A BT HP Alliance case studyAnglo American

Mining giant transforms its global infrastructure

ClientAnglo American is one of the world’s largest mining companies. With 105,000 direct employees in around 30 countries it is a giant in every sense of the term. Like all multinationals, its size should be a foundation for growth, not a brake on agility.

Announcing a 2009 operating profit of $5 billion on revenues approaching $25 billion, Cynthia Carroll, Chief Executive, said: “Anglo American is now a more focused and performance‑oriented international mining company. We have a clear strategy in place and are driving harder than ever in pursuit of being the investment, partner and employer of choice in the mining industry.”

ChallengeAnglo American has seven core managed business units: Platinum, Copper, Nickel, Kumba Iron Ore, Iron Ore Brazil, Metallurgical Coal, and Thermal Coal. There are 168 sites across every continent.

Craig Charlton, Group Head of IM Strategy and Assurance at Anglo American, says: “Historically, our business units around the world had total autonomy over IT strategy. While it meant fast local decisions, it made it very difficult to communicate across the company and there was some opportunity to reduce costs.”

In fact, Anglo American enjoyed 358 different external ICT suppliers, 74 various data centres and computer rooms, 18 mismatched desktop images, multiple separate service desks – and nothing in the way of a global wide area network.

A more joined up approach to communications would enable Anglo American to more easily share best practice worldwide.

Craig Charlton continues: “The primary drivers were transformation and value creation. We wanted to make the company more connected, to provide a platform for standard business applications and shared services on a global basis.”

In advancing towards those aims, Anglo American chose to outsource its ICT infrastructure to the BT HP Alliance under a seven‑year contract.

“We needed to simplify the systems environment, because an accessible and standardised IT platform is essential to enabling Anglo American to leverage its scale. We decided that this could be more cost effectively achieved through partnership, rather than attempting to do it all ourselves.”Mike BowdenGroup Chief Information OfficerAnglo American

Outsourcing to the BT HP Alliance gives Anglo American a worldwide platform for collaborative working and shared services

Underground operations at Anglo Platinum’s Waterval mine in South Africa

The BT HP Alliance solutionThe overall agreement with Anglo American covers four service towers: user computing, data centres, service desks, and the voice and data network (VDN). In preparation for the transformational phase, Anglo American brought together its worldwide IT teams into a single vertical reporting structure consisting of some 125 employees. Of those people, 10 transitioned to BT while 90 transitioned to HP.

Fernando Echeverria, now BT Business Manager in South America, was one of them. He says: “The move was seamless and impressive. I left my desk in Chile one working day as an Anglo American employee and turned up the next as a BT employee. I was made to feel very welcome and all the tools I needed – including a fully configured HP laptop and a mobile phone – were waiting for me. Even better I still have great career opportunities, matching my skills, in a global ICT organisation.”

With the transformation phase nearing completion, some 26,000 Anglo American IT users are now globally interconnected over the BT MPLS VDN, using a single common addressing scheme. They also have BT‑provided internet access protected by managed firewalls. Meanwhile, 4,000 flexible

workers enjoy BT‑managed secure remote access services virtually anywhere in the world.

Mining is not an activity that’s normally conducted in hospitable places, so the Anglo American network has to reach high and wide. In Chile, the company’s copper mine at Los Bronces is nearly 11,500 feet above sea level. In Africa and Australia, its extraction sites can be hundreds of miles from the nearest town. Joanne Shields, BT Africa Business Manager, says: “Damage to physical network links is very common. To achieve resilience in such conditions, BT brings technologies such as microwave and even satellite into play.”

The infrastructure is treated as three zones. Countries and regions such as the UK, North America, Canada, Australia, and most of Western Europe fall into Zone 1 – while Zone 2 and Zone 3 are areas with progressively less mature infrastructures. Each zone has four network segments – CN1, CN2, CN3, and DC – with CN1 being the least critical and DC being the most critical. The CN3 and DC segments are invariably dual‑served and diversely routed whereas other segments will, for example, have ADSL backup circuits. Network availability SLAs vary from 97 per cent to 99.99 per cent.

