De Beers Gartner e business case study

1. CASE STUDY
July 2002
GartnerG2, a new service from Gartner, Inc., helps strategists guide and grow their businesses.
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Daniel Miklovic and
Andrew Audsley
“Using an independent, unbiased quality
assurance resource can minimize the
potential for skewed results.”
De Beers Manages a Global
E-business Plan
Issue/Solution
De Beers management needed an extensive e-business strategy
that spanned all business units, worldwide.
The necessary skills and resources were not available in-house, so
the company looked for an independent, unbiased prime contractor.
Situation
• Diamond mining and marketing giant De Beers decided three years
ago to implement a global approach to its e-business.
• De Beers’ senior executives recognized early on that a groupwide
e-business strategy was the key to success of certain initiatives.
• With outdated, fragmented IT systems, no Internet presence and no
experience fielding global programs, De Beers needed help.
Discoveries
• The planning process exposed the importance of multiple intranets
and extranets to meet the needs of diverse stakeholders.
• A business-driven program director—able to make decisions
independently of business units’ influence—was critical to success.
Recommendations
• Put in place at the beginning a clear and balanced governance
structure for employing outside specialists.
• Centralize funding and control, balanced with strong business unit
buy-in, to speed up the decision-making and implementation.
• Employ external service providers to assist in planning and monitor
them with an independent, unbiased quality assurance partner.
Dig Deeper
• Related Research from GartnerG2
• Gartner Core Research
• Outside Source
• Methodology

2. CASE STUDY
De Beers Manages a Global E-business Plan July 2002
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Situation
A diamond is forever, but business applications need to change
De Beers is the world’s largest miner and marketer of diamonds, with sales exceeding $4.5
billion in 2001. De Beers has two primary locations:
• Its mining operations and exploration business is based in Johannesburg, Republic
of South Africa.
• Its Diamond Trading Company, which is responsible for diamond sales, valuation
and marketing, is based in London.
Although part of one company, these two business units operate independently, with
separate IT departments and systems infrastructures.
Three years ago, De Beers decided to reposition itself from a passive seller of diamonds to
an active “supplier of choice,” with the parallel intent of becoming both an “employer” and
“producer” of choice. De Beers’ senior executives recognized early in the repositioning
process that a groupwide e-business strategy was essential to delivering certain key
strategic business initiatives.
The bold change in business strategy necessitated a significant investment in e-business
technology. The first step, taken in February 2000, was to develop an e-business strategy.
At the time, De Beers’ IT system was outdated and fragmented. The company had no Web
content management solution, 19 separate and independent intranets, no Internet presence
and no experience in implementing a global program of this type. The last major systems
implementation took place in the 1980s. What’s more, De Beers had neither the technical
nor the project management resources for an initiative of this nature.
• Two major challenges were faced by De Beers:
— Getting the right resources, both internally and externally. De Beers found
that people management was one of the toughest challenges.
— Getting business units to agree on a common e-business technical and
creative infrastructure. This required a strong centralized governance
structure.
Discoveries
De Beers faced complex challenges
The two facets of De Beers—diamond trading and diamond mining—greatly complicated the
e-business initiative. Mining companies historically have been late adopters of IT in general,
and e-business specifically, other than to procure indirect materials to support mining
operations. This dichotomy makes De Beers’ achievements all the more impressive.
Building teams with strong buy-in made the planning strategy successful. A neutral arbiter
also helped to defuse what could be perceived as biased results.
Multiple facets, multiple solutions
The recognition that different stakeholders needed distinct solutions was pivotal to the
planning and process. Thus, the decision to break the Web deliverables into four parts was
critical:

3. CASE STUDY
De Beers Manages a Global E-business Plan July 2002
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• Corporate Internet. The objective was to launch the corporate Internet site in line
with the release of the company’s annual results, published in February 2001—
making it imperative that the site meet strict criteria in terms of quality, technical
robustness and security.
• Group intranet. The objective here was to build one intranet infrastructure for the
entire De Beers group. This was designed to improve efficiency and effectiveness of
internal communications, while determining how intranet developments should be
structured.
• Sightholders network. This is a business-to-business extranet, connecting the
trading company to its clients and diamond brokering organizations worldwide. In
general, this network helps the trading company become as effective as possible in
fulfilling its key roles within the industry. The network aims to:
— Introduce efficiencies to an array of business processes.
— Provide personalized access to support material for marketing initiatives.
— Strengthen commercial ties between the trading company and its clients.
• Trade network. A feasibility study and business case for a business-to-business
diamond trade extranet were developed. Evaluation is now under way to use this
concept for improving the sales capability of retailers by providing marketing
collateral, training, best practices, etc., while also providing a mechanism to support
efficient distribution. Additionally, the trade network will increase the reach of the
trading company’s Diamond Promotion Service, allowing better communication with
diamond retailers.
Reliance on craftsmen
After examining the requirements to conduct a program of this scale, De Beers’
management concluded that the necessary skills and resources were not available in-house
and decided to look for a “prime contractor.” Accenture was selected after a rigorous
evaluation.
Since the whole process had board-level support, De Beers was able to put a strong
governance in place to handle the separate projects and resources under one e-business
program, the first of its kind for De Beers (see Figure 1). To assure that it was truly global,
and not owned—or perceived as being owned—by any one business unit, an independent
program director was appointed and kept separate from the main business units. The
program director previously worked directly for the chairman’s office; the program’s budget
came directly from the main executive committee. Additionally, all of the traditional change
management tools—such as workshops, issue and risk review meetings, and extensive
reliance on third-party objective advice—were leveraged to improve business unit buy-in.
The program governance structure comprised a number of different entities, which provided
an effective measure of checks and balances. Each entity included key stakeholders from
the different business units. Significantly, these stakeholders were empowered to provide a
forum for fast, effective decision-making.

