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Resources CIOs in Australia

Resources CIOs in Australia

Australia's resources industry is booming and the pressure is on CIOs to deliver

Rio Tinto: Rapid expansion

As any CIO can tell you, managing costs in a high performance distributed environment is already a tough job. What makes the current major capital project environment in the resources sector so challenging is the introduction of fast cycle times for multiple, large projects.

“In the normal state of play, resources CIOs are focused on costs and very shrewd about the use of technology for cost reduction, but then the boom came along and added the new elements of speed and completeness,” Haake says.

Rio Tinto’s Davidson knows only too well the type of pressures resource industry CIOs face. Davidson is in charge of the IT strategy of the resource giant’s iron ore division, the world’s second-largest iron producer, and has operational accountability for 13,000 users in the company’s Western Australia business alone. “In my role as CIO, I seek to keep the core aspects of operational IT on a solid foundation, support the business strategy, and find the balance between centralised operations and local control,” Davidson says.

Read the full interview with Rio Tinto's Rohan Davidson.

According to Davidson, Rio Tinto’s planned expansion activities will result in many new mines, which will be supported by consolidating operational control and extending automation initiatives. “Our growth is heavily dependent on a deployment of a standardised communications infrastructure, and a consolidation and upgrade of a legacy technical application layer that manages our tonnes, time and quality information,” Davidson says.

“We have about 150 IT projects underway and where our growth projects do have a dependency on these projects, strong governance and support is provided to these initiatives,” Davidson says.

“One of the more complex aspects of my role is to keep pet projects off the slate to provide oxygen for those that are business critical.”

Davidson stays on top of the multitude of projects with the help of a team of staff dedicated to ensuring projects deliver to their mandate and that dependencies are understood.

“Supporting our business strategy requires my team to identify the key dependencies between our growth projects and our IT systems and strategies, to ensure these dependencies are fully understood and communicated — and to ensure our expansion is not constrained by our ability to deliver technology outcomes,” he says.

Faced with such rapid expansion, Davidson says staying ahead of construction is a critical challenge that must be met. “Project teams have a habit of delivering their own solutions where none already exist, so we seek to engage early and comprehensively with any initiative that features technology,” he says.

Another challenge: Establishing effective communications, often in remote locales. In 2009, Rio Tinto established an Operations Centre in Perth, consolidating control of its mine, port, rail and utilities infrastructure into a single room, which Davidson describes as “the first of its kind in the mining industry”.

“With the commission of our Operations Centre, communications infrastructure became a piece of critical infrastructure in a way that had not been in the past,” Davidson says.

“Commission of our Operations Centre required a significant uplift in the resiliency and redundancy of our communications network, which was a complex endeavour given the remoteness of the Pilbara operations. Now we have the Operations Centre in a steady state, the next level of maturity for our business will be to leverage the benefit of having so many operational roles in one location to make better decisions on sequencing, de-bottlenecking and incident response.”

Fortescue: Innovation culture

There are a myriad of strategies for effective IT operations within the resources sector. Some companies opt to handle all their IT in house, some use large partners and outsource it all while others, like Rio Tinto, operate a hybrid infrastructure. But no matter the approach, all resources companies believe they are following the strategy that best ensures the on schedule, to specification, performance of IT as a fundamental enabler of the whole project — not just a standalone IT project. For many companies, this pressure to deliver projects on time and to spec creates an atmosphere of intense innovation. When every lost day costs millions in dollar value and lost opportunities, devising new approaches becomes of paramount importance.

“In a growth scenario, IT finally loses its shackles and is allowed to propose really dramatic things,” says IBM’s Haake. “From an historical point of view, doing these massive projects in a new way really breaks a lot of glass.”

Fortescue’s Forte says it was precisely the company’s culture of innovation that attracted him to the role of CIO in the first place. According to the CIO, Fortescue’s culture prizes innovation above all and encourages smart and talented people to question traditional methods and propose new ways of doing things — even if they don’t always work.

“For us, nothing is off the table,” Forte says. “We don’t go into anything with a view that we’re going to do it in a traditional style.”

Forte’s signature reads simply: “Culture eats strategy for breakfast”

Delivering operational efficiencies with the help of technology is always good, Forte says, but he gets a “bigger bang for the buck” from fostering innovative thinking among the IT team.

“We often underestimate the value that good, experienced technology people bring in terms of asking odd questions,” he says.

“There are things that people take for granted, and sometimes you have to stand back and ask: Why have we always done it that way? Is there an operational reason that we need to see 50 things on a screen? Can we use exception reporting and threshold management and those sorts of things, which have been standard practice in IT for many years?”

At the bottom of his emails, Forte’s signature reads simply: “Culture eats strategy for breakfast”. It’s no mere whimsy — the slogan underpins Forte’s every move as CIO. “It is absolutely true,” he says. “Irrespective of how big and how fancy your strategies are, the ability to execute and the ability of your people to achieve outcomes is the most important thing.”

As an example, Forte recounts his dealings with vendor representatives, who often come into his office expecting to encounter a conservative mindset. “I tell them upfront: Do not think you have to come in here and think conservative, risk averse and all the rest of it,” he says.

“I say: We do not have an environment here where people aren’t prepared to change. People here are clamouring for change and improvement — do not let yourself become the barrier.”

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