This year, 2018, has been the year that digital transformation (DX) became mainstream in the mining sector. The challenge now for technology leadership across IT and operations within mining companies is delivering a return on the initial investments and then being able to make the case for the ongoing change that will be required across technologies, people, and processes to continue to reap the value that these expanded capabilities offer to leverage data further. The opportunity is to move beyond optimising the current operating model and operational siloes and focus on an integrated value chain within an open ecosystem.
Mining companies are facing the challenge that having made the first serious steps toward digital — and realising this is a change on the transformation of the business — will mean ongoing change across people, processes, and the organisation. Across the sector, companies have a requirement to create clarity about where they are trying to get to and why they are trying to get there. Answering these questions is critical to ensure that the direction that is chosen and the investments that are made deliver the expected value. Mining companies have to develop a cross-company coordinated digital strategy and an associated, unified, single road map.
Across the sector, most companies have many ongoing technology investments. Asset operations are a continued focus for the delivery of value. It is critical to move beyond the optimisation of single assets to considering systems of assets and being able to assess the impact of decisions relating to asset shutdown and maintenance activities on adjacent and impacted processes and production as a whole. The reality is that much of the sector really needs a continued focus on good practices across integrated maintenance and operational scheduling and execution to ensure value is delivered. Within mining operations, short-interval control capabilities must be a key focus. To succeed, these projects need to be considered in terms of their change management across technologies, people, and processes. Implementations, such as short-interval control, must be led by the business; companies should avoid thinking about them as a technology project.
Lastly, platforms have reached the mining sector. For the last few years, investing in platforms for the collection and analytics of equipment data has been a major investment priority within operational budgets for IT-related investments. This continues. Companies need to ensure they have clarity as to the purpose of the platform and are rigorously thinking about the value the platform will deliver. IDC’s research shows that most companies are struggling to answer this question. Those that are able to articulate the value and purpose will be able to enact the change required to be platform-ready and succeed. This will mean recognising that broad-based access to data will mean doing things in a different way and will have a fundamental impact on the way the organisation operates and measures itself and likely mean reviewing key performance metrics to create the business platform to deliver an integrated value chain. Platform investments are currently focused within asset operations, but this will extend to a layered platform environment extending across mining operations, assets, the ore body/geology, and processing.
This IDC study contains the outlook of IDC Energy Insights’ analyst team for the worldwide mining industry for 2019–2023. The outlook is presented through the lens of the 10 predictions that make up, in IDC Energy Insights’ view, the framework for IT and line-of-business (LOB) decision makers and influencers’ technology-related initiatives in the year ahead.
IDC Energy Insights’ top 10 predictions for worldwide mining for 2019 are:
- OEM ecosystem. Haulage automation will increase by 30% to 2020 as OEMs collaborate across new ecosystems, bringing together connectivity, AI enablement, and an integrated platform-based management environment.
- IT/operational technology (OT) integration. Mining companies that fail to integrate at least 50% of their operations and IT systems by 2022 will gain no value from DX regardless of strategy, organisation, or technology focus.
- Digital governance. By 2020, 80% of mining companies will have created unified digital road maps, but only half will realise value by implementing a collaborative IT and operational governance model.
- Sustainability. With maturing predictive capabilities and converging efficiency, license to operate, and sustainability factors, 25% of mining companies will have invested in water and energy management systems by 2021.
- Digital operational excellence. By 2021, companies that embrace continuous improvement and digital innovation as a single integrated business process focused on change management will outperform peers in terms of profitability by up to 20%.
- Mining workplace. By 2024, 30% of mining companies will have workforce strategies that redefine roles, skills, and talent for the delivery of dynamic and real-time work allocation across optimised people/machine (cobot) systems.
- Yield tracking. By 2022, 50% of mining companies that prioritise an integrated approach to tracking yield via process control and real-time decision support will achieve an industry-leading performance.
- Operational connectivity. Spending on connectivity infrastructure within operations will increase by 30% by 2020, driven by requirements for increased automation, real-time decision support, and short-interval control.
- Platform ROI. By 2021,100% of large mining companies will have implemented platforms to collect operational data, but only those that focus performance metrics and process change will achieve ROI.
- Digital twins. By 2024, challenged by siloed data, 25% of mining companies will have created digital twins integrating geospatial, geological, and mine operation insights to integrate planning, execution, and maintenance.
In 2017, the mining sector was understanding DX; in 2018, it happened. Digital-led transformation is now on the agenda for mining companies across the industry. However, challenges still remain in bringing together traditionally siloed functions. Mining companies must tackle the need for consistent, company-level strategy and direction and be clear about what that strategy setting tells them about how their business needs to be operated, measured, and organised. Without this focus, companies will not be in a position to take advantage of the potential value that digitally transforming presents.
Learn more about the 2019 Mining Predictions
For context around these predictions, including the IT impact and guidance on how to integrate each prediction in the digital strategy of the enterprise, view the IDC FutureScape: Worldwide Mining 2019 Predictions web conference on-demand.
Christopher Holmes, Managing Director, IDC Insights Asia Pacific