2 min read
The mining and minerals processing sector is traditionally cynical of the return on investment from digital transformation, and it’s not hard to see why.
The manufacturing sector has already experienced some well-known disappointments from digital transformation projects that failed to achieve an adequate ROI.
In fact, research from McKinsey suggests that 70% of transformation initiatives fall short – despite the huge sums dedicated to them.
70% of transformation initiatives fall short – despite the huge sums dedicated to them.
For instance, GE spent billions on a whole of company IoT platform only to discover the company was simply too large to transform all at once, especially without a true vision of what it was trying to achieve.
Expected return on investment from digital transformation
Even despite known failures, enterprises are now expected to invest more than US$1.3 trillion in digital transformation initiatives to improve efficiencies, increase customer value and create new monetisation opportunities.
That’s because digital transformation can bring significant benefits to the mining and mineral processing industry, including:
- boosting throughput
- simplifying processes
- lowering costs
- improving metal recovery
- increasing yield
- reducing supply chain complexity
It can also help companies achieve ESG goals, for example by providing accurate data insights and empirical evidence and facilitating sustainable design.
Why so many digital transformation initiatives fail
Sadly, research tells us that 70% – 95% of digital initiatives will not reach their stated goals. That equates to over US$900 billion worth of spend that will miss the mark.
“This is mismanagement on a colossal scale,” wrote Steven Zobell, Chief Product and Technology Officer for Workfront in ‘Why digital transformations Fail: Closing the $900 Billion Hole in Enterprise Strategy’.
Naturally, the extraction industry faces similar challenges and headwinds to that which any industry faces, including:
- The need to continuously improve operational performance (output, quality, system efficiency, safety, etc.) – while simultaneously creating shared value to satisfy the community, shareholders and regulators
- Increasing pressure to meet ESG requirements
- Increasing pressure to meet Paris Agreement targets
On top of this, the global COVID-induced move toward rapid technology adoption means being afraid of failure isn’t going to cut it at your next performance review.
So, what can you do?
You can stop thinking digital transformation is just about technology.
How?
By breaking down how successful transformations are achieved – usually, they involve a combination of systems thinking, incremental improvement, operational imperatives, human factors and operational excellence.
As Mipac Solutions Manager Dominic Stoll says: “Understanding where your operation is positioned in its digital maturity journey is the best place to start.”
Understanding where your operation is positioned in its digital maturity journey is the best place to start.
Interested in learning more about digital transformation?
Download our digital transformation whitepaper
Click on the link below to download our full Digital Transformation whitepaper.
In this whitepaper, you will learn about the challenges facing miners in the post-COVID world and the impact of digital technologies in unlocking new levels of prosperity for both industry and society.
