5 Ways ERP Brings Value During the Mining Industry Development and Construction Phase
More than four out of five mining projects come in late and over budget—and not just a bit over budget—an average of 43% over. That’s a sobering statistic, and one we know you want to defy. As your mining operation moves into the Development and Construction phase, what are the challenges you’re facing and what is the best strategy to overcome them? In our continuing series covering the five phases of the mining cycle, we’re highlighting how technology— specifically a Mining Enterprise Resource Planning (ERP)—can address the challenges you’re facing, building value along the way.
The state of Development and Construction
If a mining project makes it past the exciting Exploration phase and lengthy Assessment phase, it enters the Development and Construction phase—a critical a stage in a mine’s life cycle that often determines how sustainable the Operational phase will be. By most accounts, construction and development within the mining industry is going strong, with continuing investments globally. Closer to home, there are numerous new mine developments in Canada, with construction underway in nearly every province. Similarly, Latin America is in the midst of a mining boom, where an extensive pipeline of development projects is fueling future growth in the industry.
The right technology for the Development and Construction phase
The Development and Construction phase is a busy one, requiring extensive pre-development planning and budgeting, detailed cost tracking and extensive materials procurement. This phase is also highly labor intensive, often requiring a mining company to hire and train a large number of new workers. To keep the project moving forward, mining companies are wise to leverage technology in the form of a Mining ERP solution to provide them with real-time project costing data, visibility into spending, and recruiting and retention tools—all while ensuring budgets are respected.
Below, we’ve identified five of the most important ways a Mining ERP solution builds value during the vital Development and Construction phase.
- Construction project cost control
During the Development and Construction phase, you’re not just a mining company, you’re also a construction company. From accurate estimating, through tracking the myriad costs associated with your project, to ensuring change orders are properly accounted for, the complexities associated with construction projects requires specialized functionality from your ERP. Mining ERP applications include the project costing capabilities needed to manage even complex construction projects.
- Project budget management
In order to keep stakeholders satisfied and your projects healthy for the long term, you’ll need to keep close tabs on your budget. A Mining ERP application provides the functionality needed to track and compare commitments and actual costs to your estimates and budgets ensuring you remain in control of the process throughout the project’s lifecycle.
- Procurement and contract management functionality
The Development and Construction phase is cost and resource intensive. You’ll be purchasing materials to support the project and must be able to efficiently and effectively manage the procurement process. Look for a Mining ERP that provides sophisticated procurement functionality with embedded workflows and an approval process configurable to your organization’s structure.
Recruiting, payroll and human resource management
A recent PwC survey of mining sector CEOs found that the availability of key skills is seen as a top threat to growth. More than half of CEOs believe they can’t innovate effectively as a result of that skills gap. Canada’s Mining Industry Human Resources Council forecasts 87,830 workers will have to be hired over the next decade. Your most concerted hiring efforts will take place during the Development and Construction phase, as more boots are required on the project site and in the office. And those boots may be hard to find without a concerted recruiting effort—including a dedicated human resource management solution (HRMS) that works in concert with your Mining ERP.
- Business insights
Remember our sobering statistic in the opening of this article about the majority of mining projects coming in late and over budget? One reason cited for this poor performance is that management did not act quickly enough to make a difference. Intuitively we know it’s true, and the data backs it up: when you have real-time access to quality business data, you’re capable of making better and faster decisions for the benefit of your business. Robust business reporting capabilities are valuable for every organization, but for companies within the mining industry where the stakes are so high, this type of insight is imperative. Your mining ERP should be capable of delivering the business insights your team needs to remain out in front.
Build on a strong financial platform
As your mining organization moves into the Development and Construction phase, you’ll face new challenges and opportunities. A Mining ERP application can help you overcome the challenges and capitalize on the opportunities. Caron Mining Solutions is a comprehensive, powerful and easy-to-use mining industry ERP solution, built on Sage ERP software, that addresses the challenges modern mining operations face. Learn more about Caron Mining Solutions here, or by contacting us here.