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Mining tackles corruption with analytics

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“The proliferation of technology over the past several years has been a huge boon to companies fighting corruption,” says business advisory firm BDO.

Mining companies are using cloud data analytics to turn the tide against corruption.

Like every other industry, the mining sector is undergoing rapid digital transformation as companies race to streamline their operations. Mining businesses are also approaching digital tech as a way to curb corruption and reduce their external dependencies.

To learn more about how anti-corruption initiatives are benefitting from digital transformation, DX Journal caught up with three leaders of BDO’s mining business:

  • Nina Gross, leader of BDO’s Global Forensics practice at BDO USA
  • Sean Bredin, national mining leader for BDO Canada
  • Jeff Harfenist, the co-leader of BDO’s Anti-Corruption practice

DX Journal: What are the top corruption-related challenges facing mining today, and how are companies approaching the risks?

BDO: Unfortunately, corruption continues to persist in mining today for many reasons.

The first has to do with location: Mining companies typically operate in very difficult regions and countries that are often more prone to corruption than others.

Then, there is the fact that the mining industry is not as heavily regulated as other natural resources sectors. In fact, mining regulations are quite decentralized.

Another main driver of corruption is the industry’s dependency on the government for mining licenses and approvals. Mining companies face exposure to many government touchpoints, which increases the risk of bribery and corruption.

To address these risks, mining companies are finding ways to improve transparency with their key stakeholders, and ensure compliance with global human rights and environmental standards. Many are also strengthening their anti-corruption compliance programs by hiring and training more people, improving processes and procedures, and enlisting the help of technology.

DX Journal: How has digital transformation helped to mitigate these challenges?

BDO: While new technologies have transformed every aspect of mining, major advancements in data analytics has revolutionized companies’ ability to detect and mitigate fraud and corruption risk.

By incorporating advanced analytics, artificial intelligence (AI), and the internet of things (IoT) into existing systems, mining companies have been able to build powerful business intelligence and enterprise resource planning platforms to help them improve their overall corporate governance and make smarter predictions.

The cloud has also made these technologies much more accessible. Whereas many organizations were unable or unwilling to use predicative analytics before — because it required too much computing power and was expensive — cloud solutions now let miners run tests for one or two months and pay just for the time used.

DX Journal: What are some examples of successful digital transformation efforts you have witnessed in mining?

BDO: One of our clients, Barrick Gold, recently underwent a companywide digital transformation initiative that touched on every aspect of its business — from its mining sites to its Toronto headquarters. To aid its efforts, the company partnered with technology and consulting companies, including Cisco and our team at BDO.

One of our main tasks was to help Barrick Gold improve the transparency of its investment data to maximize the value of its investment portfolio. To do this, we worked with the company’s Investment Management team to implement several reporting dashboards using tools like SQL and Microsoft PowerBI.

These dashboards are intended to be part of an investment-wide analytics hub designed to help employees benchmark the company’s internal and external investment projects, and to achieve greater efficiency, speed, and transparency in their overall tracking, reporting, analysis, and investment decision-making.

DX Journal: What should mining companies consider when implementing new technologies? Are there additional challenges to be aware of?

BDO: Mining companies looking to implement new technologies must be prepared to face many challenges and risks. Most notably, companies must be cautious not to over-rely on technology to solve every problem.
major reason why many IT projects fail is not due to a lack of technological tools, but a lack of subject matter experts who can work alongside IT vendors to design platforms that will get the desired results.

Technology can only take an organization so far. Companies must continually invest in hiring and training smart professionals so that they can optimize the systems in place.

There is also the challenge of systems integration. Any new technology introduced must integrate well with the company’s existing systems.

Finally, companies must ensure they have the proper cybersecurity and information governance frameworks in place to guard against potential cyberattacks and data breaches.

DX Journal: How can companies prepare themselves for emerging technologies, such as Industry 4.0, cloud and IoT?

