Business Chief - ANZ, March 2018

March 2018 • ANZ EDITION

Inside the Supply Chain of Crown Resorts How procurement for a complex, first-class enterprise is handled

Kronos ANZ/SEA CLOUD-BASED SOFTWARE THAT HELPS TRANSFORM PRODUCTIVITY

City Focus: Melbourne WHERE GLOBAL BRANDS ARE CALLING HOME

Top 10 MOST EXPENSIVE RESTAURANTS IN AUSTRALIA

The source of value

Procurement executives across the globe continue to see the potential they can unlock throughout the supply chain. They understand that business today is about engaging, collaborating, adapting instantly to evolving needs, and finding new sources of value. Getting that value, however, can prove a challenge.

FOREWORD WELCOME TO MARCH’S edition of ANZ Business Chief magazine. Our cover feature this month is a behind-the-scenes exclusive interview with Crown Resorts’ Procurement Systems and Compliance Manager Justin Purss.

Purss provides a detailed insight into how the business approaches its supply chain operations, in particular how it used technology to address a pressing challenge. “There was really no consistent reporting ability on our expenditure,” he told Business Chief. “Getting the information out of the ERP system was difficult unless you had knowledge in that area, and when management called for an overview there was a lot of telephoning.”

Another exclusive insight comes from South African mining firm Gold Fields, which discusses its Granny Smith project near Laverton in Western Australia.

Elsewhere, we speak to Kronos about workforce management software, General Motors about renewable energy and Michelle Boucher of Colonial Life about her tips to make working environments more appealing.

This month’s City Focus arrows in on Melbourne, while the top 10 charts some of Australia’s most expensive places to eat out.

We sincerely hope you enjoy the issue, and as always, please tweet your feedback to @Business_Chief

Enjoy the issue! www.anz.businesschief.com www.bizclikmedia.com

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Kronos

What goes around comes around‌

TECHNOLOGY

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Why getting data infrastructure right is vital for modern businesses

Reframing company culture for better workplace diversity

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Top 10 Most expensive restaurants in

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Crown Resorts Limited Supply Chain

Gold Fields Ltd Mining

94 SRA Solutions Technology

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Schneider Electric Energy

116 Heritage Bank Technology

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Kronos

What goes around comes around‌ Kronos ANZ/SEA Managing Director Peter Harte tells Niki Waldegrave how its cloudbased software helps businesses transform productivity

Written by NIKI WALDEGRAVE

L E A D E R S H I P & S T R AT E G Y

Kronos wants 100% of its revenue to come from Software-as-a-Service (SaaS) products by the end of 2018

“

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Y 19 YEARS at Kronos have passed so quickly – I still bounce into the office every day.” Kronos’ ANZ/SEA Managing Director Peter Harte certainly hasn’t lost enthusiasm for his job, and has been instrumental in helping other companies retain such a motivated workforce.

Global leader Kronos provides multiplatform human capital and workforce management software across a range of industries in 100 March 2018

“Embrace technology and make sure you use it in a way that five different generations want to use it” – Peter Harte, ANZ/SEA Managing Director, Kronos

countries, employing more than 5,000 people around the world. The US$1.2bn plus company’s technology streamlines business processes so managers can focus on running the business.

Harte is responsible for the overall management and direction of sales and marketing in Australia and New Zealand, and is passionate about driving a strong, positive staff culture.

Kronos recently came 17th in the 100

Best Places to Work in Australia, and Harte says it’s aiming for number 10 this year.

“The 96% engagement rate we scored is a pretty cool number,” he reveals. “What sets Kronos apart from our competitors is our culture, driven by our CEO, Aron J. Ain. He’s infectious, and people look forward to coming to work because it’s such a fun environment – and you use different things to motivate different people.”

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Xxxxxxx

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Kronos puts 10% of its revenue into R&D each year, ensuring the cloud-based technology, used by its 650 Australian clients, such as Myer, Mater Hospital, PFD and Bupa, is leading edge. The company’s cloudbased human capital and workforce management solutions allows businesses of all sizes to gain a competitive advantage with consistent, real-time employee data. It provides a single-source access across time and attendance, rostering, HR and more, allowing the user to make better, more informed decisions. “Technology is so powerful in keeping the workforce motivated,” Harte explains.

Typically, these solutions were adopted by CFOs and CEOs as a way to cut costs. In today’s environment, executive teams and boards are interested in how the solutions help their workforce become more productive. In 2005, 20% of Kronos revenue came from Software as a Service (SaaS) products. By the end of 2018 Kronos aims to raise that to 100%.

“In the last year, 90% of organisations now want to buy our solutions on a monthly subscription,” adds Harte. “It certainly makes things easier for the customer – it’s very

Kronos puts 10% of its revenue into R&D each year • K ronos employs over 5,000 people in 100 countries • PFD estimates it saved 50% on overheads through Kronos’ Cloud service • B upa Care Services saves an estimated 833 hours per fortnight by eliminating timesheets

flexible and easier to maintain when internal IT resources aren’t burdened with maintaining an on-premise solution. Customers are seeing the benefits of cloud and investing in it.

“Everyone’s talking about artificial intelligence and data analytics, and you need that information to know where your business is going. With artificial intelligence, the software learns from other systems that are out there, which then provides information to companies where they could really change the nature of their workforce.”

Kronos works with some of the emergency services, including police forces and airports in the United States.

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L E A D E R S H I P & S T R AT E G Y “The key thing about scheduling staff in a high security area is ensuring very quick rotation,” he says. “It keeps people fresh, even when there’s a bigger influx of passengers coming in, so the workers don’t get stale in what they do.

Here and in America, we do ‘what if?’ scenarios. Not just with passengers coming through, but you’ve got to look at ‘what if’ a disaster strikes and consider what kind of people you will need to assist. In an emergency, you need a piece of software to proactively manage the right people and skills to handle the situation.”

The arrival of Amazon is a threat to many major retail outlets in Australia.

The e-commerce giant has a ninestorey office in Sydney and is locating its new distribution centre in Melbourne.

Customers in Australia can already order products from overseas, but once the company has a base in the country, shipping times and costs will be greatly reduced, posing an even bigger threat to traditional retailers.

Dubbed the “Amazon Juggernaut”

by Roy Morgan CEO Michele Levine, Amazon’s arrival threatens Australia’s $300bn retail sector. According to Roy Morgan, 54% of Australians over the age of 14 bought a product online over 16

March 2018

three months in 2017, while 25% of Australians shopped online for electronics and appliances. Levine told Business Chief: “that puts Australia right in the firing line”.

Can Kronos withstand what Amazon will bring to the nation? Harte reveals some retailers understand that happy staff and culture equals a better customer outcome. “You’ve got those who are struggling with their balance sheets worrying about Amazon, and figuring out, ‘okay, how do we get the best out of our people?’” He says it’s

“With artificial intelligence, the software learns from other systems that are out there, which then provides information to companies where they could really change the nature of their workforce” – Peter Harte, ANZ/SEA Managing Director, Kronos

easy to sense the culture from a retail outlet the moment you walk in, explaining: “If a staff member greets you smiling, and says ‘hello’, compared to walking into a rival, where everyone looks a little bit scared, with their shoulders down, it’s evident which company is going to be more successful.”

Harte says the two industries where people make up an average of 60 % of its operational costs are retail and healthcare, the latter ranging from hospitals, to medical centres, to aged care. “If you look at healthcare,

everyone’s getting older and living longer,” he says. “The healthcare sector struggles to ensure the anticipated patient demand is going to be fulfilled on a daily basis and that they have the right people with the right skills. We’ve found that especially in the nursing sector, a lot of people left nursing because the companies weren’t flexible enough around their scheduling. The great thing is, technology now allows people to do that. So, we’re getting more women and nurses back into the workforce.”

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L E A D E R S H I P & S T R AT E G Y

Success stories KRONOS AND BUPA Bupa care services is Australia’s leading aged care organisation and operates 60 care homes comprising over 4,680 residents.

Kronos’ system helped Bupa optimise workforce schedules for “optimum staff-to-resident levels whilst providing roster flexibility” and minimised the company’s risk of compliance violations. As a result, Bupa saw itself relying less on agency staff, which lowered this cost from 6% to under 1%

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March 2018

of overall wages, and promoted continuity in caring for residents. The company also praised Kronos for allowing them to increase productivity, estimating that 833 hours of work every fortnight was saved by eliminating timesheets. This allowed the company to put more time into care.

KRONOS AND PFD PFD Food Services, another success story for Kronos, is the largest private food services distribution organisation in the country. It operates in 65 locations across Australia and Kronos

Cloud Services helped it centralise timekeeping, control labour costs and reduce compliance concepts.

The company now uses the Workforce Central suite and has praised its ease of use. Administrative time has been cut down and PFD says that the new method has increased confidence, reduced payroll enquiries by 68% and reduced “out-of-cycle� payments by 84%. PFD estimates that is has made savings on its overheads of 50% as a result of Kronos Cloud Services.

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Kronos insists business leaders must consider what kind of technology needs to be put in place to keep the talent highly engaged, and it invests millions into making it easy for employees to interact with the employers. “Everybody now expects information instantaneously delivered to them on their smartphone,” adds Harte. “I was listening to a millennial recently who was going for an interview at a particular retailer and was aghast he couldn’t access the roster by his phone, saying the company was ‘so 20

March 2018

antiquated’. It puts the ball in the opposite court as it used to be the employers that would have the luxury of picking two people to hire out of 100 people. Now, younger generations of employees won’t work for a business unless it has the tools they expect, which is where we come in.”

Harte says one area businesses need to nail from the start is tailoring their technology and HR on-boarding to make it appealing to a multigenerational workforce. “People are attracted to roles at companies when

“There’s nothing wrong with breaking out into song in the middle of the office, just because you feel like a singsong” – Peter Harte, ANZ/SEA Managing Director, Kronos

they get sold the dream,” he explains.

“But there’s a massive difference between orientation versus on-boarding, and what lets everybody down is that classic HR on-boarding. We’ve all been there. You’re excited. You tell your friends you got the job, then as soon as you walk in … you go nowhere. Maybe watch some uninspiring videos. Businesses have to understand how to motivate and talk to each generation because they expect different things. If you get your on-boarding correct, you’ve got a greater chance to retain staff.”

