Overthe years, most mining companies have made significant investments in a range of back-end technology systems. In embracing a digital future, however, miners will likely need to modernize many of these legacy systems and migrate to a digital core—raising a range of considerations around moving to the cloud, adopting sound cyber risk strategies, and choosing the best approach for modernizing their core systems.
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The digital era has presented mining companies with a significant opportunity to innovate, reduce costs, enhance productivity, improve safety performance, and realize operational efficiency improvements. Unlocking these benefits, however, might be easier said than done—especially given the industry’s ongoing reliance on legacy back-end technology systems.
“Mining industry digital investments to date have demonstrated the potential, but have often been constrained by legacy system and data challenges,” says Paul Klein, Partner, Consulting, Deloitte Australia. “Businesses aren’t expected to be able to realize the full potential of the intelligent mine without modernizing their digital core.”
As Deloitte noted in Tech Trends 2019, “Core modernization seeks to solve the riddle of how companies with significant investments in legacy systems can extract more value from these systems by making them a foundation for new disruptive innovations. Beyond just re-platforming legacy systems, core modernization involves creating a roadmap for building a next-generation enterprise resource planning (ERP) core that incorporates—rather than merely enabling—digital, cloud, and other macro forces.”1
If these gains represent the carrot, the danger of ongoing reliance on legacy solutions that are losing technological relevance and service support is the stick. As major ERP providers roll out next-generation platforms designed to enable real-time transactional processing and data analysis, mining companies are facing an imminent need to update their ERP systems and make choices on whether to host their data on premises or in the cloud.
Whether they are pursuing enterprisewide transformation or making incremental improvements, these are approaches2 mining companies should take into account when considering core modernization:
“There’s an implicit assumption that companies have a choice about whether or not to transition to the cloud,” admits Rakesh Surana, Mining & Metals Leader, Deloitte India. “Miners may not realize that some of their systems and data are already in the cloud. Major ERP vendors have adopted ‘cloud first’ strategies. One of the business implications of many cloud solutions is there are little to no customizations. You implement what you get, and you gain the advantage of frequent upgrades. Business users should quickly adopt standard ‘core’ ERPs. Original equipment manufacturers (OEMs) that generate real-time data from embedded sensors aggregate and share that data in the cloud. Even supervisory control and data acquisition (SCADA) system vendors are communicating over the cloud.”
As a growing volume of data transitions to the cloud, miners should take steps to enhance their cyber risk strategies. Even absent cloud considerations, modernizing the core can introduce new cyber risks. Too often, non-standard and aging assets aren’t properly maintained, and legacy platforms are allowed to persist without appropriate protections, introducing potential threats.
Upgrading these systems presents opportunities to take stock of existing vulnerabilities and craft more robust cyber risk strategies—not only for miners’ back-office IT systems, but also for operational technology (OT), such as SCADA systems, and programmable logic controllers (PLCs).
Admittedly, this is no small task. While OT systems were developed by engineers with safety and reliability in mind, security was rarely embedded into most of them—as they weren’t originally designed to be connected. Today, however, as operational processes become more automated and more operational equipment and OT are connected to communications networks, facilities such as mine sites, mineral processing plants, and remote operations centers are becoming vulnerable to cyberattacks. These vulnerabilities span not just the SCADA systems and PLCs mentioned above, but also potentially electrical infrastructure, integration with supply chain partners, and more.
This is putting engineers under greater pressure to protect OT in the same way information technology (IT) is protected—creating challenges to harmonize the traditionally disparate IT and OT organizations and cultures.
As the pace of technology innovation accelerates, and the intelligent mine is expected to become a reality, mining companies will likely need back-end systems capable of supporting their transformational opportunities.
Deloitte’s Global Energy, Resources & Industrials specialists provide comprehensive, integrated solutions to all segments of the Oil, Gas & Chemicals, Power & Utilities, Mining & Metals and Industrial Products & Construction sectors. Offering clients deep industry knowledge and a global network.
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