It’s been about two to three years since many mining companies started down their digital journeys in earnest. Looking back over this time we have seen some firms making strong advances, but others struggling to realize the full return on their intelligent mining investments. Now may be a good time to take stock and review some of the lessons learned so that companies can optimize their digital journeys and unlock sustainable value.
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Accelerated adoption of digital technologies, artificial intelligence, and analytics solutions is sweeping the globe—and the mining industry is no exception. With several years of proofs of concept under their belts, however, mining companies are coming to recognize that the intelligent mine is not merely a technology play. To drive true change and realize the value promised by countless use cases, miners will likely need to transform the way they view their operating models, make decisions, attract and train talent, engage with their stakeholders, and optimize resources.
Given the scope of the transformation that may be required, it’s likely no surprise that many mining companies have yet to achieve the full benefits (or any value at all) of intelligent mining. To help turn that tide, it can be useful to consider the lessons learned to date on the road toward intelligent mining—and examine some of the practices companies can consider adopting to help lay a solid foundation for future success.
While many companies have articulated a clear digital strategy, few have adopted the organizational changes needed to deliver on that strategy. As a result, operational-level initiatives are often run in isolation, limiting their enterprise value.
“Much of the value of the intelligent mine is delivered by ensuring the foundational building blocks (connectivity, data management, technical architecture, etc.) are in place and by moving toward an integrated organizational model,” explains Rhyno Jacobs, Director, Consulting, Deloitte Africa. “By understanding who is measured by which input KPIs, enabling coordinated decision-making, companies can leverage interdependencies, avoid duplication of efforts, and unlock huge benefits across the mining value chain.”
This isn’t to suggest that operation-level initiatives should be managed centrally. In fact, initiatives designed to deliver value at the business unit level should likely cede operational autonomy and accountability to business-level management. It is important, though, that successful value-creating operational-level use cases are scaled across the organization. To achieve this a central function is typically needed.
There are several more areas particularly ripe for centralization—including planning, execution, data management, funding and procurement, and measurement.
Many companies have focused most of their efforts on technology and not the people who need to use it. Companies that have been successful in their digital journeys have often been ones that recognize the importance of change management, and a good portion of realizing the value can come from changing people’s behavior.
This typically involves many different elements, which can range from understanding the key stakeholders around each initiative and driving the messaging and collaboration to support that, all the way through to employing techniques like human-centered design to understand how the people will interact with the technology, and finally adapting the design around these insights.
Many have assumed that technology will be the solution to a particular problem. People are also critical, but very often companies need to fix the underlying process. Without that underlying process redesign, technology can become a bandage, trapping the underlying value to the organization.
While it can often feel time consuming, there is significant benefit in investing up front to examine critically the underlying processes connected to the problem you are trying to solve and make the investment to rethink it, looking at the connected stakeholders and what data are required to facilitate effective decision-making. As with any project, it’s hard to separate out people, process and technology as these three areas are tightly interwoven.
Before companies can make the right decisions at the right time, they need access to accurate, timely, and complete information. Getting to this ideal state typically requires considerable up-front investment.
“Many companies expect to generate robust insights as soon as they embark on their digital journeys,” says Roland Labuhn, Partner, Consulting, Deloitte Canada. “Focusing on business issues should guide where to focus. Building scale in insights and analytics requires a different path than just one of business use cases. The processes, teams and technologies of data and analytics are not new capabilities for many of our clients, but excelling in these fields takes discipline and commitment to a corporate culture that supports the journey.”
On review of corporate initiatives to date, it appears that many mining companies have underestimated the amount of effort required to clean up their data and upgrade their technology infrastructure. According to Labuhn, up to 50 percent of a company’s digital spend will need to be allocated to “below the line” technologies—from basic infrastructure updates, to improved Wi-Fi and connectivity, to the adoption of appropriate operations technology and platforms.
As mining companies move toward integrated operations centers that help guide decision-making across the value chain, they should consider how to staff those centers. What skills do companies need on-site to support them in achieving their desired business outcomes? And should they build that capacity in-house or outsource it to external partners?
“In preparing for the work that will be performed on the future intelligent mine, companies should think beyond the attraction and retention of scarce talent and also consider how emerging talent models could affect their vision for intelligent mining,” says Jacobs.
Miners may need to refine their approaches to identifying and selecting the right external partners. Countless vendors have entered the scene in recent years, and choosing among them requires companies to plug into a larger ecosystem—not only to understand how the capabilities environment keeps shifting, but also to learn from other organizations’ experiences. This generally means subscribing to relevant publications and attending conferences and events to gain exposure to up-and-coming digital technology vendors, and creating ecosystem alliances to solicit input and advice from companies both within and outside the mining industry.
When it comes to selecting solutions partners, it’s important to understand what they can—and can’t—provide. Not every technology vendor will be properly equipped to deliver full implementation and integration support. Without access to this expertise, companies can discover that their new systems fail to drive business improvements, don’t interoperate with existing systems, or don’t gain employee adoption—and they often end up blaming the technology instead of the integration and transformation process. To avoid these missteps, companies may need to bring in specialists who have proven experience supporting successful technology implementations.
Finally, it’s important that the portfolio of digital initiatives strikes the right balance between initiatives that can deliver value in the short term (0–18 months) and those that are bets for the future. Companies that skew too much of their portfolio to the long term often find themselves losing momentum with executive teams and boards.
Demonstrating value is important to change management and can earn the digital team the license to tackle deeper and potentially more value-generating opportunities.
“An effective digital initiative requires mining companies to win the hearts and minds of people throughout the organization or the transformation will often not last,” says Steven Walsh, Consulting Partner, Deloitte Australia. “To do that, one must find a balance between delivering short-term value to those at the front line while tackling some of the bigger organizational issues desired by the executive. Listening to the small things that your people value can pave the way for the big things to come,” says Walsh.
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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