Risk management in mining needs robust data management

It’s no secret mining and metals companies are facing new risks as the market adjusts to dynamic pressures. A 2016 Ernst & Young (EY) report shows a fresh risk profile for the global industry. It clearly states the need to be productive and innovative.  Managing cash remains a risk, as seen in previous years.

Sustainable business practices have been highlighted as critical for survival in the recently released annual report Top 10 business risks facing mining and metals, 2016–2017 from EY.

While the industry takes hit after hit with sustained low commodity prices, it has to polish daily business practices and improve information flows and internal processes.

acQuire is working through these challenges shoulder to shoulder with the industry on the downward slide.  We’re also helping companies face risks with solutions to help them be more productive, maintain knowledge in the face of cash optimisation pressures, and innovate to maintain a strong position.

How does that happen? acQuire’s company culture is designed specifically to see us through lean times and it also helps customers who use the GIM Suite do the same. As a market leader in GIM (geoscientific information management), acQuire reinvests 25 per cent of our revenue back into research and development, which helps us deliver a robust GIM Solution. Because we continually invest in product development even during a down cycle, our software is ready when the next boom arrives.

acQuire, through our GIM Solution, helps mitigate some of the risks facing the minerals and metals sector today.

In essence, it’s about making the right decisions faster at the crucial moments in a company. GIM looks at management of the information used for the quality control and assurance of original geoscientific observations and measurements. Having confidence in your geoscientific data and having the connectivity with your systems to model and interpret it allows you to make decisions faster, ultimately impacting overall business performance.

Compared to the top 10 risks facing minerals and exploration companies in 2008, at the top of the supercycle, the new risks paint a totally different picture for the industry. In 2008, the risks were linked with the need to grow quickly, with lack of access to talent sitting at number one. That risk doesn’t feature at all this year as companies seek to align with the productivity improvement agenda by promoting employees internally.

Connected systems are vital

Connectivity and transparency are two underpinning factors in a company’s ability to operate sustainably. Reducing costs across the company without loss of value is a key point of the EY report. This is achieved when connected systems working with other software create a seamless and transparent system.

The software connectivity we have developed with other vendors allows our customers to have an end-to-end solution. By having a focus on interoperability as part of our DNA, we are a catalyst for innovation and information sharing. It allows our customers to maintain IP within the organisation and build value from it. We’re not the only part of the chain and we don’t try to be.

An underground mining customer is a good example of how our software connects and “plays well” with other systems. They use our technology to collect data in the field and visualise it in the office in real time.  They’re able to make informed decisions as to how they mine, affecting overall quality of ore going to the mill. It increases not only the efficiency of the mine, but also the confidence in the data they interpret.

When our customers trust their data, it allows for a seamless process. It is becoming critical for operations to work in real time and make faster and better decisions. Software connectivity is one step towards greater collaboration within the industry.

Cash flow key to sustainability

Sustainable operation is the common theme throughout the Ernst & Young report Cash optimisation is named as the top risk but wasn’t even on the risk list last year. Scarcity of credit makes the problem worse because companies need to maintain a liquid balance sheet and maintain cash flow.

Impacts on cash flow were also a key topic at conferences in Australia earlier this year. Keynote speakers at the International Mine Management Conference discussed how improvements in processes and new innovations can directly impact cash flow. We believe better utilisation of geoscientific data is a big part of that. Being able to access your data and then make decisions in real time based on accurate data helps the final economic purpose. It makes sense that leveraging data assets is a first step towards greater profitability.

Productivity and connectivity go hand-in-hand

Productivity remains a primary operational challenge in the mining and metals sector, with many still struggling to make an impact. Companies focused on growth at any cost during the boom are now saddled with siloed businesses and diminished connectivity within operations. It is hard to overstate the productivity impacts that disconnected systems have on a team.

When different teams see different data – and there is not an overall, up-to-date view of progress and priorities – it prevents teams from finding errors and having time to address or correct them. Siloed teams also tend to focus only on their part of the process rather than the overall objective. Crucial process improvement opportunities are missed because of a lack of overall visibility.

Using a down cycle to gain competitive advantage

Productivity and innovation are risks that always need to be managed, but in a down cycle it is even more important because a hidden risk exists. During cash optimisation or minimisation you often lose resources –your IP and people.

We have the advantage with our technology. By using a standardised data model, and software which is configurable not customised, it’s easy for people who are trained in using acQuire technology to come in and pick up when someone has left the company.

Customers are also looking to reduce the number of software vendors they work with and are increasingly looking for those that can work well with other systems.

As we enter a new part of the economic cycle, companies need to streamline their processes, building the foundations to set themselves up for the next boom. Now is the time to bring rigour and resilience to the way data is managed, and those companies that do will see it play out in the risk areas highlighted above.

acQuire’s approach to connected systems that maintain data correctly and allow the right people to access it at the right time means businesses will be able to make timely decisions that ultimately impact their future.