Mitsui Coal Holdings
Established in 1982, Mitsui Coal Holdings is a holding company for Mitsui & Co.’s investments in Australia’s coal fields. It invests in joint-venture coal mining projects and has financial stakes in 14 coal mines across Queensland and New South Wales. The company employs 21 people and has investments worth more than AU$2 billion (US$1.5 billion) in coal extraction.
Mitsui Coal Holdings (MCH) wanted to replace the financial reporting system it had in place because the solution no longer met its needs. “Reliability was a problem,” says Craig Howard, general manager of finance for MCH. “System updates often caused source code issues that required hot fixes, and we could lose access to services for a few days.” Besides the downtime, the system lacked functionality and a modern user experience. Finance users, for example, were unable to run automated monthly reports highlighting key performance indicators (KPIs). These reports had to be prepared manually and as such were labor intensive and prone to errors. It also took days to collate performance data reports from the teams managing the coal mines. “The other issue was that we couldn’t do any real analysis of the data,” says Howard. “We just spent hours checking for errors.”
MCH looked for an alternative solution after a 2016 flood affected the company’s data center in Newcastle and took the financial reporting system—which was hosted by the system provider—offline for several working days. The company looked at leading enterprise resource planning (ERP) solutions on the market, and spent many months evaluating the top software vendors—before choosing SAP S/4HANA. The next step was to decide whether to deploy SAP on premises or on the cloud. “When we looked at an on-premises solution, we saw the platform would need costly upgrades on a regular basis. The cloud economics was a lot more feasible,” says Howard. “When we mentioned a cloud-hosted SAP S/4HANA solution, it got the backing of the IT team in Singapore, which is responsible for Mitsui & Co. subsidiaries across Asia Pacific, and of our parent company in Japan, which is currently migrating its IT to the cloud.”
Why Amazon Web Services?
MCH assessed multiple cloud-service providers other than Amazon Web Services (AWS) to run its SAP S/4HANA installation. “Ultimately, AWS was more cost-competitive than the other cloud-service providers we evaluated,” says Howard. “Plus, with AWS Availability Zones present in the Asia Pacific (Sydney) Region, we could keep our data securely stored and backed up in Australia.”
At the same time, MCH also evaluated transformation partners to work on its finance transformation and SAP deployment. Again, the company looked at multiple providers before selecting AWS Partner Network (APN) Advanced Consulting Partner PricewaterhouseCoopers (PwC). MCH’s confidence in PwC’s understanding of its challenges and opportunities, their ability to use technology to enable business change, and the security of their ongoing fully managed SAP S/4 HANA service was instrumental in MCH’s selection
Once work started, the AWS-based SAP S/4HANA environment was running within a couple of working days. Uploading the files from the old financial system to the SAP environment was “seamless,” according to Howard. The majority of MCH’s time was spent creating formats for the accounting reports that would come out of the SAP solution. “The overall project was handled well by all parties and completed without any problems,” says Howard. PwC’s business-led, technology-enabled, and rapid deployment approach saw the implementation delivered in four months.
The SAP S/4HANA infrastructure runs on large Amazon Elastic Compute Cloud (Amazon EC2) instances and the company uses Amazon Simple Storage Service (Amazon S3) to store files and backups. Data resides in an AWS Availability Zone (AZ) in the Asia Pacific (Sydney) Region, within a highly secure virtual network in an Amazon Virtual Private Cloud (Amazon VPC) environment.
MCH is no longer at risk of suffering downtime with such a business-critical reporting system since deploying SAP S/4HANA on AWS in May 2017. “With our old on-premises financial reporting system, uptimes were about 85 percent. Using AWS, we get uptimes of 99.99 percent for SAP S/4HANA,” says Howard. “We come into work each day and the SAP environment is up and running. We don’t face the disruption we once did.”
In addition to stability, the performance of the SAP system on AWS has improved significantly over its previous one. “Our monthly reports, complete with KPIs, are ready in seconds with our SAP S/4HANA environment on AWS. It no longer takes us days of manual work. We work a lot more efficiently, and because the reports are generated automatically in SAP, we avoid errors.” In addition, the MCH finance team has improved its quarterly reporting for parent company Mitsui & Co. in Japan. Before, the MCH finance team used to send only the data to Mitsui & Co., and the quarterly reports would be finalized in Japan. Now, all the work is done by the MCH finance team in Australia—and Mitsui & Co. in Japan receives the completed quarterly reports. “It saves our colleagues in Japan days of work and gives them a highly accurate picture of our operations,” says Howard.
The capability, user experience, and real-time analytics of SAP compared with the previous financial system ensures that MCH gains more accurate and timely insight across its operations. Because MCH can now produce reports that compare the performance of its different mines, it can now encourage all mine operators to adopt the same best practices. “We can, for example, recommend sourcing materials from suppliers that are providing the best deals to our mines,” says Howard.
“The scalability of the SAP S/4HANA platform on AWS enables us to bring the benefits of SAP to other business units without the cost of implementing a new system,” says Howard. He also believes the business insight gained from taking advantage of the SAP environment will be valuable to the business over the coming years.