SAFEGUARDING PROJECTS THROUGH INDEPENDENT PROGRAMME ASSURANCE Cathy du Plessis Global Manager Independent Programme Assurance Audit PMI AFRICA CONFERENCE 2015

Safe-guarding Projects through Independent Programme Assurance Introduction to SABMiller Internal Audit Why do we need independent programme assurance (IPA) What is independent programme assurance How we provide IPA in SABMiller – Global Virtual Teams Our methodology Africa Capital Projects case study PMI AFRICA CONFERENCE 2015

Introduction to SABMiller Global Internal Audit We are one of the world's largest brewers with 70,000 employees. We have brewing interests and distribution agreements across six continents and presence in 75 countries.  Our wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch along with leading local brands such as Hero, Mosi, Castle, Miller Lite and Club Premium Lager.  We are also one of the world's largest bottlers of Coca-Cola products

Introduction to SABMiller Global Internal Audit Our primary brewing and beverage operations in Africa cover 17 countries including Botswana, Mozambique, Nigeria, South Africa, Tanzania, Uganda and Zambia. We bottle soft drinks for The Coca-Cola Company in 23 of our African markets

Safe-guarding Projects through Independent Programme Assurance Introduction to SABMiller Internal Audit Why do we need independent programme assurance (IPA) What is independent programme assurance How we provide IPA in SABMiller – Global Virtual Teams Our methodology Africa Capital Projects case study PMI AFRICA CONFERENCE 2015

Key risks per the 2014 Annual Report Independent Programme Assurance purpose: To provide an independent opinion on the risks to the business based on the project status, to give assurance to executives to support decision making. Our reports are a formal record and require specific audit evidence. Stakeholders include the Audit Committee, Executive Board, Programme Sponsors, Regional and Country MD’s.

For most companies, investing in technology is a significant cost that is made with associated risks. 68% 2 out of 3 projects of all IT projects fail or are challenged, come in over budget or run past the original deadline... (Source: The Standish Group CHAOS report, 2009). 50% Nearly half of all application development projects cost 70% more than originally budgeted. of businesses in 2013 had an IT project fail. (Source: CIO magazine, Innotas, 2013) 28% of projects fail altogether *19% in 2006

Safe-guarding Projects through Independent Programme Assurance Introduction to SABMiller Internal Audit Why do we need independent programme assurance (IPA) What is independent programme assurance How we provide IPA in SABMiller – Global Virtual Teams Our methodology Africa Capital Projects case study PMI AFRICA CONFERENCE 2015

What is Independent Programme Assurance? Programme governance: A working definition The UK Office of Government Commerce (OGC) defines governance as: The control framework through which programmes deliver their change objectives and remain within corporate visibility and control. The Stage Gates and Check Points, strategies and approaches, tools and reporting are the control framework used to govern our implementations.

What is Independent Programme Assurance? Source: National Audit Office, Assurance for high risk projects, June 2010 Assurance provides information to those who sponsor, govern and manage a project… to help them make better informed decisions which reduce the causes of project failure, promote the conditions for success increase the chance of delivering the required outcome cost-effectively. It helps ensure the disciplines around delivering projects are followed and highlights where they have not been.

Safe-guarding Projects through Independent Programme Assurance Introduction to SABMiller Internal Audit Why do we need independent programme assurance (IPA) What is independent programme assurance How we provide IPA in SABMiller – Global Virtual Teams Our methodology Africa Capital Projects case study PMI AFRICA CONFERENCE 2015

How we provide Independent Programme Assurance? Independent programme assurance is a function within Group Internal Audit. We work through a globally integrated team of internal auditors and subject matter experts, with specific qualifications such as PMP, Prince2, CISA, SAP credentials and proven practical experience with programmes / projects. The Programme Assurance Team provides independent assurance over major change and capital programmes in SABMiller globally. We align with other assurance providers such as external audit, internal controls, PMOs.

How we provide Independent Programme Assurance? Successful global / cross cultural teamwork: Two annual face to face team meetings: 1. planning and 2. goal setting; Monthly team telepresence; Bi-Weekly team calls – with check in; Weekly one on one calls with my staff; Daily review calls close to gates; Strong Regional relationships (local language)

How we provide Independent Programme Assurance? Health Check On Going Stage gate review Deep Dives

Safe-guarding Projects through Independent Programme Assurance Introduction to SABMiller Internal Audit Why do we need independent programme assurance (IPA) What is independent programme assurance How we provide IPA in SABMiller – Global Virtual Teams Our methodology Africa Capital Projects case study PMI AFRICA CONFERENCE 2015

Internal Audit’s Involvement Project’s Involvement Our Methodology Programme Assurance Sign-off Delivery Management Methodology Deliverable Responsibility Matrix Milestones & Plans Progress Tracking Stage Gate Report Stage Gate Criteria Programme Assurance Report Stage Gate Management Governing layer Internal Audit’s Involvement Project’s Involvement Programme controlling and enabling layer Programme delivery layer 16 16

Our Methodology example 3 Deep-dive Review examples Data Validation Solution Design Review ITGC Security Review Training Approach Review Testing Technical Review Post Implementation Review Business Continuity Planning Review for go-live

Our Methodology: Ratings © SABMiller plc

Safe-guarding Projects through Independent Programme Assurance Introduction to SABMiller Internal Audit Why do we need independent programme assurance (IPA) What is independent programme assurance How we provide IPA in SABMiller – Global Virtual Teams Our methodology Africa Capital Projects case study PMI AFRICA CONFERENCE 2015

Africa Capital Projects Case Study 600 Million USD spend in F15 on capital expansion in Africa: Four IPA reviews completed by Country Internal Audit and Hub Internal Audit Leads Greenfield Brewery Greenfield Maltings Plant Brewery Expansion: Project Super Hero Brewery Expansion: Project Enthrone

Presentation information in footer Africa Capital Projects Case Study Objective of Review: The objective of the audit was to ensure that the elements fundamental to successful project delivery are in place and operating effectively, which includes material compliance to the SABMiller Capital Projects Way as outlined within the scope below. Scope of Review: The audit scope was limited to the following: SABMiller: Capital Projects Way : Adherence to stage gate process; SAB Accounting Policies and Treatments Project Governance Communication and Change Management Supplier Selection, Monitoring and Contract Management Presentation information in footer

Africa Capital Projects Case Study Detailed Recommendations Audit Issue Section 1: Project Governance and compliance with the SABMiller Capital Projects Way 1 Lack of explicit stage gate approvals 2 Approval of design change not appropriately formalised with a Decision Supported Note (DSN) 3 Project information not kept up to date in Capital Projects Tracker (PPO) Communication and Change Management 4 Lack of a formalised project communication plan Supplier Selection, Monitoring and Contract Management 5 Unsigned supplier contract

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