of-need

§ Low cost, high learning retention

Helping People Perform

Performing

Performers

SuperiorBusiness Results

eLearning provides a more flexible and employee-centric method of training that helps learners to perform better, faster. It is a fundamental shift in the way businesses can address training needs through web-enabling technologies.

eLearning


On-line submission with tracking and reporting

capability

Support through access to experts

Tracks progress and triggers e-mail

reminders

Repository of useful information always

accessible

Collaboration tools encourage peer interaction

Integrates classroom and web based

components


Personalised learner access to learning

schedule and progressIncludes 50 Courses covering aspects of:

• Self Mastery• Team Mastery• Business Mastery• Technical Mastery• Multi-Culturalism

On-line course registration

On-line tracking and reporting for training

coordinators and administrators

Leaver, Jeff


Group Intranet- Benefits Measurement

Visitors

Average no of visitors per day

Documents downloaded/ accessed:

Newsroom visits

Top pages visited

Top docs downloaded from web

Top documents accessed from doc repository: Jan 2002 – June 2002

July 2001 – June 2002

Over 1,000 visits per

working day


n Strategy

n Business Case

n Governance



ð Group Intranet

n The Future

Agenda



Technical infrastructure: sourcing, security, web content management, standards, etc

E-Business strategy: methodology, governance, QA, contract, brand, technical

Phase 1 Phases 2a, 2b (2001), 3a, 3b (2002) 2003 +

CI

SN

GI

‘Reliance’ XX ?

SN

‘Free toChoose’

(self-managing)

Time

Central Programme investment (£)(actual – money of the day)

3.02M2.54M

2.15M1.16M

e-Business Programme- The Future

Technical -> ITSustainability -> BusinessDevelopment -> Business

Nov 2000 Aug 2001 Aug 2002Apr 2001 Jan 2002

Dev

elop

men

t Pro

ject

s

SN‘Partnership’

NCIü

DCIüCIü

RFP

‘ 5yr plan’c.£20M

GIeL

EDMS

HPKX

GIeL

EDMS

HPKX

‘Backbone’

Limited Complete

Limited Complete

?

Business expenditure

ü

ü

The De Beers e-Business Programme:‘From Strategy to Adding Value …’

3rd Annual SA Best Strategy Practices Symposium

21st August 2002

Midrand, South Africa

“To fully exploit all e-business opportunities to transform De Beers’ way of doing business, internally and externally, in a way that creates value for stakeholders, especially shareholders ”