4. CASE STUDY
De Beers Manages a Global E-business Plan July 2002
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Figure 1: De Beers’ e-business steering group
Source: De Beers, June 2002
From the outset, De Beers understood the importance of following best practices in the
governance of the planning process and the need to have the best people from each of the
business units participate in the projects. In each initiative, Accenture provided a project
manager to work alongside each De Beers project leader, helping to supply project
management experience and robust methodology.
Results
De Beers took a strategic approach to a much-needed global e-business investment. The
results have pleased the stakeholders, from a business, quality and budget perspective. By
continuing to apply best practices in project management and overall governance,
investments in the new infrastructure continue.
To date, each phase has been completed on time and within budget. The infrastructure is in
place and a strong working relationship has developed between De Beers and Accenture.
To put a simple quantitative measure on just a single aspect of the e-business project,
savings associated with self-service of De Beers’ documentation—now downloaded instead
of mailed—are about $250,000 annually.
• The success of the different deliverables has been documented thoroughly and the
corporate Internet site now consists of more than 800 pages, demonstrating a
continuing growth in site visitors (see Figures 2 and 3).
Corporate
Internet
Sightholders
network
Trade
network
Group
intranet
Debswana
Namdeb
Technical
management
Business unit
project leader
Business unit
project leader
Business unit
project leader
Business unit
project leader
Technical
manager
Infrastructure
Security
Programme Director
Programme Office
(Program team
member)
Legal support
Partner services
provider
Independent QA
(Program team
member)
Commercial support
Solution build
services
Accenture
Creative
services
Accenture
Other
services
Accenture
Business unit
project leader
Business unit
project leader
Applications
Project
manager
Project
manager
Project
manager
Project
manager
Project
manager
Project
manager
E-Business Steering Group
Corporate
Internet
Sightholders
network
Trade
network
Group
intranet
Debswana
Namdeb
Technical
management
Business unit
project leader
Business unit
project leader
Business unit
project leader
Business unit
project leader
Technical
manager
Infrastructure
Security
Programme Director
Programme Office
(Program team
member)
Legal support
Partner services
provider
Independent QA
(Program team
member)
Commercial support
Solution build
services
Accenture
Creative
services
Accenture
Other
services
Accenture
Business unit
project leader
Business unit
project leader
Applications
Project
manager
Project
manager
Project
manager
Project
manager
Project
manager
Project
manager
E-Business Steering Group

5. CASE STUDY
De Beers Manages a Global E-business Plan July 2002
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Figure 2: Average number of Web site visits
Source: De Beers, June 2002
Figure 3: Average time spent on the Web site
Source: De Beers, June 2002
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Web site visitors
F M A M J J A S O N D J F M A M J
2001 2002
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Web site visitors
F M A M J J A S O N D J F M A M J
2001 2002
14
12
10
8
6
4
2
0
Minutes
F M A M J J A S O N D J F M A M J
2001 2002
14
12
10
8
6
4
2
0
Minutes
F M A M J J A S O N D J F M A M J
2001 2002

6. CASE STUDY
De Beers Manages a Global E-business Plan July 2002
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Recommendations
• Put in place at the beginning a clear and balanced governance structure for
employing outside specialists. A structured approach was put in place from the
start for employing external specialist resources where De Beers resource gaps
were evident. The program director took a business-driven approach, was
independent of the different business units and was empowered to make decisions.
• Centralize funding and control, balanced with strong business unit buy-in, to
speed up the decision-making and implementation. A six-month review cycle for
continued funding ensured continued buy-in.
• Employ external service providers to assist in planning and monitor them with
an independent, unbiased quality assurance partner. External service providers
generally have a vested interest in ensuring the resulting plan favors technologies
and solutions with which the provider has experience. Using an independent,
unbiased quality assurance resource can minimize the skewing of results.

7. CASE STUDY
De Beers Manages a Global E-business Plan July 2002
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Dig Deeper
Related Research from GartnerG2
Report: Fixing the Balanced Scorecard’s Missing Link
By Michael Smith (30 November 2001)
Gartner Core Research
A Project Checklist
By Simon Mingay (17 May 2000)
Summary: IT projects are well-known for having failure rates of more than 50%. We outline a
checklist that, if applied prior to launch, will reduce the likelihood of unnecessarily risky
projects being initiated.
Outside Source
De Beers Web site
Methodology
Primary interviews with De Beers employees, external consultants, and Gartner consultants
who acted as quality assurance on this project, as well as the authors’ industry experience
contributed to the theories and action steps in this case study.
Entire contents © 2002 Gartner, Inc. All rights reserved. Gartner’s prior written permission is required before this
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