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How oil and gas compares to mining

Wednesday, February 20, 2019

Rachael Bartels, Chemicals and Natural Resources Industry managing director with Accenture, explained how the mining industry is doing its digital transformation and what lessons there may be for oil and gas.

Rachael Bartels, Chemicals and Natural Resources Industry managing director with Accenture, explained how the mining industry is doing its digital transformation, such as with its 'connected mine' offerings, and what lessons there may be for oil and gas.

The mining sector has been through big challenges over the past few years, including with commodity prices tumbling, she said.

It has been forced to re-evaluate where exactly the value is created, and this has sometimes led to a change in focus.

For example, the company saw that it could be better to invest in self organising conveyor belts, which sort ore from dirt within a mine, rather than large trucks, which allow more ore (mixed with dirt) to be transported from a mine. Or it might see that it may be better off choosing a site where a lower volume of product is mined, but it has a smaller concentration of a certain impurity in it, which is expensive to remove, such as arsenic.

The mining sector is aware that just because it is important in society does not mean it is a valuable business, seeing the example of the rail sector, which had the biggest companies in the world 100 years ago.

The mining sector has done many digital projects, including automated vehicles, enormous amounts of data, cloud storage, analytics centres, tracking people in underground mines, fatigue monitoring helmets, weather monitoring and video analytics. But they are mainly 'proof of concepts' - used one in limited project, not across an entire company. 'For every mine site that has it, there's 10 in the same business unit that doesn't,' she said.

When it comes to scaling up the technology, important factors include getting a consensus in the company on where to invest, and finding ways to work with legacy systems. And 'unless you've thought through how to build it into your business you are creating more 'legacy' that needs to be cleaned up,' she said.

Companies tend to be 'quite risk averse about stuff they haven't done,' she said.

Mining companies also recognise that they need to be more co-ordinated and decentralised about their technology implementations, although have different ways to do it. Some of the smaller companies are able to implement technology via command and control, with a direction from the top that everybody will use a certain technology.

But larger companies with many different types of mines cannot do this, so they need alternative approaches such as setting 'standards' for how technology will be implemented in certain sorts of mines, or trying to co-ordinate the technology development between similar sites.

A critical element proves to be having a CEO who believes in the technology, and is willing to put staff in charge of driving the company's development of technology, perhaps as a 'transformation office'.

Ms Bartels says that a 'North Star' - or an idea of the destination - is very important in motivating people. It should be 'big and bold'. 'Big goals make people more uncomfortable, so you have better ideas.'

You also need a structure around the program, with process and discipline, not let it get 'loosy goosy',

You may want to do things which conflicts with other targets people have. For example, if your data analysis shows you might be better off processing product in a different place, there will be people whose department budgets will be adversely affected (i.e. spending more than they would otherwise), and people might be more motivated / rewarded by whether they meet their budgets than anything else.

The companies which were most successful were ones who did a revamp of their performance management system, so people would be rewarded for different things. 'When they move, the whole company moves so much faster,' she said.

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» Accenture

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