Most of Kronos’ partnership engagements last for a lifetime because the workforce is always changing in not just the people, but also the demand. Harte says it’s rewarding seeing some of those organisations go from small companies to powerhouses within their industries, and has four tips for longevity. “The first key thing for Australian businesses is to make sure they’re compliant and make sure people are paid properly,” he says. “Trust your employees and look after those people who rely on that fortnightly pay, or face severe brand damage. The second thing is, look at your current staff and think, ‘are they in line with my company strategy, and if not, how can I ensure they are?’ The third thing is, embrace technology. People use mobile devices for almost everything. I text my daughter to come downstairs for dinner now! Embrace technology and make sure you use it in a way that five different generations want to use it.

The last and final thing is, bring fun into the workplace. There’s nothing wrong with breaking out into song in the middle of the office, just because you feel like a singsong.”

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TECHNOLOGY

WHY GETTING DATA INFRASTRUCTURE RIGHT IS VITAL FOR MODERN BUSINESSES Stuart Hodge speaks to experts from SAP, Cisco and Warwick Analytics to outline how quality, effective data infrastructure can help optimise a company’s business processes…

Writ ten by STUART HODGE

TECHNOLOGY ONE OF THE most important hires for companies across most sectors these days is that of the data scientist.

As data analysis and technology strategy expert Q Ethan McCallum observes on his website, there is no point in hiring a data scientist until you have the correct data infrastructure in place. Doing so would be akin to hiring Lewis Hamilton for a racing team, but providing him with a car liable to break down before the finish line. “To invest in such a data infrastructure is to invest in the longterm success of your firm’s data science activities,” Q McCallum notes.

The principal challenges with data come mainly from the volume, the plurality of sources and types, and the discrepancies in how it is gathered, processed and ultimately used.

Sven Denecken, Head of Product Management and Co-Innovation for SAP’s S/4HANA business suite, embraces the challenge of navigating the ever-changing tides when it comes to data. “As a product manager, I’m like a kid in a candy store. I want to use that technology. I want to use that data. I want to use those concepts, but my job is to bring it all together with an actual business process. Big 26

March 2018

“You cannot know exactly what your customers want tomorrow, but you want to predict it as much as you can” SVEN DENECKEN Head of Product Management and Co-Innovation for SAP’s S/4HANA

data is more important than ever and the technology is there to compute it in vast amounts and with great speed.

The more you can virtualise and put into in-memory speed computing, the better you will be able to adapt your business processes. You cannot know exactly what your customers want tomorrow, but you want to predict it as much as you can.”

That’s how companies can ensure proper enterprise resource planning, and that is what the SAP S/4HANA suite does: a real-time

enterprise resource management suite for digital business built on the company’s advanced in-memory platform, SAP HANA, deployable in the cloud or on-premise.

Denecken, not unexpectedly, describes it as “the best enterprise resource planning software on the cloud” barring none, and he was happy to break down what he sees as the prerequisites for any company to succeed when it comes to structuring and interpreting data.

“I would argue infrastructure as a

service, security, and the availability of the data are three key ingredients you need to start with,” he asserts.

Whether talking about unstructured, structured or semi-structured data, Denecken is adamant these different types need to be combined if a company hopes to optimise its business processes. Everyone talks about big data. “I’m actually more a fan of the right data. Big data’s the starting point. It’s a commodity. The right data is bringing you a competitive advantage.

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TECHNOLOGY

“The trick is to analyse 100% of the right data in the right way” DAN SOMERS CEO Warwick Analytics

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“We need to realise that data itself is the new gold. It’s a case of the more data the better, in whatever shape or form: unstructured, structured, or semi-structured; we need to collect much more. The key question is how a company deals with it. For example, text messages, audio, semi-structured data, are much less voluminous… I want to make sure that we process this in the right way. This is where process knowledge and data knowledge need to come together.”

This is also where a lot of companies tend to fall down, according to Dan Somers, CEO of predictive analytics firm Warwick Analytics. “Less than 1% of data is analysed. This in itself is bad, but there are also a lot of types of data which are not very informative.

The trick is to analyse 100% of the right data in the right way. Mostly, people are just deploying analytics for visualisation. Unstructured and text data are very poorly analysed and form the majority of data today.

Much of the time there’s a ‘so what’ at the end of analysis because people are asking the wrong question.

“One example is analysing voice of customer data for topics and sentiment whereas the better

analysis is to validate (remove trolls and statistically validate across all customers removing skews) and then isolate the topics and sentiment which drive customer churn and/or loyalty, as these are the things that predictively make the difference.

“Start with the right question and analyse the right data,” Somers advises. “Then, once you start from there, find the tools that can help, don’t always just do what the data science team is capable of. It must fit the business and be flexible enough to be updated and ‘live’ as things inevitably evolve, rather than bogging the data science team down in curation.”

Being able to do all of these things requires a strong and robust network, or at least one which is attuned to a business’s own requirements and needs. That is very much the ‘domain’ of David Goff, who is Head of Enterprise Network for UK and Ireland for world networking leader Cisco.

“What my team is there to do, and what Enterprise Network is there to do, is to find ways that we can drastically simplify the network or actually make the network intuitive,” he explains. “To make it intuitive – that means to be able to see, 29

to think, and to act itself, without manual intervention requires data.

“Then it’s about how we use visibility of data to be able to inform the network and to ensure that the network is something that adapts and has the rigidity that business needs to be able to capture transitions on IAP, cloud and mobility.” But from a network point of view, it’s less about looking within the data itself and more about how its transportation can be facilitated.

All of the factors outlined so far need to be considered when it comes to how to structure data, but what 30

March 2018

also needs to be remembered is that technology is constantly evolving and that the playing field is always subject to disruption and change.

Goff says he expects “ongoing innovation, creating ecosystems” and Denecken agrees that there is further room for disruption in the data space – in fact, he expects it, saying that anyone who manages to marry “the combination of big data, AI and business processes” will be on to a winner in that regard. He acknowledges that more and more processes are going to become streamlined

TECHNOLOGY “I’m not going to hire a consultant to dig at that for a year – but I will rely on certain market data to sense it, and then based on that sensing, drive my business processes or my automation” DAVID GOFF Head of Enterprise Network for Cisco in UK and Ireland

or automated thanks to artificial intelligence and machine learning.

“There will be always niches where experts and very bright people will find an even better way or will fill in holes,” he adds. “Already today, what we can do with process robotic automation disrupts many business processes. So, would I, today, invest into a short service centre company to outsource labour tasks? Personally, I wouldn’t. I think those tasks will be automated first.

“On the other side, a lot of opportunities will be created. There’s a lot of discussion about things like

access to big data, access with algorithms to make it more intelligent etc., but the closer you get to the business process, the more you will own that piece of the data. The further you go away, the more you will rely on third-party resources. Maybe also to pre-empt it, to pre-condition it, to pre-extract certain data. If I want to know what my customer base is doing, I’m not going to hire a consultant to dig at that for a year – but I will rely on certain market data to sense it, and then based on that sensing, drive my business processes or my automation.”

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BREAKING THE MOLD OF I.T

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PEOPLE

Reframing company culture for better workplace diversity Michelle Boucher, Vice President, Global Talent Management at Colonial Life advises how creativity can be fostered in the workplace

Written by MICHELLE BOUCHER

PEOPLE

Google spent $265mn on a datadriven diversity programme 83% of Vodafone employees say flexible working has helped improve productivity

Boston Consulting Group’s stunning New York office

MOST OF US would agree the greater the diversity of minds in business, the greater the diversity of perspectives, talents and creative solutions.

However, progress of achieving workplace diversity has been surprisingly sluggish. For example, Google’s data-driven diversity program cost $265mn to implement, but still failed to significantly change the composition of its workforce. Such results imply money isn’t everything when it comes 36

March 2018

to implementing diversity initiatives.

However, with the right internal strategies and robust planning, there are steps any organisation can take to help its business embrace diversity.

REASSESS TRADITIONAL WORKPLACE ENVIRONMENTS From interview processes to decision making, most of our workplace environments are built around eye contact, noisy group work and

generally overstimulating settings. But traditional workplace environments and routines may not be for everyone.

By adapting your workplace to cater to a diverse array of age groups, personalities and work styles, you can drive better efficiency and performance.

For example, consider offering the option of open office spaces versus quieter, private working space for your employees, so they can pick an environment where they’ll be most

‘ It’s valuable to move the culture of your business away from being dominated by how many hours employees work in the office’

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PEOPLE 5 tips on how to improve your creative space…

• Allow employees to have a choice of which environment they will be productive in, for example between an open workspace and a quieter, private working space.

• Remember the workspace needn’t be the office and if your organisation offers flexible working, employees can choose their own space, with work from home options proving popular.

• If necessary, make use of virtual technology allowing users to remain in an environment they find comfortable, especially for interviews.

• Subtly encourage collaboration by making sure your office space has ample space to connect and chat, even if this may be in a break area.

• P rioritise organising employee affinity groups; communities within corporations that encourage people with similar experiences and backgrounds to connect.

Adobe’s Lehi offices boast an indoor climbing wall and is part of Adobe’s wellness initiative 38

March 2018

productive. Individuals with autism or hyper-sensitive personalities may need different workplace accommodations, such as changes to lighting or headphones to prevent auditory overstimulation.

Team meetings and brainstorms are central to many workplace routines, but not everyone excels in these conditions. In fact, research by Harvard shows some employees worry about other team members’ views and when they perceive others have more expertise, their performance declines. This is especially challenging for introverted or less confident individuals.

Encouraging a subtle collaborative environment can prevent employees from feeling forced into sharing ideas and concerns. Simple ways to do this include integrating mentoring into everyday practices and modelling collaborative behaviour from the top down.

CONSIDER INDIVIDUAL STRENGTHS AND WEAKNESSES What if we created tailored roles to really benefit from each employee’s unique talents and contributions?

‘ Could your interviews be conducted virtually?

Some candidates may interview better in surroundings that are familiar to them’

Some in the business world are already beginning to think this way: A PricewaterhouseCoopers 2030 report entitled ‘Workforce of the future’ discusses the benefits of workplaces that focus on individual talents to compete in the race to give consumers what they want.

Business leaders can tap into this by developing non-traditional roles that maximise individual strengths and are less reliant on linear thinking. For example, recent ground-breaking research from Johan Wiklund revealed many individuals with attention deficit hyperactivity disorder are great at solving certain types of complex issues in isolation because they become hyper-focused on a problem capturing their attention.

The research also discovered many 39

PEOPLE individuals with ADHD enjoy improvisation, so high-pressure pitches and shifting strategy may be less emotionally and cognitively taxing for these workers. If nurtured in the right way, these skills are extremely effective in business.

While it’s fine to set individual tasks, ensure non-traditional roles still include a collaborative element.

Encourage teams to share ideas and feedback on other workplace projects with each other to ensure everyone feels part of a team and no one becomes too isolated.

