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The mining industry has been known for failing to adopt technological advances, and for years it has fallen behind other sectors in terms of digitization. Companies have been reluctant to integrate new technology into their processes due to the complexity of their day to day operations and because the cost of implementation has also acted as a barrier.
The World Economic Forum and Accenture recently published a paper that highlighted that there is around $425 billion worth of unlocked value for the next decade for the mining industry, customers, society and the environment that is not being harnessed due to the lack of digital adoption in the industry. These figures have further pushed the fact that mining companies need to keep up with other global sectors and look to digitizing their operations in order to enhance their productivity, end-product quality, working conditions and more.
Fortunately, it would seem that mining companies are now ready to take the step to modernize the industry through adopting innovations and digitization. They are beginning to recognize that the value proposition of the industry has begun to shift, and it is now focused on optimizing production, enhancing efficiency, boosting safety, streamlining and cutting costs. The business model of the mining company is changing, and the future hinges on these company’s abilities to incorporate new technologies into their processes and to replace outdated ones.
Digitization of Mining Companies Could Lead to No Back Office
One major potential outcome for mining companies choosing to embrace digitization is the possibility of operating without the need for a back office. This method of working could lead to a significant reduction in overheads, helping to make operations more streamlined and profitable.
It is predicted that mining companies who successfully implement technology could at some point in the near future evolve to the point where they are using data so effectively that the physical back office becomes redundant.
The financial services sector act as a demonstration of this, where major industry players have caused disruption in the industry through the ability to run operations with much lower overheads due to their efficient utilization of appropriate technologies. This is enabling digitally savvy companies to gain a competitive edge over competitors.
It is argued that mining companies could be positioned to gain the same reduction in overheads and competitive advantage through the correct implementation of new technologies. Mining companies could theoretically run all their operations through the cloud, this would remove a need for a physical back office, and therefore eliminate the costs associated with running one.
It is predicted that this potential eventuality may not even be that far in the future, given that finance, human resources, IT, and procurement are already outsourcing their back-office functions. Removing the back office would fit into the nature of mining operations as mining executives already spend a great deal of time away from the office, making visits to sites, customers, government officials, and conferences. Running the business virtually would benefit the way of working that mining management already has.
Experts believe that mining companies who want to be successful in the future need to be implementing the latest technology not only to improve operations but also to ensure they appeal to millennial talent, in order to keep expertise in their companies as they move forward. This added need for the adoption of technology should see more mining companies digitizing their processes in the coming years, with potentially the first companies operating without a back office. The future digitized mining company may have fully integrated communications networks, technology to support the mobile workforce across all platforms, use AI to support knowledge workers and rely on digital systems will simplify work schedules.