The importance of digital technologies to the mining industry is increasingly recognized as organizations explore solutions to mitigate geological uncertainty, market volatility and operational risks. Big Data and the IoT provide “outside the box” opportunities to rethink existing processes in order to unlock additional value.
The question is not so much about relevance anymore, but rather about strategy: How do we get there?
Leading mining organizations are investigating & investing in
transformative strategies that would leverage digital innovation technologies.
Organizations no longer seek incremental technological improvements,
but rather disruptive changes in order to deliver sustainable productivity gains.
Also, the investment horizon is no longer 1-5 years, but rather 10+ years.
Change is a complex process, naturally, as it involves breaking habits, rethinking methods and getting off the beaten track. It requires efforts in order to succeed and establish a new reality. This is particularly relevant to the mining industry, which is historical and subject to inherently complex factors. Yet, change has become a must for the industry and organization have started engaging on a transformative journey. Following a disciplined approach is critical for success.
1. Establish the vision
Digitalization is not an end in itself. Indeed, mining organizations are exploring digital technologies as a mean to become more agile and enhance productivity at a time where margins are shrinking. Also, cash generation definitely is a shared objective, but each organization has its own business drivers depending on multiple factors (e.g. location, size, competition, etc.) and the resulting strategic objectives. It is critical for a mining organization to understand where it comes from and where it is heading, so it can draw the right transformative path in between.
2. Assess opportunities
Every mining organization has trusted relationships with multiple technology suppliers, which deliver selected expertise across the value-chain (e.g. software, mobile equipment, telecommunications, etc.). With Big Data and the IoT trending, each of those suppliers would be ready to offer a compelling value-proposition in terms of Digital Transformation. It is critical for a mining organization to evaluate capabilities against its needs and bring together a number of strategic suppliers in order to engage on the journey together.
3. Engage in partnership
A Digital Transformation is a long-term effort, which requires a trusted relationship between a mining organization and its strategic suppliers. For a successful journey, suppliers have a duty to act as trusted advisors in the best interest of the organization. In return, the organization should keep faith in its partners despite potential obstacles. As in any partnership, the beginning is harder, which means that both parties are required to share risks, contribute enough resources and make the necessary efforts in order to initiate the journey successfully.
4. Involve the organization
Every individual in the mining organization should feel involved. The leadership starts by conveying the Digital Transformation vision and providing the necessary support for change. At the beginning, only a handful of people within key departments will be involved to initiate the effort. However, as the journey progresses and early successes are noticed, it is critical to socialize outcomes across the organization. Indeed, spreading awareness helps unify people and develop a sense of commitment, which will further fuel the transformative spirit.
5. Develop a road-map
Digital technologies have multiple applications in the mining industry, which help deliver productivity gains and streamline the value-chain. Clearly, it is impossible for a mining organization to implement all changes and transform its operations at once. Practically speaking, resources are limited so they should be focused in order to deliver optimal results. Logically speaking, it would make sense to go step-by-step in order to mitigate risks. A mining organization should work with its partners to develop a strategic road-map.
6. Identify “quick wins”
A road-map includes a number of Digital Transformation initiatives, in line with the corporate strategic objectives. When implemented together, they help streamline operations in order to maximize value creation. However, each initiative carries a certain level of complexity vs. impact, so it is important to prioritize them. “Quick wins” allow for maximum return and limited risk within a short timeframe. Those initiatives should be implemented first, not only due to their simplicity, but because they help build momentum at the beginning of the journey.
7. Define a pilot project
Mining organizations are increasingly diversified and international, which makes the implementation of digital technologies even more challenging. This should not be an obstacle and the success factor lies in finding the right operation or project to get started with. In order to do so, one should look for Digital Transformation “champions”, who are particularly appealed by innovation and eager to be role-models in that regard. Those “champions” provide a much needed leadership.
Following a disciplined approach is very helpful in order to
put the right strategy together, gather the necessary
internal / external support and excel in execution.
However, being overly cautious is not always helpful,
especially when it comes to such a game-changing topic
for the mining industry as Digital Transformation.
For mining organizations embarking on the Digital Transformation journey
• Be bold: Mining organizations tend to initiate the journey with disruptive visions, including big bets on new technologies and operating models. In reality, as the actual strategy comes together, most would revert to incremental changes. Being bold does not necessarily mean taking more risks, but rather being ready to test-fail-learn in order to build a change program and transform the entire business.
• Keep learning: There is no single strategy for success. Every mining organization relies on unique business drivers and digital technologies keep evolving as we speak. Besides, going off beaten tracks means that obstacle will certainly come-up through implementation. Hence, it is critical for an organization to keep track of results, capture lessons and adjust its strategy accordingly as it progresses.
• Go fast: Fact is, a Digital Transformation is a long-term effort. However, it is also a race towards greater productivity and all mining organizations around the world are in it. Digital technologies offer unique revenue opportunities for the industry, and it is critical for an organization to capture those ahead of competitors. Besides, going too slowly will destroy the positive momentum such journey brings.
As digital effectiveness becomes of strategic importance for the industry and dedicated teams are put in place in order to steer organizations in the right direction, more questions come-up with regards best practices for a successful transformation. Whether bold or cautious, disciplined or not, speed is of the essence and first-movers will develop a competitive advantage allowing them to experience a sustainable impact on their operations.