PROMOTE FLEXIBILITY AND TRANSPARENCY In a global workplace survey by Vodafone entitled ‘Flexible: friend or foe?’, 83% of respondents said adopting flexible working had helped improved productivity and 61% said it helped increase company profits.

That’s why it’s valuable to move the culture of your business away from being dominated by how many hours employees work in the office.

You can do this by writing flexible policies with work-from-home options and encouraging employees to use that time. Not only does this show 40

March 2018

Instagram’s Silicon Valley office

willingness to support individual needs, it’s a good way to alleviate the additional stress that comes with commuting or having to work overtime.

Help people understand the nuances of their jobs, too. We want to celebrate employees’ unique offerings and diverse perspectives, but we also want them to understand how their individual routines, what they do and why they do it, contribute to overall business success.

About Colonial Life

‘ Encouraging a subtle collaborative environment can prevent employees from feeling forced into sharing ideas and concerns’

CHALLENGE TRADITIONAL RECRUITING PROCESSES Employee Benefit News reports it costs employers 33% of a worker’s annual salary to hire a replacement if the worker leaves the company, so recruiting and retaining the right person for your business is vital.

However, the behaviour of some individuals may run counter to common notions of what makes a good employee.

This doesn’t mean solid communication skills, being a team player, emotional

Colonial Life is a market leader in providing financial protection benefits through the workplace, including disability, life, accident, dental, cancer, critical illness and hospital confinement indemnity insurance. The company’s benefit services and education, innovative enrolment technology and personal service support more than 86,000 businesses and organisations, representing 3.7mn of America’s workers and their families

intelligence and the ability to network aren’t all important skills to have in a workplace. But focusing only on traditional criteria may systematically screen out individuals with unique special talents.

Think about ways you can adapt your hiring policies to encourage diversity.

Could your interviews be conducted virtually? Some candidates may interview better in surroundings that are familiar to them. Or would it be better not to hold a traditional interview at all?

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PEOPLE CREATIVE SPACES AROUND THE WORLD… What makes a creative space?

Good design from the outset certainly helps. Fortune has mentioned some of its favourite offices around the world and these include…

Hyland Software

Adobe Systems – the company’s Lehi office features a rock-climbing wall so employees can take a break but stay motivated to make it to the top. The adaptation is part of Adobe’s wellness initiative and the idea was put forward by staff themselves.

Autodesk – the company’s California office features a green space with deckchairs and hammocks so employees can take a well-earned rest or nap. This is part of a sleek, fresh design.

Hyland Software – the company’s offices feature an onsite barber offering a relaxing wet shave in a comfortable chair.

Boston Consulting Group – the company’s New York offices have 42

March 2018

Zappos office a photo wall which employees can decorate with their own snaps. This touch of personality encourages employees to “own the space” but remains in keeping with the sleek wooden design.

Zappos.com – the Zappos Family office is bright and airy with an eclectic mix of styles and playful features, including a ball pit and stuffed camel.

‘ By adapting your workplace to cater to a diverse array of age groups, personalities and work styles, you can drive better efficiency and performance’

Autodesk’s San Francisco office Adapting how the interview process is structured was a key action taken

by Willis Towers Watson in its bid to attract colleagues on the autism spectrum. Company research revealed a work trial or test can often be a better way to assess someone’s suitability for a role.

CREATE CONNECTIONS While diversity is about celebrating and leveraging differences, no one wants to feel so unique they’re isolated from peers and adrift in the workplace.

Prioritise organising employee resource and affinity groups – communities

within corporations that encourage people with similar experiences and backgrounds to connect.

By providing such avenues for networking, socialising and mentoring, you demonstrate that diverse individuals are not only finding success within the company, they’re willing to help others succeed as well.

With tools like these at their disposal, employees are far more likely to feel part of a diverse yet inclusive workforce.

After all, what really matters is your workforce feels secure in an accepting work environment, allowing them – and your business – to thrive.

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General Motors’ Global Manager of Renewables Rob Threlkeld says right now is the most exciting time to work in sustainability – Business Chief finds out why Written by STUART HODGE

S U S TA I N A B I L I T Y

FF

or a company like General Motors (GM), sustainability is now a vital cog in its global operations.

With businesses now working towards objectives set out in the Paris Agreement on Climate Action, there is now not just an incentive, but an imperative to work towards the goals delineated in the strategy, which aims for a global low-carbon economy by 2050.

Companies have been aware of the need to take a more ecological outlook for a number of years now, well before the agreement was submitted to the UN. A byproduct of this has been an exponential increase in the pace of innovation we’ve seen 48

March 2018

General Motors World Headquarters

in the renewables space across all industries. It’s particularly true for GM, which has signed up to the RE100 agreement, outlining how the world’s most influential companies are committed to 100% renewable power.

That pace of innovation is something that is only set to continue, says Rob Threlkeld, Global Manager of Renewables at GM. He believes it will only get quicker as time goes on. “You’ve definitely seen it rapidly

“From a company standpoint, we’re always looking for the most economic source of generation that we can procure and sometimes getting it to our facilities can be a challenge” – Rob Threlkeld, Global Manager of Renewables at GM

- Detroit, MI, USA

increase in the last five years,” he says, “especially with smart meters and other applications that allow you to choose when you use certain types of electricity – whether it’s green or not – and what the costs actually are.

“It’s also in the transportation sector. Five years ago, there was not a lot of talk around autonomous vehicles. Electrification was starting to just start to come around. We only had the (Chevrolet) Volt at that

time. We’ve now got the Volt and the (Chevrolet) Bolt. But you can see this massive switch to where autonomous vehicles are definitely part of a future with zero crashes, zero emissions, and zero congestion components. You’ve seen this technology revolution in both the utility and transportation sectors. You’re going to see more change in those sectors in the next five years than we’ve seen in the last 50-100 years.”

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BREAKING DOWN GM’S FOUR-PILLAR RENEWABLES STRATEGY… ENERGY EFFICIENCY GM knows that reducing its overall energy consumption, as a company, has a direct correlation to its renewable energy percentages. Whether it’s something as routine as switching out lights to LEDs, GM looks at how it can optimise its energy management systems around its production and manufacturing sites, in particular, to become energy efficient.

SOURCING RENEWABLES Finding out the cheapest and most efficient means by which renewable energy sources can be secured is vital to any company, particularly a global enterprise like GM. The main two methods GM uses to do this is through power purchase agreements or onsite generation.

ADDRESSING VARIANCE AND INTERMITTENCY On the automotive side, this can mean looking at what the company is doing in terms of its advanced transport operations, whether it's battery storage, electric vehicles, fuel cells, etc. On a more general basis it refers to what the company is doing to address the intermittency of renewables on the grid by innovating when it comes to, for example, using new storage technologies or electrification efforts.

IDENTIFYING OPPORTUNITIES The final pillar is essentially how GM really leverages policy and scale to look at green tariffs, opportunities with utilities, and working with regional transmission operators. The company always looks to address the technology transformation that's going on in a way that has a “broader value” to the communities it builds manufacturing facilities on, as well as consumers.

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S U S TA I N A B I L I T Y ENERGY DEMAND Despite these disruptive changes in mentality and attitude, there are still plenty of concerns around where these efforts are ultimately headed. In the US, which remains GM’s primary base of operations, a recent report from the Wind Energy Foundation identified a serious gap between corporate America’s near-term demand for renewable energy and the electricity grid’s ability to meet that demand. Threlkeld says the issues cited in the report are simply part of the natural progression of change.

“I think it’s just part of the evolution of the process,” he says. “Going back five years, as we looked at how corporations such as GM could scale up the use of renewables, it was more around what the companies really need to do in this space to engage with each other. The next logical step was: how do we gauge the utilities, which are really the natural potential owners of the renewable energy assets? That’s where we started to take off as we looked at green tariffs in the US and what utilities were starting to offer.

“The last component in this natural progression is the issue of moving this

low-cost electricity. From a company standpoint, we’re always looking for the most economic source of generation that we can procure and sometimes getting it to our facilities can be a challenge. How do we now engage relevant stakeholders – the regional transmission operators or the independent system operators in this process – as technology drives the future both in utilities and transport? It has to be in a way that ultimately benefits all the customers. We don’t want to do unnecessary upgrades should technology supersede our work.”

ELECTRIC CARS AND THE FUTURE OF TRANSPORTATION While GM has grown to much more than just an automotive enterprise, it makes sense to scrutinise the sustainability of the company’s vehicular operations. The technological transformation of cars into electric vehicles, autonomous vehicles and fuel cells has completely changed the way the organisation now looks at its automotive strategy.

“Where we used to be more worried about the price of a litre of gasoline, it’s now focused on the cost of electricity, 51

S U S TA I N A B I L I T Y and when the consumer actually utilises that electricity,” says Threlkeld.

“You can see transformation with a lot of our efforts in energy efficiency and renewables in support of our manufacturing side of the operation that now impacts the product side.

From a competitive standpoint, they’re really linked together in a way they weren’t before, even a few years ago.

“Last October, we announced 20 new electric vehicles between now and 2023 as we march towards that all-electric future. The ‘zero emissions’ component is an important part of our product messaging and sets a competitive opportunity for us to look at how we viewed manufacturing in the past during our previous sustainability efforts. We’ve always focused the company in that direction. We’ve now got it both on the manufacturing and the product side when you look at the mobility component associated with the future of transportation.”

EFFECTIVE STRATEGISATION AND A SUSTAINABLE FUTURE GM’s four pillar sustainability strategy is fairly straightforward in terms of the goals it sets out and its implementation, but every 52

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decision the company makes is thoroughly considered and well thought out. Threlkeld says it is therefore important to stay on top of what’s happening with regards sustainability and renewables more widely. “I think it’s very important to strategise,” he affirms. “As a person who has always been educated by what’s going on in the industry, I like to read a lot of different articles on what the industry is doing. I need to feel the pulse of some of these technological changes and how they have an impact on the broader efforts in electrification, whether it’s transportation or renewables. It’s really about gaining that knowledge and then being able to strategise

GM’S RENEWABLE GOALS… • ALL FACILITIES TO BE POWERED BY 100% RENEWABLE ENERGY • ALL FACILITIES TO BE 100% LANDFILL FREE • ACHIEVE 20% REDUCTION IN ENERGY INTENSITY BY 2020 • ACHIEVE 20% REDUCTION IN CARBON INTENSITY BY 2020 • ACHIEVE 15% REDUCTION IN WATER INTENSITY BY 2020

HOW ARE THE EFFORTS GOING? “I think it's progressing well,” answers Threlkeld. “I just recently signed two 100-megawatt wind power purchase agreements to supply 100% of our load for seven of our manufacturing facilities in Ohio and Indiana. Those two were some of our largest deals to date and will actually get us to 20% of our electricity being matched with renewable energy by the end of 2018.”

