The modern mining industry faces a multitude of challenges, such as low productivity, price volatility, disrupted supply chains, increasingly remote, deeper, and lower-grade deposits, and rising social, legislative, and financial pressures on global players to show commitment to environmental, social, and governance.
Digital transformation offers new pathways for operational improvement across the mining sector, providing businesses with opportunities for value creation, capturing and maintaining resilience amidst existing challenges, and securing future competitiveness amidst new ones. Digital tools challenge traditional models from exploration to distribution, improving productivity, safety, decision-making, environmental impact, and social performance.
Despite all this glitter, several studies have shown that adopting digital technologies in the mining industry has not been widespread or consistently successful due to essential barriers present throughout their life cycle, particularly the gap between mining strategy and execution (BCG, 2021).
According to an internal DMT study, the challenges extend beyond technological complexity. Leadership, organizational structure, and company culture emerge as the primary barriers, suggesting that a successful transformation hinges on these factors.
Effective leadership, understanding of available technologies, and a forward-thinking vision are essential to overcoming these barriers. Leadership’s role in providing direction, mobilizing resources, and fostering an innovative culture cannot be overstated, the study adds.
DMT’s survey findings illuminate that organizational culture is pivotal in digital transformation. Therefore, successful digital transformation is not solely reliant on technology; it is deeply influenced by the culture that permeates mining companies.
As stated by Hanifa Indradjaya, the president director of PT Petrosea: “The main contributor to our success has been our ability to change people’s mindsets—effective change management and a solid focus on what needs to be achieved” (McKinsey, 2020).
DMT’s survey showed that a significant 70% percentage of respondents view culture as a barrier to achieving digital goals. Indeed, a culture resistant to change, lacking innovation, or hindered by siloed mindsets can create resistance to implementing digital transformation initiatives.
However, another 25% of respondents view culture as an enabler of digital goals. This indicates that some mining companies have developed a culture that promotes innovation, encourages collaboration, and embraces change. Such a culture empowers employees to participate in digital initiatives actively and drives the achievement of digital goals.
The survey analysis reinforces the idea that organizational culture can act as a barrier or an enabler of digital transformation. Recognizing the importance of cultural factors and actively shaping the organizational culture can significantly enhance the chances of successful digital transformation.
DMT’s approach acknowledges that digital transformation is not just about technology; it is about reshaping processes, fostering a culture of innovation, and creating a foundation for growth.
DMT supports mining companies throughout their digital transformation journey, including current state assessment, strategy, technology valuation, and change management, emphasizing process reshaping, innovation culture, and sustainability.
References:
BCG (2021). Racing Toward A Digital Future in Metals and Mining, https://www.bcg.com/publications/2021/adopting-a-digital-strategy-in-the-metals-and-mining-industry
EY (2023). Top mining sector trends and challenges in 2023, https://www.ey.com/en_gl/mining-metals/top-mining-sector-trends-and-challenges-in-2023
McKinsey (2020). Buckets of innovation: How digital has transformed a mining company in Indonesia. https://www.mckinsey.com/industries/metals-and-mining/our-insights/buckets-of-innovation-how-digital-has-transformed-a-mining-company-in-indonesia
