There are many paths to Enlightenment (the Stairway to Heaven)
We're starting to see the more widespread use of maturity models for designing the “Network Centric Next Generation Smart Mine of the Future”. Maturity models have been in common use in mining for specific applications, such as for business improvement, maintenance assessment and IT service delivery. These models are usually focussed on process maturity. That is, by measuring different aspects of the quality of business processes (e.g. governance, QA, documentation, deployment) you can develop a set of stages of progression that can be used as benchmarks and planning targets (roadmaps).
It is widespread practice across many industries to use 5 levels of maturity in these
models, labelled Level 1 (eg. ad hoc) to Level 5 (world’s best practice). Some models have a Level 0 so that Level 1 is
actually a basic improvement on a complete lack of process maturity, although
this often just adds an additional level for only a minor benefit.
Maturity
models have been applied to data and information management to illustrate
the progression of management and analysis practices as the digital technology
improves. For example: https://www.linkedin.com/pulse/digital-systems-maturity-model-geoffrey-moore
In the Network Centric Mine view of a mining business
(Farrelly et al, 2012), a better basis for operational maturity is to focus on
both the amount and quality of collaboration across the value chain, including up
and down the levels of decision-making.
This collaboration is both within a company and extending to strategic
partners who are integral to the operation.
Different industries have achieved different levels of maturity on this
scale, as follows.
Mining
companies rate low on this maturity model, and while some mines have made gains
in moving from Level 1 to Level 2 by integrating across their operation, they
have not jumped the “wall of integrated collaboration” due to:
·
Common
use of manual processes for data collection and reporting and the use of spreadsheets
for analysis and planning, even though some areas such as mine planning use
advanced applications.
·
Many
are still focusing on functional or operational efficiency, as evidenced by the
use of organisational groups such as “Operational Excellence” and “Technical
Services”.
·
Collaboration
rarely extends beyond site-wide integration, and even then there are often deep
silos between mining, processing and maintenance departments at many
operations.
·
End-to-end
processes that are optimised across multiple functional boundaries are the
exception, not the norm.
·
Little
evidence of true partner collaboration with external agencies - e.g. there are
usually well-defined contractual hand-offs at business process boundaries between
mining companies and their partners (e.g. drilling contractors, contract miners
and transport providers).
The mining industry is, however, showing signs of widespread progress up these levels and the leading operations in many major mining companies are driving improvements in collaboration by implementing new technology to speed up the core mining processes. These technology improvements are opening up different business models, for example:
·
End
to end systems integration, which challenges the traditional methods of
separating data between maintenance and operations functions.
·
The
use of remote operations centres, which challenge the traditional methods of
separating on-site and off-site functions.
·
The
use of autonomous systems, which challenge the traditional roles of operators
and supervisors.
·
The
use of virtual collaboration technology, particularly video conferencing and information
sharing tools, which challenge the traditional methods of separating in-house and
external services.
The majority of mining companies are still focused on operational efficiency and integrating across the value chain – hence levels 1 and 2. Innovators have jumped over the “wall of internal collaboration”, which requires significant changes to the operating model, in particular in the way in which they embrace new roles and responsibilities for collaborative working and strategic partnerships.
Maturity Model Progression
The collaborative maturity model design takes the extent and scope of collaboration as the main focus for maturity progression. Ascending the maturity stairway requires new collaborative business models that give rise to better (more mature) levels of collaboration.These maturity models are useful only when the characteristics of each level are clearly described and can be used to develop plans and roadmaps to increase the levels of maturity.
The industry that has demonstrated the most progress over the last 20 years in raising their level of maturity through the implementation of different operating models has been the transport and logistics industry, particularly that servicing aerospace and defence clients. When 300 companies from a mixture of industries were surveyed in detail to assess their level of supply chain maturity (Poirier 2004), the major factor differentiating levels of maturity was found to be collaboration across the value chain based on the level of ‘connectedness’ of business processes and people within a business, and between a business and its suppliers and customers.
This collaborative supply chain maturity model has been adapted (Farrelly and Records, 2007) to suit the multi-site and federated nature of a mining enterprise, and it forms an overall framework for the development of more detailed maturity models for specific purposes.
Level 1 is characterised as a focus on excellence
at the business function level (e.g. mine planning, development, production,
maintenance). Collaboration is mainly
within functions or disciplines and there is little to no sharing of best
practices.
Level 2 describes a focus on integration across a
site; that is, a considered approach to collaboration across functional areas
working together for a particular mining operation.
Level 3 describes an operation that closely
collaborates with some external service providers and multiple sites along the
value chain (mine sites, process sites, ports, etc) at a level deeper than
simply contracting goods and services.
This might include shared key performance indicators (KPIs), best
practices and integration of business processes.
Level 4 extends this idea with even deeper
collaboration with many core processes entirely outsourced on a success basis
and coordination is embedded
across all participating organisations.
Level
5 represents seamless integration of business process up and down the value
chain, open books on financials, free flow of performance data, and shared
responsibility for the end-to-end supply chain.
