SAP joins bidding war in mining sector boom

Von Sandra Rossi

SAP has joined the long list of IT vendors targeting Australia"s mining industry which has undergone a mini-boom in the past year with pre-tax profits in the sector jumping A$5.1 billion (US$4 billion) to A$17.5 billion.

The vendor has announced a new services alliance with the Australian-based mining consultancy Cosol to deliver integrated supply chain management solutions to the region"s mining sector.

While SAP already has blue chip clients in this sector including Rio Tinto and BHP Billiton, Cosol CEO Ron Fredericksen describes the partnership as a global opportunity.

"The mining industry in Australia is well positioned to capitalize on this opportunity due to its geographical proximity to expanding economies in Asia, specifically China, and emerging India," he said.

"Mergers and acquisitions, pressure on logistical and transportation costs and the need to streamline enterprise-wide processes represent just some of the key drivers for capital investment in IT."

But SAP isn"t alone. Recently CSC managing director Mike Shove identified the mining sector as a vertical ripe for opportunity while Sun Microsystems restructured its operations earlier this month to expand its presence in the oil and gas industries.

SAP A/NZ CEO Geraldine McBride said the mining sector is moving away from a traditional organizational structure, which relies on siloed operational units, such as maintenance, materials management and finance.

"The future direction for the mining sector is to establish enterprise-wide processes that integrate various business functions, providing insight into real-time performance and enabling process and efficiency improvements," she said.

The new offering, SAP for Mining, which is based on the NetWeaver platform, includes consultancy, project design, support services and training.