BDO: Mining companies that want to take advantage of Industry 4.0 and the associated emerging technologies and applications (i.e. sensors, data analytics, the IoT, and AI) need to have a tailored action plan that clearly outlines the organization’s goals, stakeholders, and potential areas for failure.

As mentioned earlier, companies must also be extremely aware of cybersecurity, and the new security challenges that new technological systems, such as the IoT, bring.

As mining companies shift to connected operations, security must be embedded into products from design to distribution. An ideal cybersecurity program is one that focuses on proactive threat intelligence, detection, and rapid response.

DX Journal: What top corruption risks can mining companies expect to face in the next year, and how will technology help them respond?

BDO: Mining companies can expect to continue to face many of the same corruption risks they are facing today in the year ahead.

Political and administrative risks will continue to persist, as mining companies rely on government officials for mining license applications and approvals.

Nevertheless, the advancement and proliferation of technology over the past several years has been a huge boon to companies fighting corruption.

Advanced forensic data analytics can help organizations spot suspicious transactions, arising from anomalous data, as soon as they occur. It is expected that as the technology evolves, companies can use analytics not only to spot current anomalies, but envision potential problematic scenarios and act on predictive trends.

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Culture

Toronto makes the shortlist for Amazon’s HQ2, alongside 19 rivals

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Amazon has announced the shortlist of cities that could host its second North American headquarters, known as HQ2. The company received 238 proposals from locations across the region. It’s now narrowed the list to a total of 20 cities, including Toronto.

Technical talent

Toronto is the only location outside the U.S. to have made it to the shortlist. Amazon opened the application process last September, giving cities across North America the opportunity to support up to 50,000 high-paying jobs.

It will be a complete second headquarters for the company, providing extensive economic growth opportunities to the successful candidate city. Amazon will invest over $5 billion as it develops the facility.

Toronto is the only Canadian location to have made it to the shortlist. Canada is establishing itself as a leader in several areas of emerging technology, including artificial intelligence. Amazon is likely to have retained Toronto as an option because of the availability of technical talent around the city. The arrival of the company would further boost the already thriving Canadian tech scene.

Amazon’s original requirements for HQ2 stipulated it must be built near a metropolitan region of over one million people with availability of technical talent. The company also wished to have direct access to commuter transit and an airport not more than 45 minutes away. Toronto has evidently satisfied these first requirements but it will now be in competition with urban areas across the U.S.

“Enthusiasm and creativity”

The other 19 shortlisted cities are distributed across the U.S., including locations on the east and west coasts. Pennsylvania is the only state that features twice on the list, with both Philadelphia and Pittsburgh potential candidates. Across the country, cities including Atlanta, Austin, Boston, Chicago, Dallas, Denver, Los Angeles, Miami, New York City and two regions in the vicinity of Washington, DC have made it through the first stage of Amazon’s application process.

The company thanked all 238 initial applicants for their interest, saying they showed “tremendous enthusiasm.” It evaluated every proposal it received based on predefined criteria. Amazon will now work more closely with the 20 shortlisted cities to obtain detailed information on their proposals. It needs to establish whether the community can feasibly support the scale of its building and hiring ambitions.

“Thank you to all 238 communities that submitted proposals. Getting from 238 to 20 was very though – all the proposals showed tremendous enthusiasm and creativity,” said Holly Sullivan, Amazon Public Policy. “Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

Amazon’s currently headquartered in Seattle with regional satellite offices across the globe. The company employs over 540,000 people globally and has invested $100 billion in its infrastructure over the past five years. Amazon said it expects to conclude the competition to host HQ2 during 2018.

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Culture

Microsoft says we need to talk about AI values

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AI
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It’s time for guiding principles for AI, says Microsoft.

The company has called for the tech industry and governments to develop a consensus over the values and principles that will govern AI.

Principles and values

Microsoft has repeatedly explained its desire to create artificial intelligence that assists humans without having a negative impact. In its list of the Top Ten tech issues for 2018, the company reiterated its desire to base AI on “societal principles” that are followed by every participant in the field.

