How to Prepare for a Digital Transformation in Mining Technology

15 June 2018

Companies need to embrace mining technology or face being left behind by their more agile and technologically savvy competitors. A recent report from Ernst and Young (EY) titled Digital Mining: The Next Wave of Business Transformation shed light on the challenges facing mining companies, as well as the opportunities available if efforts are made to digitally transform business operations. This new release comes in the context of another recent report from EY in which Digital Effectiveness was ranked highest in a list of the top 10 business risks facing mining and metals for 2017–2018. In mining, it is not just individual companies who risk being outpaced by competitors, but the entire industry who need to implement changes to avoid lagging behind in efficiency.

The reason EY ranked digital effectiveness – or the lack of it to be more precise – as the most severe threat to the mining and metal industry is because of existing issues to do with efficiency and productivity. While most sectors have seen productivity increase in line with the advent of digital tools, a 2015 McKinsey study found that worldwide mining operations are as much as 28 percent less productive today than a decade ago. This is an astonishing figure and one that shows how much room the sector has to improve. High-level management should view adopting digital mining technology as a solution to a business problem. By implementing a digital solution, a mining company can improve their productivity and become leaner and agiler to be better positioned to deal with the future.

Mining Engineer

How to Achieve a Digital Transformation in Mining Technology

The incentives for digitization are clear for companies in every sector, especially in mining technology. Now, you need to put a plan in place to achieve this process. The EY report breaks down the process of digital transformation into stages to make the process clearer and more achievable. The stages of transformation are Digital Pre-Start, Wave 1, Wave 2, and Wave 3. For the purposes of this article, we will largely focus on the Digital Pre-Start stage which is about preparing your business for a successful digital transformation.

The Digital Pre-Start stage is all about assessing how equipped you are for digitally transforming your business. It’s important to have a comprehensive understanding of your business, including the current level of digital maturity. This is important because to transform your business in any meaningful way requires a certain level of existing technological infrastructure. If this is not present then you need to invest in that first i.e. data capturing capabilities, a starting level of cybersecurity. You need to walk before you can run.

Set out your Digital Vision

A good way to start your journey is to match up your high-priority areas with the opportunities provided by digital solutions. As mentioned before, embracing digital mining technology is about solving a business problem so it makes sense that your digital vision should align with your business strategy. Cloud-based systems are often an appealing solution for enterprises because they offer the twin benefits of flexibility and scalability. Cloud-based solutions can significantly improve safety and productivity in the hard-hat industries so it seems likely that they will be a key part in your digital vision.

Preparing for digital transformation

Leadership

Once you have a digital vision in place, it becomes the responsibility of leadership to take ownership of this vision and ensure it is implemented. You need to have management in place with the right ‘digital tenacity’ i.e. those with a strong willingness to invest in and embrace digital mining technology. The project and its leadership should be assigned Key Performance Indicators (KPIs) so that you can track the progress of the project using tangible data points. A recent study by Accenture on digital transformation came up with three questions every company’s leadership needs to ask itself:

  1. Which of our senior leaders should be responsible for our digital efforts? To what extent must it be a shared responsibility?
  2. How do we communicate our digital intent to the board of directors, customers, suppliers, employees and other partners?
  3. How should we organize, measure, recruit and reward in a digital world?

Achieving a digital transformation takes strong leadership from the top. Just because the opportunities are clear, that doesn’t mean that making changes.

Improve Connectivity

One of the major reasons why mining operations want to introduce digital mining technology is to improve connectivity between different facets of a business. One of the first steps a business can take on their digital transformation journey is improving levels of connectivity across their business. Data collecting systems such as sensors and smart grids form the foundation for more advanced solutions that come in later stages of the transformational journey. These are often quite affordable. An online contractor management solution such as Initiafy allows for far greater connectivity between workers and managers and can start saving time and reducing costs immediately after it’s implemented.

Miner Digital Technology

Tighten up Cybersecurity and Data Protection

Ernst and Young ranked cybersecurity 3rd on their list of top 10 business risks for 2017/18 and this is an area where the concern is only going to increase. It’s so important that you feel confident in your cybersecurity when you decide to ramp up digitization of mining technology across your business. If you don’t have the appropriate cybersecurity, you will run into serious problems when you attempt to scale up your digital operations. Your choice is to invest a moderate sum in your cybersecurity now or pay a multiple of that down the line when you have to rework systems. The mining industry has been subject to a number of cyber attacks and with only 22 percent of companies prepared for attacks on their cloud-based systems, there is still work to be done.

Another area of increasing concern that goes hand in hand with cybersecurity is data protection. At the senior level of every company, this is being discussed; in relation to the disclosures regarding how Facebook uses data, to the General Data Protection Regulation (GDPR) brought in by the EU to expand citizen’s rights around data protection. These have put a lot more pressure on companies to be transparent and accountable regarding their customer’s data. which Cloud-based systems are a great solution for protecting a company’s and user data because they are scalable and cost-effective. They also allow for the easy retrieval of data and protect you from the potential for an accident destroying your on-premises data storage.

Prepare for the Impact on workers

It’s unavoidable that major advances in mining technology will lead to upheaval within a workforce and how it is structured. Just as the horse and carriage were made obsolete by the invention of the internal combustion engine, digital technology will inevitably have an impact on workers. One of the most difficult parts of your company’s digital transformation is having to retrain and relocate workers as technology eliminates manual processes. Some workers will understandably decide that this is not a challenge they want to take on and leave the company. There is going to be a certain degree of internal reluctance to digital mining technology within a workforce and this is one of the obstacles you should be prepared for.

Conclusion

A digital transformation can be challenging, especially if you are not adequately positioned to make big changes. The best thing you can do to ensure your transformation is a success is to be as prepared as possible by putting in place high levels of cybersecurity and data protection. When making big changes you need to set out a clear digital vision and follow through with strong leadership. You will find that cloud-based SaaS solutions will work well for your digital transformation as they are cost-effective and scalable.

Preparing for digital transformation

Jenny Snook
Jenny Snook

Jenny Snook is content executive at Initiafy with the job of researching the latest health and safety trends in the heavy industry. Her past-experience includes the research of large museum collections such as the Louth County Museum, many from the industrial age.

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