Presentation: Society of Mining Metallurgy and Exploration (SME) Annual Conference,
Location: Denver, Colorado, USA
This paper analyses the range of strategic and structural changes and provides examples of some key technology delivery responses.
It identifies that over the last two decades the Resources Industry has generated mediocre returns – and presents a chart that shows it actually has been a net consumer of cash !
The challenge for technologists is to develop ways of lowering costs (both capital and operating) and improving the industry’s flexibility to break out of the traditional boom-bust cycle
A quick analysis indicates that there is no relationship between the level of expenditures on exploration and R&D and industry profitability. The increased difficulty in finding and developing profitable new projects is not restricted to the Resources Industry. We see the same trends emerging in the BioTech industry as well.
For those charged with managing technology, the two key challenges facing them over the next decade are (1) moving technology development from a cost focus to a value focus (that is from “how much long term research can we afford?” to “identifying and capturing the value created from R&D”) and (2) the recruitment and retention of key talent
Investment in R&D (and exploration) need to be considered in terms of three time horizons –
- Horizon 1, extending and defending core businesses over the short term,
- Horizon 2, building emerging businesses over the medium term, and
- Horizon 3, creating viable options over the longer term
All three horizons must be managed and that each requires a different focus and performance measure. Finally, the most important factors for successful technology management is a clear vision of what needs to be done and the full commitment from the senior management of the company.