The entire operation is run as a coordinated series of services where
the boundaries of the individual companies are not apparent and shared
performance targets and measurements drive optimisation across all components
of the business. This would represent
the fully Network Centric Mine.
An important practical observation from many
different industries is that while advancing from level one to two is
relatively easy, since a company or mine site can do it on their own, advancing
to three is the most difficult because many old ideas and paradigms need to be
abandoned and business models rebuilt.
Longstanding cultural imperatives become serious obstacles,
as most businesses are very reluctant to abandon practices that were helpful in
the past but may not have stood the test of changing times. Most importantly, businesses need to
collaborate with internal and external suppliers in new ways.
This is the move from “master-slave” relationships to “win-win” partnerships. Difficulties in implementing such changes are to be expected, and require intense management focus to ensure this step is successful. Further advancement, while still challenging, is no longer such a leap in the dark.
This is the move from “master-slave” relationships to “win-win” partnerships. Difficulties in implementing such changes are to be expected, and require intense management focus to ensure this step is successful. Further advancement, while still challenging, is no longer such a leap in the dark.
A further observation is that companies taking on
change programs often attempt to take one aspect of the business forward but
not others. This is often true with the
implementation of new technology. These
programs usually fail because moving one area to high levels of maturity while
ignoring other areas (e.g. skills development, organisational culture, and
business process) heightens the implementation risk. This almost always results in the actual
business value of the change falling far below what was expected in the
original business case.
The way to build an implementation roadmap that
maintains balance in these dimensions is to base it on a well-constructed
maturity model. The model is used to plan the transformation program and to measure
progress across all the relevant components and dimensions.
In addition to designing a higher performing business, this maturity model can be also used by a company to assess its current situation in relation to its peers and its collaborators. If a company is less mature than its peers, or one business function is less mature than another, then the entire business is likely to be operating at a lower level of performance than it could be. Any mismatch between the maturity of operation of any part of the network of partners also leads to inefficiencies and poor information exchange at the boundaries. The network is only as good as its weakest link.
In addition to designing a higher performing business, this maturity model can be also used by a company to assess its current situation in relation to its peers and its collaborators. If a company is less mature than its peers, or one business function is less mature than another, then the entire business is likely to be operating at a lower level of performance than it could be. Any mismatch between the maturity of operation of any part of the network of partners also leads to inefficiencies and poor information exchange at the boundaries. The network is only as good as its weakest link.
Dimensions of maturity
For practical application, a maturity model needs to be divided into components or dimensions that can be assessed in an objective way. These dimensions need to be mutually exclusive and collectively exhaustive, and for the Network Centric Mine, this works best when the dimensions cover the whole organisational system namely: People, Process, Technology, Information and Culture.
Each of these five dimensions needs to be
understood separately as well as holistically to reduce the risk of
implementation failure. Each dimension
needs to progress up the maturity scale in a consistent and balanced manner
over time, and by degrees achieve the desired characteristics listed as dot
points in the following.
People
One
of the most common reasons that system implementations fail is due to
inadequate consideration of the people aspects of the system. Any change in process required for the
successful operation of any new system usually requires changes to roles and
responsibilities of staff for both managing and using the system. Staff buy-in and acceptance of the need of a
new system and their involvement in the implementation from start to finish
goes a long way to making sure that they use it and that the value is delivered
from it. Furthermore, it is very common
for training in a new system to be inadequate and not be extended to new hires
in the future. While this is a complex
area, there are many well-established ways to ensure that the people issues are
well handled, often as part of the company capability development and training
programs.
Process
Often
the implementation of a new IT system allows for the improvement and
streamlining of the existing business processes, however it is often difficult
to make wholesale changes in process except by stages. Recommended improvements to processes need to
align with experience of good practice elsewhere as well as take advantage of
any initiatives for standardising processes across the company. New processes also need to account for the
capability of available IT systems, and one system less capable than another
may in fact deliver the desired improvement for a lower cost due to the
business process being more easily adapted.
A common mistake in any system implementation is to try to adapt the
system to existing manual processes. Alternatively, any new off-the-shelf system would
probably be resisted as not representing “how we do things around here”. A re-design of the process is usually necessary for success. Any company adopting Lean-SixSigma
methodologies will also be using a well-defined process maturity model for
process re-engineering.
Technology
All
IT aspects of the system and its environment (software, hardware and
communications) are covered by the term Technology. The existing or planned technology
environment will place constraints on any proposed new IT system. Early phase works must identify these
constraints and also identify any opportunities that the new technology will
permit. Often, the installed hardware
and software is out-dated and highly disjointed (poorly integrated) and they end up controlling
business activity rather than supporting it.
Most mining companies now
have very well developed IT project methodologies and experienced suppliers to
conduct technology implementation and support.
Well-developed and benchmarked maturity models exist for this dimension,
such as the Capability Maturity Model (CMM).