While many enterprise executives are already convinced by the possibilities that AI usage present, there are still major technical and ethical challenges to address, including the risk of bias, consumer rejection and irresponsibly developed applications.

Democratize AI

Microsoft said its ongoing work to “democratize AI” is already creating “building block” best practices for companies to follow. The company said a cross-industry effort, with input from lawmakers, needs to start now before AI gets entrenched in society.

“Over time we’re likely to see the emergence of a new generation of governmental policies, regulations and laws that will govern the development and use of artificial intelligence. But these are early days,” said Microsoft.

“Before that can happen, there needs to be some consensus about the values and principles that should govern AI, followed by best practices to implement them. Only then will it become clearer what types of regulations or laws make sense.”

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Investment

What SaaS-ification means for customer-business relationships

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Wes Durow
Photo courtesy Wes Durow
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Marc Andreessen once famously said that software is eating the world. And with the rise of cloud technology and software-as-a-service (SaaS) companies, it appears as though software might also be eating traditional revenue and service models of large enterprise companies.

“More and more of our customers are choosing to switch to a subscription model,” said Mitel Chief Marketing Officer, Wes Durow. “And in that world, response matters.”

A telecommunications company with customers in more than 100 countries, Mitel touts itself as one of the fastest-growing cloud communication providers. Speaking to DX Journal after the SaaS North conference in Ottawa, Durow said the move to cloud is changing how companies engage with customers, and businesses need to be aware of how customer relationships shift with the rise of as-a-service models.

“When you buy something every seven, eight or nine years, you’ll sign a longer contract and probably put up with some ups and downs,” said Durow. “But when you’re paying on a monthly basis for a service, you want short contracts, immediate response time, and a stream of new features pushed out to you as part of your subscription.”

Companies are quickly adopting as-a-service (aaS) offerings because of major cost savings and simplified integrations.

With cloud computing, for example, companies can dramatically reduce the physical footprint and cost required for in-house IT infrastructure. But when you engage a vendor and pay for services on a monthly or short-term basis, the nature of the business relationship can change as a result of many more touch points.

“The move toward Software as a Service or SaaS-based solutions has been well documented across customer, employee and financial data applications,” said Durow. “The unified communications segment now has more than 10 percent of the North American market choosing Unified Communications-as-a-Service (UCaaS) solutions versus on-site options.”

Mitel says UCaaS customers represent more than one million total users for the company, and that it has “substantially” more private cloud users.

“As customers move from intermittent transactions toward monthly UCaaS subscriptions, we have had to change how we design, deploy, bill and manage these services,” Durow said. “Further, we are also growing our customer success organizational capability so we can counsel and support these customers, in partnership with our channels where pertinent, to help guide them forward as they seek to add new features or intersect UCaaS capabilities with other SaaS services.”

Durow believes that responsiveness will be a key success metric for anything offered as a service.

“It’s all built around this transition from a transactional relationship to an experiential relationship,” said Durow.

Multiple industries are embracing the new service model. A recent Navigant Research report finds that Energy-as-a-Service has the potential to reach a global market of $221.1 billion by 2026. ServerWatch reports the Infrastructure-as-a-Service public cloud market is blowing up and revenues could scale from $16.8 billion in 2015 to $22.1 billion today.

For Mitel, acting on rising demand required the company to embrace a wide array of new technologies. The company used Salesforce for both internal and external tasks. They also rewired operations using Workday and adopted chatbots to boost demand-gen and service support processes.

“In our category, the number one differentiator for a brand is responsiveness,” Durow said, adding that the central focus with as-a-service offerings is the customer and their needs.

“The best companies that are really driving digital transformation speak very clearly about the problems that are solved, and they do it in a way that demystifies the technology. It doesn’t make it feel like they have to climb Mt. Kilimanjaro to get there. People want to leverage what they’ve got, have someone knit it together for them and do it in a way that helps solve a business problem.”

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