Digital transformation focusing on productivity, not progressive innovation, report finds

A new report has revealed that as the mining industry becomes more and more digitally mature, it has achieved so at the expense of progressive innovation.

In the report, Digital mining: the next wave of business transformation, EY examines whether riding the digital wave is key to wiping out competition in the mining industry?

Digitisation and digital effectiveness was identified as one of the top 10 business risks facing the mining sector and this latest report reveals that in the quest to be more digitally innovative miners are looking more at productivity, which is proving ineffective in boosting competitiveness.

To this end, mining companies must adopt a more “cohesive, end-to-end approach” to integrate digital initiatives.

Paul Mitchell, EY Global Mining & Metals Advisory Leader, says:

“Mining and metals continues to lag other sectors in the realm of digital effectiveness. The value from digital will only be realized when companies change how they work, rather than succumbing to the lure of individual technology programs and pursuing local optimization, which is not necessarily transformational. While a revolutionary approach to digital would be too disruptive, we believe mining companies should adopt a progressive, multiyear strategy that also accounts for business risk and the primary drivers of value.”


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EY has found that introducing a series of digital transformation waves will prove to be key in transitioning a business from current to future state.  This approach is structured around four key components:

• Digital pre-start: building out connectivity to prepare for digital transformation, which typically involves investment in infrastructure, communications and data.
• Wave 1: activities that focus on the productivity or performance improvement agenda, and are typically operated within a single function. At this stage, digital can enable a mining operation to manage inherent variability and move toward manufacturing levels of productivity.
• Wave 2: these activities are broader and span the whole value chain and include initiatives to better manage margin through interactions with customers and suppliers.
• Wave 3: this stage refers to the rise of disruptive factors that may create significant changes in how the sector operates and may require a step change in business strategy

Read the full report at https://www.ey.com/gl/en/industries/mining---metals/ey-digital-in-mining-and-metals