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around all the changes taking place.

Another change that Threlkeld has seen is a move away from simply considering the environmental, operational and potential PR consequences of any decisions regarding renewables, to a situation now where sustainability efforts are as much motivated by financial considerations as the other factors. “In every project we do, we look at it from the financial perspective and obviously pull all the additional intangible benefits, 54

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environmental attributes, the right things for the company to do in our efforts towards sustainability.

Everything we’re looking at is purely driven by the financials now.�

The renewables space, like any other, has its daily ups and downs as demand increases and decreases, despite the generally increasing need for it, and it works similarly on a month-to-month or year-toyear trend. Threlkeld feels that the process of learning when the peaks and troughs happen is an important

“I think battery storage is definitely going to be a disruptor in this space, as well as blockchain and artificial intelligence” – Rob Threlkeld, Global Manager of Renewables at GM

component of integrating the proper generation sources at the lowest cost possible. He is also aware that, when it comes to technology, it’s an ever-changing landscape, and is in no doubt as to where the next disruption may be coming from.

“I think battery storage is definitely going to be a disruptor in this space, as well as blockchain and artificial intelligence,” asserts Threlkeld. “How do you leverage all the technology and what is going on in the systems, whether it’s the grid or an individual

solar array or your home? How do those all integrate together to move the system in a much smarter way so it could deploy generation assets when needed as well as reducing generation assets when not needed, such as charging electric vehicles when the grid is actually requesting you to do so. With those questions in mind, I think artificial intelligence, blockchain, and those efforts are going to be key for us going forward to really leverage this technological transformation.”

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CITY FOCUS

A look at the city of Melbourne, which many global brands have made their Australian home Edited by OLIVIA MINNOCK

CITY FOCUS

M

elbourne is a metropolis that boasts a population of more than 4.7mn residents as of 2016, spread across 31 municipalities. The city is the capital of the state of Victoria and Australia’s second most populous behind only Sydney. In addition to being the common name for the metropolis’ city centre, Melbourne spans an area

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totaling nearly 3,900 square miles.

A DIVERSE WORLD ECONOMIC LEADER In 2017, Melbourne was named as the world’s most liveable city by the Economist Intelligence Unit for the seventh year in a row. The city was recognised for high rankings particularly in the areas of tourism, education, healthcare, sport,

research and development and entertainment. The Global Financial Centres Index consistently ranks Melbourne as one of the top 20 financial centres in the world, with the city coming in at number 12 for 2017.

TRANSPORTATION Melbourne has an extensive transportation infrastructure. The Port of

Melbourne is the country’s busiest in terms of both general and container cargo. Melbourne Airport, also known as the Tullamarine Airport, is Australia’s second busiest. The city is home to the largest urban tram network in the world as well as the country’s most extensive freeway system. It is also undergoing an enormous underground metro construction project.

‘The city is home to the largest urban tram network in the world as well as the country’s most extensive freeway system’

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‘ Melbourne is the location of five of Australia’s largest corporations based on their revenue’ GLOBAL BRANDS IN MELBOURNE According to the 2017 Global Financial Centres Index, Melbourne has the world’s 21st most competitive financial centre. Not surprisingly, many diverse global brands base their Australian operations in Melbourne. In Scoresby, a suburb in the southeast of the city, Nintendo has chosen to set up its Australian headquarters. Two of Australia’s biggest banks, Australia and New Zealand Bank (ANZ) and National Australia Bank (NAB), are based in Melbourne. Worldwide manufacturers such as Boeing, Cadbury, Kenworth and Jayco chose Melbourne as the base for their operations in Australia.

BIG BUSINESS Melbourne is also the location of five of Australia’s largest corporations based on their revenue. Here are the top three: 60

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CSL Limited www.csl.com Founded in 1916 as a department of the federal government, CSL Limited was privatised in 1994.

The biotechnology company develops, markets, researches and manufactures products such as vaccines, cell culture reagents, blood plasma derivatives and antivenom. The company reported a revenue of nearly $7bn in 2016.

Telstra Corporation www.telstra.com.au Telstra Corporation is the leading telecommunications company in Australia and the country’s largest.

It focusses on operating and building telecommunications networks as well as marketing communications products and services such as internet access, mobile, pay television, mobile and other entertainment options. In 2016, the company reported more than $27bn in revenue and a profit of $5.8bn.

Melbourne’s busy laneway and arcade in the CBD 61

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‘ Many diverse global brands base their Australian operations in Melbourne’

BHP Billiton | www.bhp.com BHP Billiton is the largest mining company in the world by market value.

It specialises in metals products such as copper, coal, iron ore, uranium and nickel as well as petroleum products and natural gas. The company reported a profit of $6.2bn and revenue of nearly $25bn in 2016.

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A HIVE OF INNOVATION Melbourne is also an innovative space that supports forward-thinking enterprises and businesses. According to The Martec, a company that seeks

to connect people with technology, job opportunities and more, there are at least 40 Melbourne-based startups that should be on everyone’s watchlist, including the following:

Tribe | www.tribegroup.co Founded by Jules Lund, a radio and television host known throughout Australia, as a way to help him manage his own personal workflow, TRIBE connects leading brands with creators of social media content.

TRIBE recently secured $5.35mn in funding to increase its global reach.

Already, the app boasts 2,600 brand campaigns and 13,000 influencers.

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4.7mn

3,900

The current population of Melbourne

Square miles – the approximate size of the city

Afterpay www.afterpay.com In 2014, Nick Molnar launched Afterpay and disrupted the way that Australians can pay for products.

This easy-to-use process allows shoppers to pay for a product in four equal biweekly instalments.

Afterpay is currently partnered with hundreds of retailers in Australia, 64

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including Hype DC, Cue, General Pants, Topshop, Marcs, Glue and more. Shoppers can use Afterpay instore or online. The startup was the recipient of the “FinTech Innovator in Payments” award at the FinTech Awards in 2016 and was The Finnies’ “FinTech Organization of the Year” in May 2017.

‘ In 2017, Yume Food raised $2.6mn in investments to expand its reach’

Yüme Food www.yumefood.com.au The brainchild of Katy Barfield, herself a food rescue veteran, Yüme Food is a marketplace that seeks to reduce the amount of food waste in the commercial sector. The marketplace serves as a connection point between businesses that have a surplus of food and other businesses that can make

use of it. Currently, 9.5mn tonnes of food is wasted each year with nearly 4mn tonnes of that being from the commercial food industry. Between 400,000 and 600,000 tonnes of that is edible, quality food that can not only be accessed but also used. In 2017, Yüme Food raised $2.6mn in investments to expand its reach.

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T O P 10

Top 10 Most expensive restaurants in Anyone that’s ever declared Australian cuisine to be little more than “shrimp on the barbie” has never been to these fine dining institutions.

Maybe it’s time to hit that expense account…

Written by Sam Musguin-Rowe

T O P 10

10

Prime Sydney

gpogrand.com/prime-best-steak-restaurant-sydney Found at No. 1 Martin Place, Prime is Sydney’s most prominent and long-running steakhouse. What’s more, it claims to have conceived the world’s first meat-only degustation menu. The seven-course journey of Australian steak features Full Blood Wagyu 9+, Black Angus and Angus-Hereford Yearling – each one grilled to perfection, and accompanied with all manner of sauces, plus posh accompaniments like foie gras, quail yolk and truffle jus. Not bad for US$140.

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09

Magill Estate Restaurant Adelaide

magillestaterestaurant.com Though you’ll find it on an urban wine vineyard, this bistro is far from an afterthought with its contemporary cuisine acting as the perfect counterpoint to the relaxed setting. The exhaustive collection of Penfolds wines is obvious and very welcome, yet it’s the nine-course tasting menu ($150) that steals the show.

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08

est.

Sydney

merivale.com.au/venues/est A dining room so dazzlingly white that it’s advisable to steer clear of red wine, est. is a grand, decadent establishment that seeks to combine classic flavours with local ingredients. The $155 tasting menu is delicate yet hearty, with dishes that, depending on the season, may feature butter poached squid with spring peas, sea urchin and Sterling caviar, or Valrhona chocolate mousse with cherries, tonka bean cream, honey and rosemary.

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07

Aria Sydney

ariarestaurant.com Right on the edge of Sydney Harbour, owners Bruce Solomon and Matt Moran have been showcasing Aria’s quayside elegance since 1999. The seasonal tasting menu is $165 a time, bringing together such haute cuisine classics as foie gras, rock oysters and champagne lobster, not to mention delightful curve-balls like chicken with chickpea miso and popcorn cheesecake.

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06

Tetsuya’s Sydney

tetsuyas.com Sat in the heart of Sydney, and with a heavy focus on the Japanese philosophy to embrace natural, seasonal ingredients, head chef Tetsuya Wakuda has devised a degustation menu to be reckoned with. For $185 – and depending on the season in which you dine – you may be treated to spanner crab with custard bisque, slow-braised wagyu, yuzu sorbet, and chocolate stone with honey and milk.

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05

Sepia Sydney

sepiarestaurant.com.au Forget the five-course tasting menu offered on weekdays, serious gastronauts only concern themselves with Sepia’s gargantuan nine-course affair that comes out at the weekend. Yes, it’s $200 a time, and an extra $115 for accompanying wine (pretty reasonable when you consider their best bottle is $1,350), although when dishes entail smoked and chargrilled wagyu, charcoal grilled lamb, and ‘Summer chocolate forest’ with rose geranium cream and crystallised bronze fennel (whatever that is), why settle for anything else?

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04

Quay Sydney

quay.com.au Aussie chef Peter Gilmore has masterminded a tasting menu that brings together classic and modern cuisine. For the former, think slow-cooked quail, razor clams, and hand dived scallops. As for the latter, look no further than his signature ‘Snow Egg’ – a dessert so iconic it became a climactic challenge on MasterChef. All this and more, for just $200 per head (plus drinks).

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03

Attica Melbourne

attica.com.au Voted as Australia’s top restaurant in 2016 by hospitality experts, Attica’s eccentric tasting menu is $220 per person and features brilliantly named dishes such as ‘All parts of the Pumpkin’, ‘Pests of the Neighbourhood’ and ‘Whipped Emu Egg with Quandong’.

The proverbial book is as good as its cover, however, with the restaurant often boasting a waiting list of 3-4 months.

