Fool’s Gold: Is the promise of digitisation in mining too good to be true?

We are constantly hearing digital transformation is the next big game changer for the mining industry.

The potential gains of digital transformation are deep and wide reaching, including lower costs of extraction, fewer accidents on site, and a more diverse workforce.

But how much of these big promises can be believed and can we actually implement them?

The promise of digital transformation for mining is real and it is achievable.

In the last decade, we have seen successful implementation of innovative technology in the mining industry, from the first large scale remote operations and automation, through analytics and visualisation to the most recent applications of machine learning.

The question is can these digital projects be competitively repeated and sustained?

To understand the longer-term digital journey it is useful to get feedback from sectors other than mining.

Deloitte conducts annual research on digital transformation trends with the MIT Sloan Management Review, assessing how companies, across a wide range of industries, are adapting their organisations to a digital environment.

Two key factors in digital transformation identified by the survey – the challenges organisations face and the differences people feel in working in a more digital environment.

The challenges organisations face

Lack of Experimentation – The biggest challenge for respondents’ in terms of competing in a digital environment is lack of ability to perform experimentation.

Ambiguity and Constant Change – The second most significant challenge reported is how organisations wrestle with ambiguity and constant change. The degree of ambiguity will be increased and the degree of speed required will be increased. They need leaders to assemble at any point in time a coalition of people guided by purpose, more than task or functional area necessarily.

Buying and implementing the right technology – The third most significant challenge is buying and implementing the right technology. More mature companies are somewhat better at this task, as organisations further into their digital journey may have come to realise the people and organisational components are key to success while early-stage companies may be putting too much weight, and worry, on selecting the right technology as the silver-bullet.

Transparency of Information – the increasing demand and need for transparency within the organisation and with external parties is a real challenge for many mining organisations investigating digital technologies. Working with technology vendors and service providers, there is reticence on all sides to share information freely and to adjust to the need for greater transparency.

What is the biggest difference for workers?

Pace of Change – The biggest impact cited is the pace of doing business. Put simply, digital business requires companies to act and respond faster than they ever have before.

Culture and Mindset – The second most common difference relates to culture and mindset. These responses centred around the need for changes to organisational culture, but responses were not entirely positive. Many respondents note that these cultural shifts also result in tensions with employees who have a more traditional mindset.

Flexible, Distributed workplace – The third most common difference was organisational structure. The workplace of the future is about the structures and practices to enable people to create and deliver value. The workplace becomes a network of high performing and diverse teams coming together to solve business problems or deliver on opportunities; nimble, innovative cultures create engaged and interesting workplaces.

Looking at the increasing digital maturity of organisations outside the mining industry shows organisations that successfully adapt are able to outperform their competitors, and provide rewarding and engaging work environments for their people. It is the people, culture and mindset that is fostered which leads to longer term success as a digitally-enabled organisation.

Steps to successful digital transformation

To ensure the promise of digital transformation is not too good to be true, we recommend organisations plan and discuss how they:

  • Create a culture that allows for experimentation and isn’t deterred by a fear of failure
  • Develop leaders who are purpose driven, rather than task or functionally-led
  • Avoid decision-paralysis when it comes to buying and implementing the right technology, by having strong project stage gates designed for the digital journey
  • Be open and transparent about the strategic direction and current state of your digital roadmap, both internally and with suppliers and partners
  • Review communication and decision-making structures in order to act and respond quickly to opportunities and challenges
  • Invest in the cultural and mindset shift across all levels of the organisation that is required to perform in a digitally-led workforce
  • Consider how to adjust your organisational structure to allow for a flexible and distributed workplace.

Deloitte’s latest global insights here.

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