Insights

With the reduction of commodity prices within the iron ore mining industry globally, Kumba Iron Ore was under significant pressure to reduce costs in order to remain sustainable. Various strategic projects were initiated to chieve a more favourable cost baseline across a number of our suppliers.

The services of Dante Deo was enlisted in June 2016 to drive one of our strategic cost reduction projects relating to the supply of software, hardware and support services in the Time and Attendance (T&A) application space. Of critical importance in the project was the overarching requirement to avoid any impact on the health and safety standards as well as any impact on security. This implied that Kumba Iron Ore could not accept any reduction in the service levels, lead times for replacement products and stability of the overall system.

Dante Deo’s expert knowledge of the Technology supply base, the interoperability of technologies in the digital environment and its ability to align technical specifications with the commercial requirements allowed Kumba Iron Ore to reduce costs with approximately 40%.

The professionalism, its understating of the Information Technology category, the ability to negotiate and manage stakeholders and deliver value makes Dante Deo a world class partner that we can recommend

Early in 2016 the Cabinet instructed the National Treasury to revise the current budget and take measures to reduce expenditure. Baseline budgets of National and Provincial departments were reduced by R10 billion and cost containment instructions were issued to all Government Departments.

Working with the Office of the Chief Procurement Officer (OCPO) at National Treasury and the State Information Technology Agency (SITA), Dante Deo took the lead in achieving cost containment measures in the ICT category.

Dante Deo’s review, analysis an marker research of various contracts and commercial arrangements between software providers and the State highlighted that significant inconsistencies exist in the conditions, charges, billing practices and provision of different service options resulting in the South African Government Departments and Institutions paying significantly more for software licenses than the private sector.

Given this, Dante Deo together with SITA identified the top 11 software suppliers and initiated the engagement and subsequent renegotiation of the commercial position with those 11 suppliers. The purpose being:

• Optimize the value of the current and future software supplier offerings to the Government
• To enable cost savings (direct and indirect)
• Optimizing the return on investment for Government’s Software Technology
• Improvement of OEM consulting services to Government

Dante Deo’s experience within the ICT sector, both locally and internationally proved to be a key differentiator in enabling a significant average saving of 21,8% across the 11 suppliers. Its understanding of the market, the technology in question and software licensing regimes meant that many stakeholders in various Government Departments and State Institutions utilized Dante Deo to provide guidance and advice. Dante Deo was also able to meet the ambitious project timelines.

With its dedication, professionalism, expert knowledge and desire to make a difference, Dante Deo can be recommended as a truly value adding partner.

In January 2016, Dante Deo was contracted for a 6 month period to review the “Information Technology”- and “Tires and Conveyers” category portfolios as part of the AfriSam 2020 strategic cost reduction project. The scope of the engagement included the following aspects:

• Perform a detailed analysis of the current spend across each category portfolio
• Analyse the supplier base with a view to consolidate supply and achieve greater economies of scale
• Establish consistent pricing models across the various commodities
• Determine the level of implementation and deployment of software assets
• Eliminate duplication of technologies where possible
• Evaluate alternative support and maintenance models to avoid costs
• Renegotiate supply agreements to reduce costs across the AfriSam Group

During this engagement Dante Deo demonstrated its in-depth knowledge of the Information Technology industry, the technology supply models and cost levers by realising a reduction of approximately 20% across the hardware, software, services and telecommunication commodities.

Dante Deo successfully completed the “Request for Proposal” (RFP’s) for the Tires and Conveyers category. The outcome of these tenders enabled the consolidation of supply and the deduction of costs into a more favourable commercial arrangements for the AfriSam Group, but due to limitation f time, Dante Deo were not part of the final implementation of the Tires and Conveyers Initiation. The rollout was however completed internally and the expected saving as per the handover was achieved.

Dante Deo successfully engaged at various levels of the organisation to obtain buy-in. Especially within the complexity of the Information Technology category, Dante Deo was able to engage effectively with technical-, operational-, management- and executive level stakeholders on both the commercial and technical aspects of the category. Dante Deo successfully adapted to the organisational challenges to deliver value to the AfriSam Group. Its professionalism, dedication and integrity makes them a good partner within the supply chain and procurement field and can be recommended as a value adding partner.