Mike Bowden, Group Chief Information Officer and Head of Shared Services at Anglo American, explains: “We needed to simplify the systems environment, because an accessible and standardised IT platform is essential to enabling Anglo American to leverage its scale. We decided that this could be more cost effectively achieved through partnership, rather than attempting to do it all ourselves.”

With transformation in mind, Anglo American considered over twenty prospective suppliers, which were whittled down to a short list of two before the final choice of the BT HP Alliance was made. Craig Charlton recalls: “Only a few of the original list of 21 could cover key global markets. In the final analysis we chose the BT HP Alliance because it proposed the most complete solution. It also put forward the strongest financial case for taking costs out of our ICT environment.”

The BT HP Alliance is a blend of complementary skills and resources. Inter‑company customer service systems and processes are electronically integrated, which means the partners can be totally flexible.

A BT HP Alliance case studyAnglo American

“Only a few of the original list of 21 could cover key global markets. In the final analysis we chose the BT HP Alliance because it proposed the most complete solution. It also put forward the strongest financial case for taking costs out of our ICT environment.” Craig CharltonGroup Head of IM Strategy and AssuranceAnglo American

Winter at Anglo American’s Los Bronces operation in Chile, which currently produces more than 235,000 tonnes of copper each year

An HP‑managed multi‑lingual service desk provides single point of contact support for the Anglo American ICT infrastructure. This facility offers a seamless 24*7 interface from locations in South Africa, Costa Rica, and São Paulo. First line response is offered for all services, while the Alliance’s integrated services architecture (ISA) aligns and interconnects HP and BT customer service systems.

Gerald Turley explains: “ISA is designed to lower resource utilisation by automating service management and delivery, based on ITIL1 recommended processes.” This means that, for example, a network fault ticketed on the HP service desk in, say, South Africa is electronically posted to the BT global network management centre in São Paulo. Likewise, corrective action entered into the BT network management system is electronically transferred back to the service desk. Reporting and escalation processes are ISA‑powered too.

Change management is enabled by a project and portfolio management (PPM) system. This hosted web‑based application was custom developed by HP for Anglo American. It allows service requests to be raised by Anglo American people from anywhere around the world. Designed to manage changes to existing services, and requests for new services, it automates the authorisation process.

ValueThe BT HP Alliance outsourced ICT platform has enabled Anglo American to implement its shared services strategy. Accounting and financial functions such as invoice processing, accounts payable, and payroll services have been centralised, with resulting economies of scale. At the same time the company has been able to implement a global SAP‑based HR system, along with a cloud‑based Emptoris application for procurement. The latter delivers the functionality needed to successfully manage expenditure right across Anglo American.

HP and Anglo American agreed a single image for PCs and laptops and this has been rolled out across the world to provide the 26,000 users with identical services on their standard HP desktops.

Gerald Turley, Head of HP Outsourcing Services Delivery in EMEA, says: “Achieving that coverage across five continents has not been without its challenges but is testimony to the global resources that we have at our command.”

Data centre services have been rationalised to four HP‑hosted facilities in Australia, Chile, South Africa, and the UK – all globally interconnected by the BT MPLS backbone. HP conducted that data centre programme in two phases. First the infrastructure was built – including Microsoft Exchange email, Active Directory, SQL database clusters, and a Citrix platform. With those applications satisfactorily delivering service to the business units, the second phase was a server consolidation programme.

Craig Charlton says: “From an original total population of 1,600 servers, we aimed for a 40 per cent reduction and we’re certain we’re going to beat that.”

“The new infrastructure is helping the company to act as a single unit. In particular, the standardised email platform has broken down communication barriers; while our newly-connected global network enables shared applications to be delivered to all corners of the Anglo American world.”

