By Emilie Ditton
Digital has begun its unrelenting transformation across every industry, even those that have not been exposed to the drivers for transformation through digital until now. Driven by the need to improve efficiencies and to increase market capitalisation, the South African mining industry is increasingly immersed in looking to the benefits that technology can deliver on a journey of transformation. Research by IDC has shown that 61% of local mining companies expect to increase their external IT spend, driven by demanding markets, customers and capabilities, and the need to compete on a global stage.
Technology led operational excellence, process innovation and increased automation are key parts of the competitive differentiation that mining companies will need to build in order that they can attract investors, employees and other stakeholders better than their competitors. Looking at this journey from where we are now, the sector has to do so while also laying the foundations for the development of a sustainable and scalable digital infrastructure. The right foundations are vital to the long-term success of the roadmap.
In the IDC Energy Insights Worldwide Mining Technology Decision-Maker Survey 2017, 66.7% of mining companies operating in South Africa cited the following as their top concerns – increased operational variability, increasing internal costs, and the risk of supply chain disruptions. These are only exceeded by compliance (75.8%) and the need to increase production (69.7%). What these statistics reveal, is a sector wrapped in complexities that require intelligent IT investment underpinned by business transformation to overcome.
This solid foundation will be crucial to success. It will provide the tools and technologies required to support the sector as it navigates compliance, operations, growth and innovation. Part of the challenge however for technology leaders within the mining sector is being able to articulate and demonstrate the value of these new investments. IDC’s research found that 73% of organisations are finding it harder to justify the cost of IT spend, there is pressure to prove this value. Part of this challenge relates to the new collaborative integrated approach across mining operations, IT, engineering and maintenance for example that is required to have the right knowledge and insight involved in the discussion to ensure that the right problem is being solved. Technology investment decisions must be driven by priorities of the business in the mine, so it is effective business as usual collaboration across the business that will drive the right outcomes and get results. Reducing costs and streamlining business operations are a priority for 87.9% of respondents, while 90.9% put operational excellence and innovation in the lead. IT has to meet these very specific demands to prove its value and deliver return on investment.
The change to digital capabilities for mining operations is not an IT project, and it must not be driven by IT, but it must incorporate IT as a key stakeholder bringing governance and enterprise capabilities and skills amongst others. The opportunity is to create collaboration and decision-making approaches that will avoid investing in solutions that extend beyond the cut and paste of the past and instead form a network of scalable, interconnected systems that deliver holistically on their premise. For most companies this means ensuring that the right question is being asked in the first place. Ultimately the opportunity is to create flexible, scalable and critical agile technology capabilities that deliver against the needs of the business and support mining companies in delivery of far more agile, responsive and controlled mining operations.
Emilie Ditton is Associate Vice President for WW Mining & A/P Energy Insights at International Data Corporation (IDC)