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02

Brae Birregurra

braerestaurant.com From radicchio to boysenberry, kale to purple sprouting broccoli, Brae harvests a whole gamut of ingredients from its own organic farm, from which its daily set menu is born. For $210 (plus $130 if you’d like paired wines), you might find yourself with any combination of the above, and plenty more besides, matched with meat from local farms. Diners, evidently, have voted with their stomachs, as Brae placed #44 among the World’s 50 Best Restaurants in 2017.

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01

Vue de Monde Melbourne

vuedemonde.com.au

“Classical fine dining in a modern context” is how Vue de Monde sells itself on its website. The ‘Chef’s Tasting Menu’, although undoubtedly steep at $220, contains such a degree of creative, gastronomic flair that you can’t help feel it’s worth it. Paperbark smoked asparagus with seaweed and rusty wire oysters, mud crab, striploin with buttermilk, chocolate soufflé with espresso ice cream and, because it’s Australia, kangaroo.

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INSIDE THE SUPPLY CHAIN OF CROWN RESORTS

Crown Resorts is known for its first-class casino, hotel and entertainment facilities in Melbourne and Perth. But how is procurement for such a complex enterprise handled?

Written by John O’Hanlon Produced by Jeff Debicki

CROWN RESORTS

C

rown Resorts is a much larger business than it first appears.

Crown Melbourne, a feature of the city since its opening in 1997, is a massive gaming and entertainment complex boasting more than 45 bars and restaurant spreading across multiple city blocks. It’s become a major destination for Victoria and a magnet for tourists from around the world. Far from being just the best and largest place for gambling in the entire Southern Hemisphere, it offers its visitors cinemas, retail complexes, luxury accommodation and global food experiences from outlets such as Dinner by Heston Blumenthal, which can be found at Crown Towers, one of three hotels on the site. Though city-based, Crown Melbourne is aptly called a resort since it delivers everything a visitor could need, all on one site.

Whilst the Melbourne property is more of an urban resort, Crown Perth has a traditional resort feel.

Though it first opened in 1985, it has been renewed and hugely expanded since Crown acquired it in 2007.

Situated a little further out, it is a major

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destination for the fast expanding city of Perth and is now the largest single-site private sector employer in Western Australia with approximately 5,800 people on its books. It too has a Crown Towers hotel, which opened in December 2016 and features 500 luxury hotel rooms and suites, villas, private gaming salons, restaurants, bars, a grand ballroom, convention centre, luxury retail outlets, resort pool and spa facilities. The success of the business over the last couple of decades is going to be replicated in years to come, and Crown’s energetic chairman James Packer has announced his determination that Crown Sydney, to be built on the waterfront at Barangaroo, will be the best hotel in the world.

Food and beverage requirements for a business of this size form a major part of the supply chain across a very diverse range of categories.

Making sense of the complexity of this procurement challenge is the job of Procurement Systems and Compliance Manager Justin Purss, who reports to Ben Briggs, the Group General Manager of Procurement

S U P P LY C H A I N

“THAT NIMBLE INSIGHT WE GET VIA ZYCUS IS A GAME CHANGER FOR THE COMPANY” – Justin Purss, Procurement Systems and Compliance Manager

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“WE TAKE EVERY and Supply. Purss has more than two decades of experience in the gaming and hospitality sector and has managed analytics and reporting, ERP and procurement data management, cost control and inventory management teams across Crown’s Australian resorts since 2014.

At that time, he says, the available data was held in a disparate manner – each site was responsible for its own information and with very little crossfertilisation within the business. “There was really no consistent reporting ability on our expenditure. Getting the information out of the ERP system was difficult unless you had knowledge in that area, and when management called for an overview there was a lot of telephoning.” He recalls that there was just one individual within the group who knew how to access it all – the spend data was reconciled annually, and preparing that report took up to four months.

Enter smart procurement What was needed was a smart procurement management system (PMS) that would permit the team

OPPORTUNITY WE CAN TO IMPROVE OUR FOOTPRINT AND OUR RELATIONSHIP WITH SUPPLIERS, REDUCING COSTS ON BOTH SIDES WHILE BEING MORE ENVIRONMENTALLY FRIENDLY” – Justin Purss, Procurement Systems and Compliance Manager

to standardise sourcing processes, give clear visibility into the different categories of spending, and streamline the time-consuming manual processes that were being used. The major benefit from this would be that it would enable analytics to be applied through artificial intelligence and introduce a UNSPSC (United Nations Standard Products and Services Code) taxonomy of

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products and services, carry out meaningful supplier performance evaluations across the board, and streamline business processes.

The system chosen to manage all of Crown Resorts’ upstream procurement activity was Zycus. It was selected for its sophisticated functionality, ease of use, interoperability, scalability, and had a local, Australian presence who understood Crown’s challenges and needs. As a result, says Purss, his team can now make sense of category data across all sites. “They have visibility into supply rationalisation

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opportunities, for example, to try to streamline some of our business processes and create efficiencies and savings by leveraging that information.” It means better visibility within the company too, he

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explains. “We have the spend data extracted from our ERP system sent through to a spend analytics module within the PMS, and that runs through a classification AI computer learning platform that understands the data.” Many of different items are purchased every

day. Some are commodity items from a large, contracted supplier, while others are one-off purchases from a small local vendor. The tool understands each of those purchases and categorises them, giving total and immediate visibility.

Now, thanks to the spend analytics tool, the data that could only be assembled periodically can be assembled in minutes rather than months, and the same insight gained into the 90% of the vendor base that accounts for just 10% of the spend. “That nimble insight we get via Zycus is a game changer for the company,” Purss adds. “We can

“BECAUSE WE HAVE THE ABILITY TO LOOK INTO OPPORTUNITIES, WE CAN JUMP ON THEM QUICKLY” – Justin Purss, Procurement Systems and Compliance Manager

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react very quickly. For example, if in a meeting someone needs to know the details of a particular vendor we can check that on the spot instead of having to ask for a week to get the data together.”

It has also enabled the procurement team to set up dashboards for each of the category streams so purchasing staff have visibility into the category for which they are responsible. There’s a wider spend dashboard that gives them the ability to look at specific metrics by setting their own filters. “Because we have the ability to look into opportunities, we can jump on them quickly,” says Purss. “We have saved the company tens of millions over the last couple of years by just having better insight and being able to identify opportunities that we might previously have missed.”

In addition to Analytics, Crown’s PMS also includes Supplier Information Management (SIM), Supplier Performance & Relationship Management, Contract Management, Project Management and Sourcing.

“We have thought about the long term here.

For example, in

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our vendor profiles for the SIM module, we have created a place where we can truly understand our vendors. This has been a big change for Crown and will create efficiencies by allowing a centralised location where all of their company related information and documentation can be maintained,” Purss explains. This has been a major push by Crown to not only ensure compliance but to give their suppliers a sense of inclusiveness and support.

Checking them inward and onward All of this is about business process improvement. It is vital to the health of any modern company: it involves a lot of change management and training and enables employees to be more

productive and happier in their work.

But what about the concrete nature of goods received? Crown Melbourne in particular is located at the centre of a busy and congested city, and getting supplies in when they are needed without trucks backing up at the loading bay is a challenge, especially if for each item paper delivery notes have to be checked against orders and invoices.

Replacing that system with a modern warehouse management system (WMS) became imperative, so the company is currently implementing Peacocks WMS, a highly configurable system that will significantly increase efficiency in delivery receipting and dispatch to the right end-user.

It’s a big change for the vendors,

“WE NEED TO BE VERY FLEXIBLE AND HAVE A WMS THAT WILL FIT EVERY SUPPLIER FROM A MULTINATIONAL TO A LITTLE PRIVATE LOCAL BUSINESS” – Justin Purss, Procurement Systems and Compliance Manager

S U P P LY C H A I N

Crown Melbourne – Welcome to a World of Entertainment

so they were called in to a forum in November 2017 to take them through the innovation and explain the new partnership opportunity it gives both sides. “It creates a lot of efficiencies for them too,” states Purss. “There’s a new labelling system with 3D barcodes on all items, automatically scanned in on arrival, speeding up that process and immediately pushing that information into our ERP to go on to the payment system.

“We need to be very flexible and

have a WMS that will fit every supplier from a multinational to a little local business. We needed to spend time to think through the problem of how to deliver a programme they can all use.

But the system is scaleable. Our larger international suppliers can print their own labels in a way we can accept at the loading dock, while for smaller suppliers we provide a portal they can log into and find all the purchase order information and print labels locally from that order, at no cost to them.”

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Peacocks WMS will be trialled from the end of March 2018 and will be fully implemented by the new financial year in July. This is a tight schedule that has called for close coordination between the Group Warehouse and Distribution Manager and the IT ERP team, which had to ensure smooth connection between the new systems via an API (application programming interface) and the PeopleSoft ERP system. Purss takes his hat off to vendors large and small who have put effort into understanding the system and pretesting the end to end process.

As the new PMS beds in, the benefits of Crown’s existing inventory management system will come to the fore. Stocktaking will always have to have an element of manual input into checking the number of

bottles of gin at a bar, for example, but it no longer involves closing down for the day as staff members tick off items on a paper record. Each month a stocktaking pack including a handheld PDA (personal digital assistant) is sent out to the sites and the inventory recorded in an hour, with the information sent to the ERP system. Managers have instant access to the stock at their site, and the procurement team always have the company wide figures available – just one member of Purss’ team is able to coordinate the stocktake process at 50 different business units in Melbourne. There’s better information, less room for error, and any anomalies are quickly seen, he says. “It is all tied into our POS system which depletes the inventory daily.”

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Responsible procurement for an effective supply chain Readers who saw the Business Chief report on Crown Resorts’ environmental and sustainability performance will not need reminding about the company’s record on CSR and green issues. However, it is worth noting the contributions of supply chain management. Some are simple, like the substitution of returnable and reusable crates for

fruit and vegetable supplies.

“We take every opportunity we can to improve our footprint and our relationship with suppliers, reducing costs on both sides while being more environmentally friendly.”

Purss also draws attention to Crown’s Reconciliation Action Plan, which monitors its involvement with indigenous Australian businesses and encourages supplier partnerships with them. “We seek them out, and help

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1300 262 635 e: info@mandjchickens.com.au or visit: www.mandjchickens.com.au

S U P P LY C H A I N

them with a development plan,” Purss adds. “Many are small scale, niche businesses supplying seafood, herbs or fruit for example, but they are just as important as the multinationals we deal with. We help them to partner with a large concern like us and compete with bigger companies.” When dealing with larger concerns a full supplier profile is drawn up that covers compliance, energy use, emissions, waste policy and human rights among other things, and of course indigenous engagement. Despite the huge purchasing clout of a company with a multiple billion-dollar market capitalisation, it is a matter of pride for Crown that 90% of its spend is within the state in which each site is located.