Information
The
Information dimension incorporates all aspects of data and information
collected and processed, including what comes into the system and what leaves
the system. The requirements for the
information and reporting to support the desired business processes are key to
the identification of business benefits, and key to the selection of the
application that will be used. Other
considerations are the constraints imposed by other related business systems
into which and proposed new systems will interface. Early phase works for any new systems need to
identify all of these issues. For most
mines, there are islands of information in stand-alone systems that are often only
shared via paper reports. Rekeying of
data between systems is therefore common, which means that there are often many
inaccurate records. A clean-up of the
existing information workflow is invariably needed for any new system
implementation. New data integration and
delivery systems are now leading to new approaches to the maturity stages, for
example: https://www.linkedin.com/pulse/digital-systems-maturity-model-geoffrey-moore
Culture
The fifth dimension in this model, ‘Culture’, is the knot that ties all the other dimensions together. Corporate culture distinguishes the ways that different companies and industry segments combine the other dimensions to solve the same problem. It is the culture that determines the relative focus of the other four areas: people, process, information and technology. It is also the hardest dimension to understand and the hardest to change. The culture of any business is the main source of both opportunity and risk in making any technology enabled business change. The way an organisation is structured, its norms of communication and its work practices are all tied up in the potential success or failure of a business change. For many mining operations, there is a culture of acceptance of issues, complacency, long standing work practices and corporate inertia points which make any change initiative difficult.Building the Maturity Model
In practice, maturity models are best constructed each time for the specific scope of effort, and in a mining application they should be focussed on just the first three levels of maturity, since most mining companies will be at maturity level 1 for most dimensions of each component.
Mining companies
usually rate low on any collaborative maturity model (Farrelly et al, 2012), and while some mines have
made gains in moving from Level 1 to Level 2 by integrating across their
operation, they have not jumped the “wall of integrated collaboration” in
Figure 1, due to:
·
Common
use of manual processes for data collection and reporting and the use of
spreadsheets for analysis and planning.
·
Focus
on functional or operational efficiency, as evidenced by the use of
organisational groups such as “Operational Excellence” and “Technical
Services”.
·
Collaboration
rarely extends beyond site-wide integration, and even then there are often deep
silos between mining, processing and maintenance departments at many
operations.
·
End-to-end
processes that are optimised across multiple functional boundaries are the
exception, not the norm.
·
Little
evidence of true partner collaboration with external agencies - e.g. there are
usually well-defined contractual hand-offs at business process boundaries
between mining companies and their partners (e.g. drilling contractors,
contract miners and transport providers).
·
Miners
like to tell stories of heroic actions and services augmented to overcome
problems in supply chain, rather than smooth, efficient processes.
So rather than building a 5 level maturity model based on comparisons with other industries, we believe it is more useful to rescale the model to cover the range up to and including best practice for the local industry. That is, what may rank as level 3 on a generic maturity model (compared to world’s best practice) becomes level 5 on the localised version. This allows the current practices to be assessed over multiple levels and guidance given in more finely calibrated levels. The higher levels must be achievable if they are to be useful as guidance.
Transformation Planning
The key to progressing down
the path to the Network Centric Mine is the development of an innovation
program to implement a series of transformational changes. These changes will each have a real impact
on the business bottom line, and their development and implementation needs to
be sequenced to ensure business buy-in and business success at each stage.
A balanced program to any
business transformation can be defined by the interplay of five distinct
dimensions: People, Process, Information, Technology and Culture. Using these dimensions, each part of the
program can be progressed through a series of maturity stages that increases
the degree of networking in each of the five dimensions.
The way to build a roadmap
that maintains balance is to base it on a well-constructed maturity model,
which is used to plan the transformation program and to measure progress in all
the relevant components and dimensions.
This includes incorporating the outcomes of other programs being
implemented in parallel, for example a major digital transformation program
happening across the enterprise.
For each project in the
program, each maturity level needs to be defined across each of the five
dimensions. These definitions are then
used to define the levels of maturity in each of the key components of the
Network Centric Mine. The various models
combine in a 3D matrix, for example for a program of 7 projects:
Increasingly, mining companies will
collaborate closely with partner organisations to create and operate this new
network centric business environment. The mining companies and their
partners will evolve appropriate technologies, business processes and
organisational structures to allow them to operate as extended virtual enterprises
at a higher level of technology and process maturity.
Experience teaches us that the technology changes enabling this transformation will only be successful if they are part of a well designed business innovation program and undertaken together with synchronised changes to people, process, information and culture.
The transition to the Network Centric Mine will be made by progressive mining
companies partnering with equally progressive partners, who will transcend the
traditional client-supplier relationship to create new enterprises that simply
out-compete their competition with increased agility, higher productivity,
lower operating costs, improved safety, reduced environmental impacts and
better community relations.
References
Farrelly, C T,
Malherbe, G, Gonzalez, J, Bassan, J and Franklin, D C, 2012. The Network Centric Mine, in Proceedings International Mine Management
2012 Conference, pp 143-160 (The Australasian Institute of Mining and
Metallurgy: Melbourne).
Farrelly, C T and
Records, L R, 2007, Remote Operations Centres – Lessons from other industries,
in Proceedings 2007 Australian Mining
Technology Conference, pp 105-110 (CRC Mining: Brisbane).
Poirier, C C, 2004. Using Models to Improve the Supply Chain,
275 p (St. Lucie Press: Boca Raton).