Lonmin implements GRC solutions from SAP

JohannesburgLonmin Plc is the world’s third largest producer of primary platinum, with over 25 300 employees. Its business is focused on mining operations in South Africa and the company discovers, acquires, develops and markets minerals and metals worldwide.

Lonmin Plc recently implemented SAP solutions for governance, risk and compliance (GRC), and has since reduced its violations count to zero, while streamlining its operations in terms of authorisation processes, saving money, time and bolstering reporting processes.

Says Anse Peckham, Senior Manager: Business Applications for Lonmin Plc: “Our implementation of an SAP ERP solution began in 2005 and one of the key reasons for switching to SAP was that it would allow for the incorporation of GRC modules in the future that would enable the company to comply with good corporate governance.

“Full compliance was not a prerequisite at the time and is not yet an imperative, but there are major business advantages in adhering to the basic principles as set out with good corporate governance, for example continuous monitoring of Segregation of Duties (SODs), eg when authorisations are created or allocated to users, and as an international company it is important that Lonmin Plc meets with expectations in terms of compliance,” she adds.

In order to drive compliance, Lonmin Plc would require an effective tool for tracking and eliminating violations and enforcing guidelines.

“Initially Lonmin focused on calibrating compliance to get a perspective of what needed to be done, but later moved to an implementation of the entire SAP GRC Risk Management suite,” explains Peckham.

“The calibration process revealed 900 000 (SOD) violations that needed to be corrected from an SAP point of view,” she says. “And there was also a need to reduce the time taken for authorisation calls which, before implementing SAP, were taking between three and four months to process. The company received over 500 calls for consultants on a daily basis and was dealing with a backlog in dealing with these too. SAP would be used to streamline these processes with automation where possible.”

With the implementation of SAP GRC solutions, Lonmin soon turned the situation around.

“It took about a year to reduce our violations from 900 000 to zero,” states Peckham. “But as of February 2008, Lonmin Plc is fully compliant.” Manna Walkerley who was the SAP team lead for this implementation, commented that in November 2008, 473 calls were logged and on average closed in 1.60 days. GRC has very good report functionality for SLA purposes, which calls are auto provisioning and calls that move violations. “Do not also underestimate the involvement of the users during a typical implementation,” says Walkerley.

“As for authorisation calls taking months to process – that has been reduced to a maximum of two days now,” she adds.

She says that full automation has made this possible and that the only time authorisation takes longer than two days to process is where mitigation control or feedback is required. In such cases, a maximum of five days is spent on authorisation.

“The automation also makes authorisation easier to track and report on,” says Peckham. “Users can easily check the status of their calls, whereas before they would log a call and have no idea as to what was happening with it.”

Going forward, Lonmin Plc has a policy of working with SAP solutions.

“If something needs to be done, our first question is ‘how can we do this with SAP’ and as we now start to move towards addressing environmental health and safety compliance, SAP solutions will again be used,” affirms Peckham.

“Using SAP has reduced costs, time and manpower required for processing authorisations and managing compliance,” she continues. “These are really magic tools and whereas we had up to six consultants on site to work on authorisation before automating with SAP, we now have only one. Not only is this a huge cost saving, but our satisfaction rating from our users is far higher.

“The next step will be to train our auditors, both internally and externally, to use the power of SAP’s reporting tools in the company’s annual auditing operations,” concludes Peckham.


SAP is the world’s leading provider of business software (*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 47 800 customers (excludes customers from the acquisition of Business Objects) in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol “SAP”. (For more information, visit www.sap.com.)

(*) SAP defines business software as comprising enterprise resource planning and related applications.

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