Crown Resorts is a reliable company to do business with, Purss

emphasises. 80% of transactions at Melbourne, and 70% at Perth where the system was introduced more recently, are completed through evaluated receipt settlement (ERS) matching. This is a paperless solution that automatically transmits a recipient-created tax invoice upon receipt of goods, and schedules payment. “Those vendors with an ERS agreement don’t need to invoice us.

A delivery automatically generates an invoice so we will provide an electronic invoice to the vendor.

Once they receive their payment they will get a remittance advice.”

This is just another example of an innovative, end-to-end business process that cuts out paperwork, making the transaction easier and more transparent for both parties.

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The best is yet to come South African mining company Gold Fields owns and operates a number of assets in Australia: its vision is to be the global leader in sustainable gold mining, with its Granny Smith operation leading the way Written by John O’Hanlon

GOLD FIELDS

“TECHNOLOGY ALLOWS US TO CONTROL A MACHINE A KILOMETRE UNDERGROUND FROM SURFACE” – Andrew Bywater, General Manager: Granny Smith Mine

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MINING

G

ranny Smith mine near Laverton in Western Australia, had been transferred between a number of owners before it was acquired from Barrick Gold

by Gold Fields on 1 October 2013 as part of the purchase of the Yilgarn South operations. The deal included two other gold mines, Darlot and Lawlers. It may not have looked it at the time, given the slump in gold prices, but this has turned out to be a great deal for Gold Fields, which has been able to add significant value to the mine, aided by a gradual recovery in gold prices.

Granny’s promises As part of the Granny Smith deal, Andrew Bywater joined Gold Fields with a brief of turning around the Darlot operation to deliver a profitable operation. Darlot has subsequently been purchased by Red 5 and just under a year ago Bywater became General Manager of the Granny Smith mine, where he has been busy working with fellow leaders and employees.

The main Wallaby deposit was discovered in 1998, with open pit mining commencing in 2001 and Underground mining commencing in 2004, generating over 3.8Moz of recovered gold. Since purchasing the mine, Gold Fields has produced over 1.2M ounces of gold and is spending in the order around $25m a year on exploration in the area to further extend the life of the mine.

Reserves have grown year-on-year and production efficiency continues to improve. “Granny Smith has gone from strength to strength� says Bywater, speaking about

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“WE WANT TO KEEP SUPPORTING GRANNY SMITH AS A GREAT PLACE WHERE PEOPLE ENJOY WORKING” – Andrew Bywater, General Manager: Granny Smith Mine extensions to the Wallaby ore-body, increased mining physicals and improvements to the processing plant.

“A feasibility study has recently been completed with board approval to develop what we call zone 110 - 120.

This is our next mining area beneath

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current workings at a depth of 1200m, a block of ore covering a 900m by 600m area with an Indicated Resource of 6.2Mt @ 7.3 g/t for 1.46M oz’s. This will provide Granny Smith with a great mine life of close to ten years.” And that’s not all. A pre-feasibility study

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will take place this year on further depth extensions to the Wallaby ore-body. There are strong signs that another block of mineralisation at zone 135 can be mined below planned infrastructure he says, adding that the focus this year will be to maximise Wallaby’s potential, thereby maintaining Granny Smith as a worldclass asset. Seven underground drill rigs, operated by Barminco Drilling, are working round the clock to achieve this and advance other targets.

The extended Granny Smith tenements also

holds great potential for future ore deposits. This is not just prospective close to the current workings, but also beyond the main ore body at a newly mineralised zone called Blurry BIF. This project is located within 10km of Wallaby and contains significant gold intersections extending over a 1km strike extent.

Bringing in more production makes sense as the processing plant has additional capacity available.

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Improved Productivity Meanwhile, productivity improvements to the current mining operations are taking up much of Mine Manager Mark Glazebrook’s time. The latest Atlas Copco 65 tonne trucks have increased the payload capacity underground, while future technology opportunities include a staged programme being introduced with the aid of the mining technology specialist Newtrax. Apart from trial technology to gather and store data from mobile equipment, this system will enable other productivity initiatives

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such as monitoring the whereabouts of underground personnel in real time. That will be a further safety advance for the operation.

Automation of heavy equipment is perhaps even more exciting from both a productivity and a safety point of view. From a small control room on the surface mining administration building at Wallaby, it is already possible for an operator to remotely control some loaders that take the ore from the face to the underground stockpile. Cameras give the operator an all-round view and

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the team is establishing technology that will enable remote operating of two loaders at the same time.

Scheduling is constantly monitored and improved through the application of advanced software solutions, such as Deswik OPS, the mine’s latest project planning software. “By catching up with other industries in IoT, AI, analytics and other advanced automation practices, mines will be able to extend operations faster and become safer and more efficient places to work,” Bywater insists.

A paste plant is also being installed

during 2018 which will support back filling of stopes at depth in the mine. Back filling is essential for rock stability and improved extraction rates and is another important enhancement of Granny Smith’s capacity, says Bywater.

Looking after Granny’s family Granny Smith is on target to produce 275,000 ounces of gold at an All-in Cost of around A$1,240/oz in 2018.

That said, the goal is to achieve this in a safe and enjoyable workplace for the 720 people who work at the

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MINING

mine. In previous roles, Bywater has aware of the native flora and fauna, a reputation as a champion of equal and the Wongatha’s relationship to the opportunity for women and true land, their laws, customs and history. diversity in mining. Much of this can be The mine is a popular place to achieved via the company values and work, with shift employees typically this includes a respectful workplace on an 8 days on 6 days off, 7 nights for everyone on site. Women make on 7 days off roster. The camp is up 10% of the workforce at Granny continually being upgraded and has Smith, which he strongly believes can a fully equipped gym, squash and be improved on. Further work will tennis courts. “We want to include advancing the Onekeep developing Granny Team approach and Smith as a great place continually promote where people enjoy Safe-Production. working,” Bywater One-Team means enthuses. On top breaking down of the facilities Number of silos across mentioned, there is Employees at Granny departments and a social committee Smith Mine groups and moving that organises away from the old guests, comedy acts ‘us and them’ mindset. and open performance In the previous 12 months site has nights for employees, bringing facilitated a traineeship scheme for a bit of fun to the outback. truck drivers and other roles which Miners, just like the rest of the has seen a number of local Aboriginal population often face family, friendship people progress to full time jobs. and financial challenges. “We have There is also a cultural partnership increased the accessibility to face with Aubrey Lynch, an elder of the to face counselling,” Bywater says.

Wongatha, the traditional owners of “As well as responding to personnel the mine land, to make employees challenges, our Employee Assistance

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Programme provider is on site regularly to spend time with the workforce in a proactive way. They have established a very good rapport with employees.” By also participating in initiatives such as ‘R U OK day’ the company encourages employees to be aware of the physical and mental wellbeing of their colleagues, to start a conversation if they have any concerns and know when to ask for support.

A Strong Safety Culture Looking out for each other is central to Gold Fields’ values and one of the best ways to show respect in the

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workplace.

“Employees are the best safety advocates we have at Granny Smith. Behaviour-based safety programmes and cultural change are the way forward,” Bywater believes.

“We encourage and support an independent workforce through the Gold Fields behavioural based safety program. The key behaviours include assessing risk, following procedures, managing fatigue and above all, Speaking Up to improve safety. When these behaviours become ingrained in the business, incident rates can reduce by up to 80%.”Opinion Leaders are nominated by the workforce to drive programs such as bringing in external speakers to share safety-related stories and other

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campaigns to help make good safety choices. “This is a very immediate way to personalise our key safety message ‘If we cannot mine safely, we will not mine’,” Bywater states.

Improving safety and employee engagement at Gold Fields includes another important process, Visible Felt Leadership. “This involves supervisors getting into the workplace with employees as they complete tasks, to share conversations about safe work processes and outcomes”

He says. When done right, Visible Felt Leadership makes a difference by reducing recordable injuries and also provides an opportunity for employees to give feedback, share experiences and speak up. A recent safety challenge involved many supervisors completing 100 safety interactions in 100 days. During this time leaders and the workforce stepped up to deliver the mine’s best 100 day safety performance for the year. Bywater doesn’t think that was a coincidence!

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AUSTRALIA’S

DATA GUARDIANS The storage and analysis of data is at the basis of all government, commercial and even private activity these days. With the data storage growing rapidly in Australia, SRA Solutions is poised for an exciting phase of expansion Written by John O’Hanlon Produced by Jeff Debicki

SRA SOLUTIONS

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he city of Queanbeyan, in the south of New South Wales and strategically situated between Sydney and Melbourne, is home to SRA Solutions, formerly known as Server Racks Australia, a specialist in precision steel manufacture and systems integration for the data centre market. It has been honing its expertise in this field for the last 30 years, and prides itself on sourcing its raw materials locally, from a supplier in Wollongong. As well as server racks it manufactures cabinets, termination boxes, and power rails for both government and commercial sectors at its sites, operating up to 21 hours per day, seven days a week, and employing 55 staff. The factory, with administrative and design facilities and 1,500 sqm in size, is located in the industrial area of East Queanbeyan on a 4,000 square metre block. The company runs its own transport regularly between Queanbeyan and Sydney, and has excellent contract freight services for interstate clients.

SRA Solutions is an acknowledged leader in racks, rows and rooms. It aims to give its customers innovative answers in their search for more efficient and affordable IT infrastructure. The company combines state-of-the-art computer controlled equipment with a multi-skilled workforce and innovative manufacturing processes to produce commercial and SCEC endorsed racks and accessories. To guarantee the timely delivery, cost and quality expected by industry today, each rack

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‘THE DATA CENTRE INDUSTRY IN AUSTRALIA HAS SEEN SUBSTANTIAL EXPANSION OVER THE LAST SEVEN YEARS, AND THIS HAS ENCOURAGED INVESTMENT BY GLOBAL PROVIDERS OF COLOCATION, CLOUD AND OTHER SERVICES’

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is manufactured individually, which allows total flexibility in configuration to meet customer’s needs, including custom colours, ventilation and cooling systems and accessories.

Its specialisation in close tolerance laser cut, turret punched and CNC folded components, makes it a preferred supplier of 19-inch racks to IT manufacturers and systems integrators throughout Australia.

