27 Nov 2017
SYDNEY, November 28th, 2017 – The opportunity for mining companies to leapfrog competitors within their commodity segments through the creation and application of new technologies impacting people, process and industry business models has arrived. This IDC report “Digital Transformation (DX) in Mining: What a Difference a Year Makes” looks at the change that has taken place in the mining industry between 2016 and 2017. IDC predicts that in the 12 months leading mining companies will leapfrog within their commodity segments – leading the industry in profitability, cost efficiency and safety.
The mining sector is facing waves of changes that will impact every aspect of the way that companies and the industry operates. Companies have a choice how they respond, but the reality of the requirement for transformation is a certainty. This process has just begun but in the last 12 months the transformation has accelerated dramatically. Discussions at various industry forums throughout the course of 2017 demonstrate how progressed the change is. Companies are actively anticipating the technology, process and culture change that is required and incorporating this within business and technology strategy initiatives. Focus of DX initiatives include the following; each represents a significant acceleration down the path to transformation.
But, where is the sector going with this transformation? What will a new mining operation look like? Change will impact every aspect of a mining operation; how the value chain is integrated, how resources are allocated, how talent is accessed, how innovation is enabled and how supply chains deliver products to market. Sustainability of resources and minimisation of waste will be a critical focal area for change. The impact of automation and remote control has already been seen, and will continue, but with much greater impact ahead. The future of mining will be heavily automated, far beyond what we see now – dramatically impacting the design of mine operations. Technologies like cognitive and artificial intelligence will change how decision making by people and equipment can take place. The industry will be built around internal and external organisation, and value chain collaboration. The impact, as we have started to see, of this wave of change will be new business models, new opportunities for cost efficiency at scale, driving a fundamental change in the feasibility of mining projects, and new opportunities for integration between the ore face and end customer markets that will change business opportunities.
“Taking the opportunity to leapfrog within this industry is much more a question of culture, change management, integration and vision, than technology. The technology is important, but organisation, decision-making, how you engage vendors, and structure of performance metrics are really critical success factors in implementing the change. And, of course culture, and leadership change – this is the overarching element that mining companies need to tackle,” says Emilie Ditton, Research Director, IDC Energy Insights.
While vision is critical, mining companies have significant integration challenges that need to be tackled. The integration of IT and operational technology (OT) across software, systems, governance and organisation is a critical part of the transformation. This is area the industry is continuing to place considerable focus on. Huge variation exists in the approach mining companies are taking in the absence of standardised integration between IT and OT systems. Ongoing custom integrations, web based integrations and working with a number of key vendors who are building platform based capabilities promising to enable the required data based integration are key focus areas. This will continue to be a challenge, particularly in the area of control systems, equipment integration and off the shelf integration.
‘Huge variations in capability to actually deliver a step change in outcomes exist across the industry,” says Ditton. “Mining companies that are able to create the future operating environment will have an opportunity to leapfrog the industry that will create big changes in the profitability, safety and social outcomes of the mining sector.”
IDC’s assessment of the current position of the mining industry measured against IDC’s five stage DX Maturity Benchmark is shown in red below.
Figure 1 - Source: IDC DX MaturityScape Benchmark in Mining, October 2017
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