Craig CharltonGroup Head of IM Strategy and AssuranceAnglo American

A BT HP Alliance case studyAnglo American

Has it all been plain sailing?The transformation was supposed to be completed in two years. While some areas, such as the network and data centres, took just 18 months, the process for others ran to three years. “The Alliance has shown great flexibility and willingness to share the risks,” says Craig Charlton. “In fact, the new pricing regime kicked in after 18 months, so that worked out pretty well for us.” The main reason for any overruns was underestimation of the complexity and diversity of the Anglo American environment. That would have been helped by more thorough pre‑contract due diligence, although Craig Charlton notes: “The acquisition of EDS brought new management skills to the Alliance, which quickly fed through into our project. I have no doubt that transformation projects for other customers will benefit from that too.”

1. Information Technology Infrastructure Library

At Anglo American’s Chagres copper smelter in Chile, the smelting process employs a low‑emission‑producing furnace

Now that the project is moving from transformation to the operational phase, ICT‑enabled innovation is high on the agenda. Examples of work in progress include:

• BTisstartingtoimplementIPTelephony in a site‑by‑site initiative across the global MPLS infrastructure, which is likely to show savings for Anglo American

• HPisvirtualisingservers,tomakeremote locations more cost effective and easy to manage

• BTisupgradingtheAngloAmericanglobal video conferencing platform to become a managed service, connecting 120 virtual meeting suites and using MPLS to improve quality and connectivity

• HPisleveragingInformationLifecycleManagement (ILM) techniques to optimise storage resources and reduce network demands

• BTispilotingWideAreaApplicationServices (WAAS), to conserve bandwidth for high‑priority data such as video conferencing and virtualised environments

Under the outsourcing contract, the BT HP Alliance committed to a first‑year one‑off saving, followed by year‑on‑year benchmarked price reductions. Anglo American regards the exact details of those economies as commercially confidential, but Mike Bowden concludes: “We continue to meet the commercial and organisational targets that we set in the original internal business case.”

Craig Charlton says: “Beyond such physical evidence, the new infrastructure is helping the company to act as a single unit. In particular, the standardised email platform has broken down communication barriers; while our newly‑connected global network enables shared applications to be delivered to all corners of the Anglo American world.”

Looking at network performance over a six‑month period across all network segments, four out of five achieved 100 per cent uptime, while the majority of the rest achieved 99.99 per cent, comfortably within SLAs.

Incidents are categorised by their business criticality, with P1 being the most severe and P4 being the least so.

In January 2010, there were 88 network incidents across the globe, nearly 80 per cent down on the levels of six months previously. Furthermore, only six of those 88 were categorised as SLA‑affecting P1 incidents, all of which met the four‑hour time‑to‑repair target.

“We continue to meet the commercial and organisational targets that we set in the original internal business case.”

Mike BowdenGroup Chief Information OfficerAnglo American

Key BT HP Alliance Services•OutsourcedMPLSWANcovering30countriesacrossallcontinents,togetherwith

secure remote access, internet access, and managed firewall services

•Managedglobalvideoconferencingplatformwithover120virtualmeetingsuites,using MPLS to improve quality and connectivity

• IPTelephonyacrosstheglobewithWideAreaApplicationServices(WAAS)toconserve bandwidth for high‑priority data

•Singledesktopandlaptopimagefor26,000users,withvirtualisationusedtomakeremote locations more cost effective and easy to manage

•FourhosteddatacentresinAustralia,Chile,SouthAfrica,andtheUK–providingplatforms for Microsoft Exchange, Active Directory, SQL databases, and Citrix

•Serverconsolidationprogrammereducingtheoriginalestateof1,600serversbyover40 per cent

• InformationLifecycleManagement(ILM)tooptimisestorageresources,withEmailIntelligence to improve messaging analysis and archiving

•Multi-lingualvirtualservicedeskprovidingsinglepointofcontactsupport24*7fromlocations in South Africa, Costa Rica, and São Paulo

• ITIL-basedIntegratedServicesArchitecture(ISA)aligningandinterconnectingHPand BT customer service systems

•ProjectandPortfolioManagement(PPM)systemmanagingchangestoexistingservices and requests for new services, including authorisation processes

A BT HP Alliance case studyAnglo American

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