The data centre industry in Australia has seen substantial expansion over the last seven years, and this has encouraged investment by global providers of colocation, cloud and other services. Data centres are critical to every aspect of modern society – without them the world would grind to a halt.

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The stock exchanges, all air traffic, communications, social media and the internet would all disappear. We are constantly reporting how more and more large enterprises are moving their critical IT infrastructure from data centres to the cloud, but the ‘cloud’ itself only exists in a network of data centres, linked globally by undersea cables. Organisations have the benefit of downloading infrastructure development, automatic failover engineering, and multiple coordinated power supplies, physical security, backup, OS maintenance, and thirdparty data centres. That’s why “going to the cloud” ultimately makes sense.

According to Frost & Sullivan, the Australian data centre services market will grow by 12.4% each year

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up to 2022, an expansion driven by business, telecoms and government, as well as regular internet users. All the data generated by social media and the things we do on our mobiles and tablets is stored in a data centre somewhere, and Australia requires the internet service providers (ISPs) to store all internet activity, or metadata, for two years. Since they are so vital, data centres are shielded as thoroughly as the mint, as anyone who has visited one will testify. Their construction has to be extraordinarily robust to guard them against storm or seismic damage, and the systems inside them have to be utterly reliable. As servers generate a lot of heat, they have to be constantly cooled by air that is devoid

of dust and contamination, and fire protection systems have to be sound.

It is also essential that the power supply is available at all times.

Among the solutions SRA provides in partnership with major technology partners are the power distribution units (PDUs) that feed the racks, and the uninterrupted power supply (UPS) products from firms like ABB that ensure that backup kicks in without delay in the event of any power failure. To satisfy government contracts, all this equipment is required to meet the demands of the internationally recognised Security Construction and Equipment Committee (SCEC) standard. SRA is a recognised innovator and leader in the development of server rack

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The Critical Component Enlogic Systems designs and manufactures power distribution and management systems for use in the data center industry.

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‘ACCORDING TO FROST & SULLIVAN, THE AUSTRALIAN DATA CENTRE SERVICES MARKET WILL GROW BY 12.4% EACH YEAR UP TO 2022, AN EXPANSION DRIVEN BY BUSINESS, TELECOMS AND GOVERNMENT, AS WELL AS REGULAR INTERNET USERS’

designs, having developed a SCEC endorsed server rack which reduces energy consumption by 30%. This is a key contribution in a market where the pressure is on to reduce the huge amounts of energy needed to run a data centre and its support services.

That product is known as SRA’s iPAMM (intelligent plenum air management module). It features a patented air management system, engineered and manufactured entirely in Australia, to give outstanding energy efficiency, reliability and security and price. SRA has also developed high density server rack solutions (up to 30kW) known as the iPAMM Cell, a stand-alone,

self-contained group of racks which can be fitted with its own dedicated fire detection and suppression system. It’s available in both SCEC and commercial configurations.

Against the background of data centre expansion, SRA Solutions is in the best possible situation for expansion. Let’s take one of its most buoyant markets, the defence industry. In the current fiscal year, Australia’s defence spending is expected to reach A$34.7bn, as much as possible of this benefiting local manufacturers. But defence security goes beyond SCEC compliant products. SRA’s defence ready racks, SCEC cabinets and enclosures

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and its experience in delivering complex projects make it the first choice when it comes to complex turnkey defence grade projects.

SRA’s customers are defence industry technology specialists who provide the Australian government with its future technologies across a wide range of sectors, including, air, land, sea, cybersecurity, intelligence, electronics, telecommunications, services, space, aerospace and ground transportation. As stated in a recently released Defence Department statement: “The 2017-18 budget maintains the government’s commitment to provide Defence with a stable and sustainable funding growth path; extra funding will be provided for increased spending on intelligence, surveillance, reconnaissance, space, electronic warfare, and cyber capabilities.”

To make sure it’s ready to meet future demand, it is expanding its site at Endurance Avenue, Queanbeyan, adding new buildings that provide more multi-purpose space for office facilities, production, and warehousing. According to Managing

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Number of Employees at SRA Solutions Director Gordon Campbell: “SRA Solutions is ideally placed, as a longterm defence contractor, to take advantage of this increased defence spend. The technology industry moves so quickly that we need to constantly innovate to keep pace with the change and being a small company, we believe we’re able to move faster than others.” The new space will directly connect with SRA Solution’s existing infrastructure, growing its total production footprint to more than 4,000 sqm and is planned for completion in the third quarter of 2018. “This expansion is designed to help us grow, as well as facilitate a new approach to the manufacture and delivery of high quality data centre and defence solutions across Australia,” said Campbell.

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HOW SCHNEIDER ELECTRIC’S DIGITAL TECHNOLOGY

IS POWERING THE MINES OF THE FUTURE Rob Moffitt, Schneider Electric’s President – Mining, Minerals & Metals Segment – reveals how the business is leading the digital transformation of energy management and automation Written by Niki Waldegrave Produced by Bryan Giles

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tudies indicate that the world needs to cut CO2 emissions by 50% by 2050 to avoid drastic consequences from climate change.

However, due to population growth and increased urbanisation, at the same time, the world will require twice the amount of energy as today.

To meet that challenge, Schneider Electric is developing intelligent energy management solutions to help businesses and consumers monitor and control energy usage efficiently.

The global energy management, automation and industrial software specialist has 144,000 employees in

more than 100 countries and creates products and solutions to ensure ‘Life is On’ by helping its customers manage their energy and processes in ways that are safe, connected, reliable, efficient and sustainable.

Its integrated solutions combine energy management, automation and software through EcoStruxure™, its Internet of Things (IoT) enabled, open and interoperable architecture.

EcoStruxure™ leverages the latest advancements in digital technologies, such as cyber security, analytics, cloud, and mobility to deliver real-time control and operational efficiency, and

Alliance Partner Sydney 2017

Schneider Electric’s Mining, Minerals & Metals Segment President, Rob Moffitt, reveals how the company is leveraging solutions from its primary domains of expertise – IT, buildings, industry and infrastructure, and utilities – to help companies in the mining sector achieve new levels of efficiency and productivity.

“We see enormous potential in terms of plans for the year ahead and growth,” he says. “From a product and solution perspective, we are a leader in industrial software, power management,

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which includes medium voltage, low voltage and secure power, and in industrial automation and control.

“In 2018, we see a return to favourable conditions, in which we expect to see a cyclical upturn and continuing recovery in mature economies, plus accelerated momentum in developing economies that will allow for growth in the segment.

“Our focus is around two main areas – customers and technology.

On the customer side, we want to expand our presence in certain

geographies and increase our partnerships with strategic customers. For technology, our focus will be to support and develop solutions based on digitalisation.”

Enter EcoStruxure™ Schneider’s competitive advantage is its open EcoStruxure™ architecture, underpinned by an enviable combination of people and technology, and the segment team within the organisation dedicated to partnering with strategic customers to harness its potential.

Moffitt explains how EcoStruxure™ is redefining automation and power connectivity, and adds an unprecedented layer of software applications and services to help companies improve shareholder value by increasing productivity, reducing costs and improving safety.

And by bridging IT and OT, EcoStruxure™ lets customers maximise the value of data, which translates into actionable intelligence for better business decisions.

“EcoStruxure™ is an open, interoperable, digital, and IoT-enabled

Rob Moffitt President – Mining, Minerals & Metals Segment

Rob Moffitt, who joined Schneider Electric in 2016 as President of the Global Mining, Minerals & Metals segment, has had a career spanning 32 years in the global mining industry. He started his career in deep level gold mining before working with various multi-national organisations supplying a range of innovative products, technologies, services and solutions into the industry.

Moffitt has formal qualifications in Metalliferous Mining and a MBA from Henley Business College in the UK. He is a Fellow at the Institute of Quarrying, Australia and was previously Chairman of the Institute of Quarrying South Africa, and has served on the boards of several companies.

SCHNEIDER ELECTRIC

Schneider Electric Global Family Leave

“We see enormous potential in terms of plans for the year ahead and growth” –Rob Moffitt, President – Mining, Minerals & Metals Segment system architecture that combines our broad range of solutions across connected products and edge control, and leverages them through our industry leading suite of industrial software, apps and analytics,” Moffitt says.

“Few other companies in the world have such a complete portfolio of integrated products, and our main differentiation is to bring an open

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and integrated architecture from sensors to business applications that addresses the multitude of challenges our customers face each day. We go beyond applications focused solely on just process or asset performance.”

Master of mining Another competitive advantage is Schneider’s dedicated segment approach, having built an entire

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organisation dedicated to mining, and investing significantly over the years to increase its competence in the industry from an application standpoint, helping it to solve its customers’ challenges. In fact, to that end it has developed specific expertise around process control, mineral processing, energy optimisation, and supply chain efficiency.

Mining is facing significant challenges but the fundamentals are sound, and Moffitt says Schneider expects increased demand for mined raw materials will be driven by population growth as well as rapid and increasing urbanisation.

“The resources industry is constantly challenged by market volatility, grade decline, regulations,

social license, skills gaps and workforce demographics,” he says. “This puts a premium on operational and business efficiency – something we’re well-positioned to help our customers with.

“Of all the trends impacting the industry, none will be as critical as digitalisation. It will impact every aspect of the industry operation and provide the greatest potential for improving business and operational efficiency.”

He points out one of the main challenges has always been to make real-time decisions based on information that is spread across various databases and applications.

With that in mind, the company, which devotes 5% of sales to

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research and development, believes the technology that has provided the most value to its customers has been around the integration of mining operations from ‘resource to market’ or as it is sometimes expressed, from ‘pit to port’.

“It’s one of the industry’s most challenging problems,” explains Moffitt, “and AMPLA, our integrated mining operations software, has become somewhat of the de facto standard for this type of integrated solution.

“It’s a modular software suite with specific mining functionality that supports mine operations from extraction and processing, to blending and storage, all the way through to shipping logistics.”

The software enables value chain visibility and optimisation by collecting data automatically from multiple plant and business systems or through manual data entry, and establishing a single trusted source of information which can be collaboratively used to drive efficiency, reduce cost and make better business decisions.

“A case in point would be a recent

Jean-Pascal Tricoire CEO of Schneider Electric

implementation of Ampla across five mine sites at a major metal mining company. The system was used to monitor and capture real-time asset performance and condition data and to provide root-cause analysis when assets were being underutilised.

Globally across all five mines they improved capacity by over 10%.”

