June 201919 BY CHRISTIAAN HEYNING, VIVEK LATH, & GREG PEACOCKE, MCKINSEY & COMPANYIn the past, the metals and mining industry has eagerly embraced new technologies ­ bigger and more powerful machines ­ until it could literally move mountains. But today, many companies are struggling to get the value they expect from advanced technologies; especially, to scale up from isolated use cases to an integrated transformation (hence the label "pilot purgatory"). This is where CIOs need to play a critical role, leveraging both their experience in "new ways of working" and their technological expertise.Industry 4.0 ­ the umbrella for digital technologies that include advanced analytics, automation, machine learning and robotics ­ is already delivering significant savings and efficiencies to metals and mining operations. With ever-increasing data availability, more powerful computers, and the growth of connected devices, these technologies and their benefits are readily available to more companies.Yet, while most managers in Asia recognize the potential, companies have been slow to get the value. A recent McKinsey study of Asian operators found that about 80 percent of companies were aware of the new technologies, but of these, the vast majority ­ 85 percent ­ haven't moved past initial pilot programs. Indeed, the McKinsey Global Institute, regularly places metals and mining among the laggards in its Industry Digitization Index. Our research and experience suggest four challenges that prevent companies from escaping "pilot purgatory" and realize an integrated tech-enabled transformation:· How to construct a roadmap for implementation that combines business priorities with technology foundations and constraints· How to overcome implementation challenges once the technology works; for example, how to change truck-driver behavior to realize the potential savings suggested from a fuel analytics tool· How to build the host of required capabilities, from adoption training to data science and user interface design· How to have a technology environment that allows rapid development of new tools and functionality, but which also allows to scale and replicate across a wide businessOnly when these challenges are addressed using a structured approach can a company sustainably change. Failure to do so will result in (at best) one-off efforts that simply advance pilot programs.CIOs are crucial to overcome these challenges. Why? For two reasons: their experience and their expertise. Experience: technology ESCAPING FROM "PILOT PURGATORY": ROLE OF CIO IS ESSENTIAL TO SCALE UP TO A FULL TECH-ENABLED TRANSFORMATIONChristiaan HeyningCXO NSIGHTS
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