A digital disruption is taking place in every major industry, including mining. The Internet of Things (IoT) is rebalancing the traditional notions of mining operations, maintenance and workforce into contemporary organizations with an improved understanding of actions from the pit, or underground, directly to management and office personnel. This digital disruption has moved from consumer-specific industries directly to mine operations and extractive organizations.
Despite this progression, many mine operators continue to be wary of full digitization. Concerns of adopting new digital tools, including cloud-based mining technologies, typically consist of the following:
1. Security of Proprietary Data
2. Advanced IT Infrastructure
3. Increased Budgets and CAPEX
4. Workforce Training and Resources
According to Deloitte’s “Tracking the trends: The top 10 trends mining companies will face in the coming year,” digitization of mine operations is a major trend of the year and beyond. Business models are being reconsidered, and competitive dynamics are being reshaped. With increased pressure on productivity and costs, miners are forced to creatively find digital solutions to produce value and cut structural waste.
A popular solution to reaching these new objectives is cloud-based services to collect and store data. The concept of cloud services has been made popular by consumer-faced businesses and simply means storing data and information on a remote service one can access with a simple Internet connection.
Most of us have already utilized cloud services. If you have watched video on Netflix or saved a file on Google Drive, you have direct experience with cloud computing. In both examples, a user is connecting to a remote server to engage with content housed there. These consumer based services are in what is considered the “public cloud” where everyone shares the same resources and security is not of utmost concern. Traditional industries, including mining and other extractive companies, continue to invest and manage systems in-house, in data centers they own, to retain control of their data and applications. Managing an in-house data center is fine for the larger mining operations, but mid and small size mine sites can’t afford the personnel and technology to stay up to date.
Cloud computing has revolutionized the way all industries collect and distribute data. And just like other industries utilizing cloud computing, there are many advantages for mining organizations in leveraging similar technologies.
To understand these benefits and risks; it is advantageous to address the primary concerns of cloud services before adoption and implementation. There are ways to get the advantages of cloud computing without going all the way to the public cloud.
Security of Proprietary Data
The mining industry has historically been slow to adopt and risk averse to modern digital trends. The thought that placing crucial data involving business operations on a server far away from operating grounds is certainly a large risk in the minds of many leaders. But to create any opportunity for hackers to obtain that information and use it against the business is of highest concern.
As the cloud allows mining organizations to develop new approaches to optimization and efficiency, the risk of cyber-attack will also increase. Cyber security concerns are real, but not full justification to abandon the advancement in cloud technologies. It simply means that data and I.T. security needs to be addressed at the same rate.
Public cloud sites such as Amazon Cloud or cloud or Netflix share resources as mentioned above and do come with a bit more risk. Some business applications are well suited to the cloud, such as email. But when it comes to operational information on your capital assets or accounting, more security is required. Fully-integrated private hosting systems with secure network access, are an excellent alternative to the public cloud. AddOns Inc. supports several remote mining sites with their private hosting solution which utilizes the most current standards in cyber-security technology to protect the data of their clients. These security features include but are not limited to intrusion protection systems, privately connected networks, and data encryption techniques usually unseen for in-house servers, and certainly not for public cloud services.
Privately hosted data servers are hosted remotely, away from operations, and are securely separated from other organizations. Hosting may seem less “cool” than the cloud, but private hosting solutions are secure and by definition provide the comfort of knowing where your data is stored. Another benefit of private hosting services is your disaster recovery capabilities are inherently improved. Your applications are not typically running within your company’s geographic region so therefore do not share the same natural disaster risks.
Most mines operate in very remote locations, outside of major cities or communities where Internet connectivity is typically an afterthought. Reliable Internet access is a necessity for any cloud-based system or private hosting solution.
The good news is that networks for mine sites are improving all the time. Even in the most remote places in Latin America, where operators would have never thought a strong internet connection was a possibility, are now adopting better I.T. solutions because of an improving infrastructure.
Adjusting to remotely hosted computing necessitates special attention to basic physical infrastructure and architecture of the mine site(s) as they relate specifically to the reliability of connectivity, backup, and disaster recovery. These fundamentals need careful consideration.
Budgets and CAPEX
Reducing operating costs and capital while improving productivity is a common focus throughout the mining industry. But continued cost cutting can only lead to diminishing returns. Seeking out and implementing new technologies improve efficiencies, boost productivity and decrease costs over time. Adopting appropriate enterprise systems with modern technology are required to stay competitive.
Previously, full-fledged implementations of enterprise systems for mining operations were massive capital expenditures. Big capital investments in mining enterprise software competed with equipment acquisitions and were viewed as high-risk decisions. ROI was hard to prove with a new Enterprise Asset Management (EAM) system, for example, when compared with a new hydraulic shovel. Companies and operators were expected to set up their own infrastructure, covering costs of server space, storage, data migration, cyber security, training, and of course perpetual license and annual software maintenance. By the time the decision was made to implement, and the systems were ready to operate, the technology advanced and upgrades were already needed.
With privately hosted solutions, such as ABB’s Ellipse being hosted by AddOns, mining companies can now implement quickly, pay as a monthly or annual subscription, receive continuous support, improvement, and upgrades without massive upfront costs. Switching to a privately hosted enterprise solution provides the same cost-reducing benefits of the Cloud, most notably the ability to decommission data centers and eliminate expensive recurring hardware upgrades.
In fact, implementation of an enterprise solution on a privately hosted environment with ongoing support from a trusted partner can practically negate all capital expenditures associated with building an on-premise I.T. infrastructure. Hence, mine operating expenses can be decreased by tens of thousands of dollars each month.
Behind every secure and reliable technology infrastructure, there is a team of I.T. professionals. These skilled employees are crucial to a mine’s digital assets, but they typically command a six figure salary, way too high for small to mid size operations to keep on staff.
When system upgrades come available and necessary, training can lead to additional expenses. Keeping your I.T. team current on systems workflow, administration of user id’s, and the ever-evolving security landscape requires constant vigilance, creating an additional layer of training and expense.
With third-party privately hosted solutions by a partner who knows your business and invests in the right expertise, you share expertise with similar companies and donâ€™t have to invest in the people or training necessary to stay on top of I.T. trends. Businesses, such as AddOns Inc. who have the right resources who know the mining business, offer enterprise system managers, security experts and I.T. teams who essentially cover these duties for you. This means mine operators see a decrease in I.T. labor, decreased implementation time, and overall improved business performance.
Digital transformation has huge benefits, but investing in your own infrastructure and skills to take advantage is cost prohibitive. Cloud is the latest buzzword, introduced by consumer applications like Netflix, but it is not secure enough for business-critical data.
Mining enterprise applications like Enterprise Asset Management require more security. Privately hosted solutions offer the same financial benefits of Cloud while avoiding the inherent risks of security with Cloud. As connectivity continues to advance at the same pace as the technology itself, storing your enterprise systems and data in remote privately hosted solutions can be a reality. Make sure your provider knows the mining business, however, or your remote mine workers will get frustrated when they call for support.