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“We go beyond applications focused solely on just process or asset performance” –Rob Moffitt, President – Mining, Minerals & Metals Segment “Our resource to market integrated solution consolidates and manages data from multiple mine, plant and business systems,” he adds. “This enables customers to identify production issues, manage inventory and quality, track and management production and asset performance, understand costs, and analyse business KPIs. “As another example, one of the biggest iron ore miners in

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Australia uses it to optimise their port logistics by predicting how each entity in the supply chain will operate – from mine to plant to rail and port – and has improved supply chain efficiency by 20%.”

Futureproof Remaining ahead of the curve is tough when it comes to market changes and advances in technology, especially in mining where change is constant, but

ENERGY

Access to Energy: Our Ambition for Tomorrow

Moffitt cites open platforms, the IoT and digitalisation as good examples.

“We also see significant turnover at the engineering and technical levels in the industry,” he explains, “meaning we sometimes need to fill that void with our own project engineering or remote asset monitoring services, for example. It also means we need to partner with our customers over the medium to long term and not simply just sell them things.

“Now that the outlook has improved and mining operations are starting to make CAPEX investments again, they also need a workforce that can ramp up and become productive quickly, and much of our software and workforce enablement

solutions help them do that.”

Training solutions made possible by virtual reality or maintenance troubleshooting tools that utilise augmented reality are examples of the industry looking for new technologies to transform the way it operates in the future.

“To give another example, one of our customers in Canada has deployed our training and simulation solution at a groundwater treatment plant that had to meet critical environmental requirements, and was used to train new operators on how to prevent above-limit groundwater from being dumped into their outflow.”

Moffitt says the only way to achieve this ‘future state’ is to develop them

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jointly with Schneider’s strategic customers and partners and work closely to understand their challenges and find new ways to solve them.

There are going to be 50bn connected devices in 2020, and Schneider wants to help its customers succeed in their digital transformation and reap the rewards it can deliver in terms of energy, process, and business efficiency.

“The rewards are significant for those willing to try,” he adds. “It’s been estimated that in the next five years, mining industry leaders will achieve their most significant improvements by embracing digital technologies like the IoT and advanced analytics that

can harness the power of big data.”

Some reports indicate that digitisation could bring more than AU$470bn by 2025 in additional value to the mining, minerals and metals industries by means of productivity gains, cost reductions, and fuel and energy savings – but only if they are able to overcome some of the challenges.

“One of the challenges is in making technologies available in ways that are easy to implement and leverage,” Moffitt adds, “and that brings us back to EcoStruxure™ once again, because it provides that common open architecture on which everything can be connected.

THE ROAD TO DIGITAL BANKING Heritage Bank is Australia’s largest mutual bank. Wedded to ethical practices often thought of as highly traditional, it is looking to maintain its values as it embraces the newest technologies

Written by John O’Hanlon Produced by Glen White

H E R I TA G E B A N K LT D

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anking has not had a good press since the global financial crisis kicked in around 2008.

Australia may have weathered the storm better than Europe and the USA, but it has faced similar issues. In some ways this has been of advantage to the largest customer-owned bank and one of the longest-running financial institutions in the country. Founded in 1874 as the Toowoomba Permanent Building Society, the organisation has evolved through Heritage Building Society (1981) until it became Heritage Bank in 2011. At every step it retained its customer-owned structure.

Today it has assets in excess of $8bn, and remains headquartered at Toowoomba, Queensland.

The evolution described above was predominantly structural. Technology, even in the last decade, took a back seat to tradition. However, in 2016 the bank developed a strategic plan to transform the organisation, making it more member centric and providing a solid growth path forward.

A key requirement to improving member services was a material improvement in the ICT function, and

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agreement to a technology roadmap.

It engaged Queensland-based partner 451 Consulting to undertake an ICT review and to develop a roadmap for the IT department going forward. At the same time, it gained the services of a key member

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WAYNE MARCHANT

CIO, Heritage Bank

Wayne Marchant was appointed Chief Information Officer of Heritage Bank in December 2016 after initially joining the Bank as Interim CIO, consulting to Heritage through 451 Consulting.

Marchant has more than 26 years in IT management across large and medium businesses in a diverse range of industry sectors. Before joining Heritage, Marchant was responsible for leading significant transformational change as the Regional CIO for Billabong and at Department of Main Roads through 451 Consulting.

He has also held Senior IT roles at Flight Centre and Woolworths

of the 451 team, Wayne Marchant, who moved to Heritage as CIO. Marchant, though no banker, has vast experience in retail. Bringing him in to transform Heritage from a physical bank with a digital presence to a digital bank with

a physical presence made a lot of sense. “Banking today has everything to do with retail,” he says.

“It is all about customer service – I believe I am able to be more radical than someone from the banking industry would have been.”

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The organisation he found in 2016 was inward looking and innovationaverse following a decade of head-in-the-sand stagnation. The IT team that he had to shape to deliver a transformation was operating in a bubble, not bringing in outside vendors, and reluctant to invest in new technology. There was actually some advantage in this, though.

In the 10 years of slow progress at Heritage, though much progress had been made in banking, many people

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invested in expensive technologies that have been superseded. He’s glad, in a way, that Heritage didn’t do that because it leaves the way clear for him to turn the bank on its head in such a manner that would never have happened under the old order.

The direction Marchant has chosen is not to splash out on big box systems that would lock the bank in for decades. He wants to be able to embrace future innovations rapidly, so has chosen to base his IT on

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“BANKING TODAY HAS EVERYTHING TO DO WITH RETAIL: IT IS ALL ABOUT CUSTOMER SERVICE” –Wayne Marchant, CIO, Heritage Bank

microservices stored in containers and linked by open banking APIs (application programming interfaces).

“I am setting the bank up to be flexible and agile, and if something new comes along we can change direction in any part of our architecture very quickly.”

For the time being the core banking system, which manages all customer and inter-bank transactions, will be stripped down, removing functions that have accrued to it over the 32 years it has been operating. “It

was utilised for every purpose right down to the car booking system for our pool cars,” Marchant explains.

“It does not make sense to use the core banking system for that so we are slowly getting it back to its core purpose of running the branch network and customer transactions.

The old system works well enough for now, he adds, but it is difficult to integrate with new software and hardware upgrades. It will have to be replaced once it has been

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“WE ARE ABOUT TO COMPLETE THE CHANGE TO NPP, WHICH WE ARE PROGRAMMING WITH OPEN BANKING APIS” –Wayne Marchant, CIO, Heritage Bank

trimmed back to its core purpose.

“We think that will happen in five years’ time and it will be the last thing we do,” Marchant adds. “Creating open banking APIs to replace a cumbersome core banking system will not be easy, but the members should be unaware of anything other than the improvements they will start to see in their interactions with the bank.

The last year has been taken up with preparing the foundations for a digital transformation. 2018 will see the development of core applications, customer applications and loan origination applications, which account for 80% of the bank’s activities. “It’s tricky, because when it comes to putting development into containers and using a microservices

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architecture, there aren’t really any core banking vendors developing in this way yet,” Marchant says. “Our preference would be to have a new, digitally designed core banking system. The way we develop these days is in small packages. For a specific task I might get the team to develop three different pieces of code, or microservices, which are stored in containers and very easy to access.

The code is reusable: the smaller the chunks of code the more times you can reuse it in other applications.

This approach makes our lives easier because it is easier to update – and it improves the speed with which we can deliver services to the members.”

This flexible approach will simplify one of the bank’s main goals for

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2018 – the development of a new integrated banking system to replace the separate mobile and internet systems currently used. A vendor will be selected in the coming months to deliver this change together with branch systems, integrated with the core system using APIs. Heritage Bank does not try to outstrip the big four incumbent banks

in Australia, but it does aim to be a ‘fast follower’. To do that effectively it needs to be able to adapt quickly.

For example, Australian financial institutions are in the throes of changing over to the New Payments Platform (NPP), which allows money transfers to be made instantly rather than delayed or batched payments as previously. “We are about to complete

700

Number of Employees at Heritage Bank Ltd

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H E R I TA G E B A N K LT D

“IT IS OUR CUSTOMERS’ MONEY: I HAVE TO JUSTIFY TO THEM WHY I SPEND EVERY DOLLAR” –Wayne Marchant, CIO, Heritage Bank

the change to NPP, which we are programming with open banking APIs that we would attach to our new mobile and internet banking system when it goes live later this year,” says Marchant. “At present if someone

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makes a transfer on Saturday it doesn’t go through till Monday. With the new system the recipient account will be credited within 15 seconds.”

Part of Marchant’s strategy has been to retrain sections of his team

TECHNOLOGY

in ‘devops’, an amalgam of software development and operations, and move them out into the different business units within the bank.

To facilitate training he formed a partnership with the American open-source software company Red Hat. “I am looking at the IT operating model and adjusting it to a bimodal model where the support teams are operating one way and everyone else will be devops. We are currently re-engineering IT to work in a very different way. It is as much about the productivity of the IT department as about working with vendors. We have rolled out Cobit 5 processes to make sure that the right IT governance and IT assurance processes are being applied.”

It’s becoming axiomatic that no business can realise its full potential until it has taken a grasp on the data it holds. Heritage now has a business information (BI) system managed by the analytics company SAS, enhanced by software from the customer experience management specialist Sitecore. Because of the under-resourced and highly

1874

Year founded

manual systems the bank had for communicating with its members, it was losing many opportunities to keep in touch. The bank can now run a large number of highly targeted customer campaigns a week, rather than just several mass mailouts a year says Wayne Marchant: it’s a really good system. We need to do more with the analytics data that we have so we are enhancing our reporting this year through changing the BI team and adding more resources.”

Marchant is always on the lookout for technology solutions that enhance customers’ financial wellbeing, the underlying principle at Heritage. Not many banks would even consider closing down a customer’s loan even in the event of hardship through force majeure, but

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People. Projects. Technology.

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if their financial wellbeing is at stake Heritage would even do that. “For us, being customer owned is not about sales but about delivering the best possible result for the customer,” says Marchant. “We are always looking into ways to improve their experience.” He has a keen interest in innovative technology being developed by ‘fintechs’, innovative startups in the sector among whom he likes to network at conferences and the meetups organised by the incubator hub Stone & Chalk.

Heritage is in a good position to leverage its customer-owned status.

Public disquiet over large salaries and bonuses at the large banks could

move customers in the direction of the mutuals. “It is our customers’ money. I have to justify to them why I spend every dollar,” says Marchant, or as CEO Peter Lock puts it: “We recognise that not everything has to be digital and we have many customers who choose us because of our more traditional approach … we’re not a Bank that’s fascinated by shiny new things at the expense of our existing clients.” That said, they both agree that without its digital transformation the bank will not reach its ‘Destination Best Bank’.

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