Top 5 observations from the SAP Mining and Metals Forum 2014
Quiz time – who knows what chemical element has the atomic number 110 and the symbol Ds? for sure I did not! But last week I found out because we held the SAP Mining and Metals Forum at a unique event location in Darmstadt, Germany with the same name as this chemical element – Darmstatdium. (check it out!)
Well that set the tone for a really interesting and insightful week of discussion with the who is who of the mining and metals industries.
Below are my: Top 5 observations from the SAP Mining and Metals Forum 2014
- Mining and Metals industries are using cloud to help move away from fixed costs – and get needed flexibility.
The message is clear – mining and metals companies are thinking about and actually figuring out the how cloud fits best in their IT plans. Many are starting with the horizontal applications like procurement and HR to “test the waters” but almost everyone I spoke to mentioned that they were either already doing projects on the cloud or were deep in the planning phase. One large mining company laid it out nicely – talking about how they are trying to move away from fixes costs as much as possible – and consume IT and other services as much as possible “as a service.” This will give them much more flexibility to expand and contract rapidly.
Several keynotes at the Forum featured customers talking about their strategic plans and all of them included the role of cloud. Klaus Hardy Muehleck, CIO of Global metals giant ThyssenKrupp discussed the company’s commitment to the cloud (link to replay) and their use of the Ariba Network for their global procure to pay process. Herve Legrand, CIO of ArcleorMittal Mining, (link to replay) talked about their use of cloud and HANA across their mines that is driving the ability to benchmark and improve processes.
2. Meat and Potatoes for dinner. Margins are king – companies want efficiency, cost cutting.
Call it meat and potatoes – it might be basic but that is what everyone is eating for dinner. Mining and metals industries are spending time on projects that can avoid costs and drive efficiency. SAP held its customer advisory councils before the Mining and Metals Forums and about 30 companies presented on their business challenges and strategic projects. Literally every company talked about efficiency, margins, cutting costs…. One of the largest mining companies talked about “an aggressive cost savings campaign.” A metals company’s key IT challenge: “Do more with less.” Below is a great slide presented at the Forum by ArcelorMittal Mining that shows the key focus for mining today.
3. Strategic shift? Is IT finally becoming more strategic to the business?
Mining and metals industries have been notoriously stingy about spending money on IT. Companies in natural resource industries spend on average just 1% on information technology compared to 5-7% for most industries. (source: http://venturebeat.com/2014/02/19/ibm-uses-big-data-to-prevent-mining-equipment-failures/).
Historically they have put more emphasis and perceived value on innovations in materials and assets for example. However talking with industry experts at the Forum I sense a major a shift. Companies like Goldcorp, Glencore and ThyssenKrupp see cloud and other efficiency drivers in IT as a key enabler to help them become more strategic to the business. Instead of spending time and effort worrying about servers and software upgrades – IT experts are standing next to their Line of Business colleagues in sales and planning – helping them to give solutions for how IT can fix a business issue.
4. Everyone is talking about mobility and the new User Experience
All the large mining companies mentioned mobility as a hot topic. Most have projects moving ahead to outfit both field workers and office workers to do their jobs remotely, on-line – reducing errors, making their jobs faster and easier. Plant Maintenance is one of the key use cases. Companies also talked about how critical the user interface is to training and actually getting people to use new systems. Global mining company MMG told fascinating stories of how they are training their workforce in Laos using pictograms as a way to help explain technologies and processes that for some workers are completely new. One company presented the slide below as to how to justify the focus on user interface and mobility.
5. Millenials have in important role to play in mining
Over the next decade, almost half the workforce in the mining industry is expected to retire. And many talk about the insufficient pipeline of new talent to replace lost skills. In part to help spread the word about how cool mining and metals industries are – SAP sponsored a Mining and Metals student blog contest on SCN – attracting 28 blog entries and garnering more than 17,000 views. The top 10 “liked” blogs were reviewed by a panel of SAP experts and the winning 2 winning students were sponsored by SAP to attend the Forum. Check out the entries and see the future of the industries!
sapmmforum, @SAPmillmining, @jenscholze, @sapindustries