I have worked as a CIO in a number of industries and each has their peculiarities. One segment where the CIO has to be particularly nimble is in the mining sector. There are a few top tips that I have learned from working for a contract miner, producing ore from working mines.
I’ll try to frame up the key requirements in this industry
1. The mining industry is cyclical and when it is hot, it is hot. They need solutions quickly and run high profit margins in the good times. As the cycle turns there is a focus on cost control. In many cases IT is delivering projects late in the cycle and appears out of step with reality.
2. The equipment used in the mines has become technologically complex. There are management systems on the trucks, the crushers have IT components and there are a myriad of complex systems such as slope stability monitoring. The vast majority of this equipment is purchased without IT involvement, but these days most of the systems connect to the internet via the corporate LAN.
3. Many in the mining workforce are engineers or technicians and technologically literate. They often source their own technology solutions and have the skills to make them effective in the workplace. Examples are collaboration systems and mobile enabled ordering systems. These are nearly always disconnected from the corporate IT systems.
As CIO, I was keen to get onto the front foot with these issues. I wanted to understand why the IT department could not deliver the solutions as quickly and cheaply as business units buying it themselves. I succeeded in providing solutions quickly, cheaply and properly supported (my perspective), but I don’t think I won the business over for the following reasons:
1. Acceptance of risk. The business had a higher tolerance of risk than that practiced in IT. When the business implemented their own technology there was no business continuity planning, security was dealt with in a superficial manner and there was often a complete loss of capability when a key staff member left (key man risk). The truth was that these systems would fail, but as different systems were used on different sites the impact would not be catastrophic.
2. Opaque costing. The actual costs of these systems were not well understood. There was no aggregated cost (as you would find in an IT budget) and the costs were often wrapped into other high value contracts. The costs benefits were calculated simplistically by referring to the punitive expenses of having plant not working.
3. Inconsistent expectations. Business provided solutions would fail and they often had poor maintenance arrangements. The business was surprisingly accepting of these issues (given the costs of down time) and much more accepting than for corporate provided IT systems. I put the inconsistency down to the extra control that the business had over the issue. They would deal directly with the supplier and often leverage a relationship to accelerate resolution.
So here are my 3 top tips for success (or at least avoiding disaster)
1. Know when to get out of the way – you may not have the capability or resources to deliver. Ensure that you engage the key stakeholders in this decision.
2. Map the risk – ensure that you have a holistic view of technology risk, not just IT risk. The Audit and Risk committee should be thankful for such a perspective.
3. Be excellent at project management – if you are providing solutions apply a professional, agile project management technique. Good people, a strong methodology and business involvement is a recipe for success.
What are your experiences with IT and the mining industry?