Mining And Metals Companies To Increase Spending On Digital Technologies To Boost Innovation, But Cost-Savings Still A Challenge, New Accenture Research Reports
With increased IT/OT integration, resolving data security concerns is high on miners’ agenda
Bangalore; May 11, 2017 – Four of five mining and metals companies expect to increase their spending on digital technologies over the next three years, with more than one-quarter (28 percent) planning significant investments and almost half (46 percent) citing digital as the biggest contributor to innovation, according to new research from Accenture (NYSE: ACN).
Based on a survey of approximately 200 mining and metals executives and functional leaders worldwide, the Digital Technology in Mining report shows that the convergence of information and operational technologies (IT/OT) and adoption of cloud computing are advancing the digital agenda, prompting the need for more stringent cybersecurity measures.
Mining and metals executives said their companies have applied and will continue to apply digital technology over the next three to five years predominantly in mine operations, but also in exploration, mine development and other areas. Most of the investments in mining operations target robotics and automation, named by 54 percent as a top spending area, along with remote operating centers, drones and wearable technologies, each at 41 percent.
“Our research confirms that mining and metals companies are investing in digital led innovation to help them improve operational efficiency, and address issues such as raising capital as well as compliance costs,’ said Sandeep Dutta, Managing Director and Lead, Resources, Accenture in India.
Organization-wide, the most often cited benefit from current digital technology investments was improved workforce productivity, driven most by mobile/tablet devices (32 percent), automation of mobile and/or fixed assets (30 percent) and simulating physical environments (30 percent). Cost savings across the organization ranked lower as a benefit than improved workforce productivity in general.
The relatively early stages of adoption for certain digital technologies might make it a challenge to identify all areas of bottom-line benefits of digital. However, digital transformation could actually unlock USD $190 billion in value industry-wide over the next 10 years, according to an analysis by the World Economic Forum with Accenture Strategy: “Mining and Metals Digital Transformation and the industry’s ‘new normal.”
Overall, almost all executives (97 percent) said they were satisfied with their digital investments over the past 12 months, with almost two-thirds (64 percent) ‘relatively satisfied’ and one-third (33 percent) ‘extremely satisfied.’
Growth in IT/OT Integration and Cloud Prompts Cybersecurity Measures
Asked to identify the top three barriers to gaining more business value from digital technologies, executives most often cited cybersecurity concerns (37 percent), followed by volatile commodity prices (29 percent), internal data management capability (27 percent) and lack of funding (27 percent).
However, executives cited cybersecurity as the most widely adopted technology across the organization-wide (32 percent). In addition, 25 percent said they are testing pilot programs for cyber security, and 33 percent have developed or are defining strategies for it.
“Although still in the early stages, mining and metal companies in India are starting to adopt large scale platform solutions, which is driving the growth of cloud in this segment,” said Saurabh Bhatnagar, Managing Director, Mining and Metals, Resources, Accenture in India. He added, “Even as companies evaluate their cloud strategy, they are starting to consider potential cyber security risks, creating mitigation strategies in advance.”
Regarding IT/OT integration, more than half of the respondents (56 percent) reported that their organizations are considering merging their IT and OT departments in the next 12 months, which would advance this trend.
Mining and metals companies are also continuing to adopt cloud computing technologies broadly. Four in five respondents (81 percent) said their companies have implemented some form of public, private or hybrid cloud, and another 17 percent said their company is exploring the use of cloud technology.