Deloitte expects digitisation to transform the African mining sector

26 March 2018 Consultancy.africa

Commodity-based industries are not immune to digital disruption; according to a new report from global professional services firm Deloitte. The mining industry, in particular, is set to undergo changes in its operational structure, nature of work, and regulatory framework, and will face an entirely new set of threats, says the firm.

The digital age is upon us, ushered in through what Big Four accounting and advisory firm Deloitte describes in its new report as the fourth industrial revolution; the first being water and steam, the second being electricity, the third being the dawn of electronics, and the fourth being the integration of technology into every aspect of life.

Such is the scenario across the world, as Internet of Things (IoT) entrenches technology in our private life, while AI, FinTech, cloud, and a plethora of other advancements revolutionise the professional space. In the latter case, some sectors have been affected at a slower rate than others. 

Commodity-dependent sectors, for instance, which form the foundation for a number of African economies, are characterised by physical work, and have remained relatively immune to the dawn of software integration. According to Big Four firms PwC and Deloitte, this is set to change substantially. PwC recently published a study detailing the future role of innovation in the oil industry. Deloitte has now predicted the same for the mining sector with the advent of the “digital mine.”

Two major trends characterise economies across Africa at present; the digitalisation of its population, and the diversification of its economy. In order to survive such a scenario, the mining sector needs to modernise in tandem with the surrounding ecosystem, and use technological tools to push beyond its traditional infrastructure.

The cycle of continuous and periodic change

As mining companies begin this process, Deloitte, in a report that it presented at the World Economic Forum earlier this year, classifies the entire process of change into five broad categories. The first is the emergence of the digital mine, which entails new features such as “digitised geological information, outsourced identification of mineral deposits, autonomous mining equipment, real-time data capture and feedback, wearable devices for maintenance and operator safety, drones for inspection and monitoring, a mobile connected workforce,” just to name a few.

The process of introducing such a novel concept, however, needs to be an intensive and continuous one, according to the firm. In essence, digital methodology not only needs to be integrated into the mining process, but needs to become a driving principle for the management and decision-making process as well.

The second area of prominent change will be the “Future of Work” in the sector, which involves significant upgrades in safety measures to begin with, but will also shift the labour requirements of the industry. On the one hand, automation will threaten a large number of jobs in the sector, while on the other, digitisation will enhance flexibility in the process, enabling fairer working hours and better compensation.

Defining value beyond compliance

Regulatory policies represent the third broad area of change. The mining process has implications that stretch across various aspects of society, from environmental considerations, to labour rights, to ambiguous considerations of ownership. In this respect, the report recommends a ‘shared value’ approach to mining regulations, which entails the shift in priority from merely ensuring compliance to actually generating value for all stakeholders involved. 

Similar to the considerations about the future of work, the fourth area of change, i.e. the socio-economic impact, also revolves around the consequences of automation on jobs in the mining sector. Jobs will not only reduce, but will take on a new character altogether, which entails the requirement of skill-training both within the sector and outside of it for workers in need of rehabilitation.

Lastlly, the adoption of digital techniques brings with it the threats of the digital world. Although physical safety will be greatly enhanced, digital mines must now be weary of threats in the cyber realm, which are increasingly prolific across a variety of sectors.

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Market trends that are emerging in a post-digital African economy

15 April 2019 Consultancy.africa

The discourse is now moving to a post-digital world, where the differentiating factor among a sea of digitalised firms will become the capacity to deliver personalised services based on individual customer needs – among other things – according to a new report from global management consultancy Accenture.

Businesses in Africa have been navigating a period of rapid digitalisation recently. The continent is set to have as many as 1 billion internet connections over the next two years, which means that the population is set to be wired in. The business environment has been looking to capitalise on this digital market.

While the bigger firms have been quick to adopt digital technology within their operations, smaller businesses were initially weary due to the high costs involved in digital transformation. Nevertheless, a number of these firms are realising the value of digital integration, and Accenture is looking towards the next step.

As per a new report from the firm, most businesses are on their way to digitalisation, which is restoring a certain uniformity to the market. In this context, digitalisation is no longer the differentiating factor. Businesses must now focus on developing mechanisms for customer relationships, among other enhancements.

Market trends that are emerging in a post-digital African economy

The technology that will take centre stage in the new scenario includes distributed ledger technology, artificial intelligence, extended reality and quantum computing (DARQ). Such technologies allow firms to “reimagine entire industries”, as per the firm’s analysis, and nearly 90% of firms are already experimenting with such technology.

Another key trend that is emerging in the post-digital world is the need for cyber security. According to Accenture, cyber security is no longer an individual effort from companies, but must be a collaborative effort across all stakeholders in any given sector that has digitally integrated.

“Ecosystem-driven business connections increase companies’ exposure to risks. Leaders recognise that just as they collaborate with entire ecosystems to deliver best- in-class products, services, and experiences, security must join that e­ffort as well,” says the firm.

“Technology is creating a world of intensely customised and on demand experiences, and companies must reinvent their organisations to find and capture those opportunities as they come,” adds the firm, urging that meeting customer needs is now more about speed than about service.