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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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Scaleup hub OneEleven to expand Toronto office space

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Scale up community OneEleven is expanding. The expansion will make the Toronto location of the global scaleup hub one of the largest in the world.

This September, OneEleven will expand its 325 Front. St. West location by taking over another floor in the building, bringing its total Toronto footprint to 100,000 sq. ft. The expansion will allow OneEleven to support more deserving scaleups in the region.

Room to scale

35 of the city’s fastest-growing technology companies currently use OneEleven’s space. The added 50,000 sq. ft. of space will allows for an additional 13 offices, to accommodate teams ranging between 30 to 50 people, along with open plan seating for smaller companies.

In a press release, OneEleven founding partner and CEO of OMERS Ventures John Ruffolo spoke to the benefits of the added space at the Toronto location:

“There are few alternatives available to companies in this phase of growth beyond mentorship, word of mouth, and experience. We believe that OneEleven is well-positioned to build the number one scaleup ecosystem in the world by expanding its existing Toronto footprint and replicating the success of its headquarters in the world’s top startup ecosystems.”

As well as expanding in Toronto, OneEleven is opening a space Ottawa in July and is looking to expand into Vancouver, London, Berlin, Boston, and beyond. Companies interested in joining the OneEleven community of scaleups can apply at http://www.oneeleven.com/apply/.

What does OneEleven bring to the table?

OneEleven focusses on providing support and community resources to high-growth tech companies when they most need it. Scaling up is never easy, and getting help during the crucial transition from the Seed Stage to Series A funding can be crucial. That’s why OneEleven brings together first-time and repeat entrepreneurs with a ‘pay-it-forward’ mindset to help scale their high-growth tech companies together.

The scaleup hub focuses on providing a highly-connected global network and tailored resources including access to expert advice, world-class workspaces, technology, and specially-designed services to support sustainable growth. With the support of corporate partners like Royal Bank of Canada, OneEleven has helped 60 rapid-growth technology companies and is on track to support 100+ by the end of 2018.

“What is unique about OneEleven, and why we are seeing so much demand in Toronto, is that we focus entirely on the unique needs of scaleups,” said Dean Hopkins, Chief Growth Officer at OneEleven in a press release. “Our ecosystem partners have done such a great job of supporting startups that many Toronto ventures are now transitioning to scaling. This is where we come in.”

Recently, OneEleven and DXJournal launched #ScaleStrategy, a co-developed editorial series to deliver insights for entrepreneurs and intrapreneurs. The ongoing series will cover the kind of innovative and disruptive advice that scaleups can expect from the OneEleven community.

#ScaleStrategy is produced by DX Journal and OneEleven. This editorial series delivers insights, advice, and practical recommendations to innovative and disruptive entrepreneurs and intrapreneurs.

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Manufacturing

Distributed Manufacturing: Next in line for blockchain innovation

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries.

Cognizant

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Sponsored by Cognizant

By: Jagmeet Singh

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries. Because the technology can provide an immutable digital record of contractual interactions and transactions across an ecosystem, we believe that manufacturing is likely next in line.

Blockchain is a mutually shared ledger of all transactions in a given transactional relationship. Combined with its consensus mechanisms and use of public key infrastructure (PKI) to verify and authenticate all changes made to the ledger, blockchain can enable the network itself to ensure trust among participants. The result: a whole new way to support distributed manufacturing across the value chain.

The Importance of Trust

Consider, for example, the ways in which blockchain can simplify how trust is developed within a manufacturing ecosystem. In the traditional manufacturing world, parties transacting with each other spend considerable time and money on establishing external mechanisms to ensure trust, in the form of contracts, service-level agreements, quality checks, inspections, audits, scanning, escrows and regulatory compliance reviews, to name a few. As the number of parties increases, so does the complexity. Reconciling separate ledgers, enforcing contracts, ensuring supply chain transparency and protecting intellectual property when multiple entities are involved are all laborious and burdensome processes, prone to error and vulnerable to fraud.

Related: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Research shows that companies that build a culture of trust can fuel stronger performance by enabling departments to interact better and perform better across multiple dimensions. Establishing trust betweencontracted parties has similar positive effects. All these measures, however, amount to a costly “trust tax.”

For participants in a blockchain network – product designers, production shops, 3-D printers, logistics partners, sales and customer service  – that tax is greatly reduced. A secure, distributed ledger infrastructure accessible to multiple parties enables a new level of real-time transparency and efficiency for transactions involving the transfer of anything of value – whether that means ideas, money or ownership.

In our recent global study that included 281 manufacturing professionals, in fact, “trust” was a top driver for blockchain adoption.

Distributed Manufacturing Next in Line for Blockchain Innovation

Ensuring Transparency, Security, Auditability

Blockchain ledgers are:

  • Shared: Separate entities share a common source of truth.
  • Distributed: Blockchain relies on peer-to-peer collaboration, with no central ownership.
  • Secure: Cryptographic algorithms verify, authenticate and secure transactions.
  • Time-sequenced: Data is written consecutively and is time-stamped.
  • Immutable: Once written on the blockchain, data cannot be changed, tampered with or deleted.

Through smart contracts with supply chain partners on the blockchain network – programmed agreements that are independently verifiable and automatically executed when predefined conditions are met – companies can minimize human intervention and ensure performance transparency, transaction certainty and auditability.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Within industries and even across interlocked, tiered manufacturing sectors, distributed ledger systems allow companies to develop new, platform-based process flows. A user might execute a smart contract for a custom-configured order, for example, combining designs from multiple sources. The encrypted design data would be recorded on the shared platform; materials and services could be autonomously sourced; and a shared factory could produce the customized product. Payments, including royalties to designers, would be issued when the product is delivered. A record of all transactions, from design selection to payment, remains on the blockchain.

A Rising Tide Lifts All Boats

Blockchain technology thus enables distributed manufacturing, offering participants unprecedented opportunities to develop new product and service lines, create new customer segments, enter new markets and find new ways to use and share assets:

  • Through supply chain transparency. All parties transact on a common platform, gaining real-time visibility into processes in the value chain, and simplifying materials sourcing and the interaction of design, manufacturers and other service providers. Supply chain processes, including payments and trade finance, can be streamlined and automated using smart contracts.
  • Through digital product memories. Immutable records of asset provenance, materials, production data, ownership and other data ensure authenticity and minimize transaction risk.
  • Through secure digital intellectual property. Parties to a transaction can be assured that their intellectual property is protected. Using blockchain to manage a contracted production run from a 3-D printer of ceramic components, for example, would allow a manufacturer to encrypt proprietary 3-D print files from end to end while creating an immutable history of the transaction. Similarly, escrows and royalty accounting would protect designers and other owners of IP.

There are many more circumstances in which adopting blockchain technology can deliver value. Participants can slash inventory costs and service times. They can eliminate reconciliation, and automate and speed financial and process flows. They can reduce manual interventions and reduce fraud. And they can create new ways to extend the lifecycle of products and optimize the use of assets.

What’s Next? Evaluating Readiness

As manufacturers move toward a shared and distributed model, business leaders can consider four questions when evaluating readiness:

  1. Where in the value chain, internally and externally, are we paying the highest “trust tax” in terms of excess cost, effort or lack of agility?
  2. How would the availability of a digital product memory drive value for our company, our customers and our business partners?
  3. Which types of partners, in what geographies and with what expertise, could we work with if transaction costs and efforts were lower?
  4. Which information assets (e.g., manufacturing, maintenance, operational and usage data) about our products could we monetize if there were a secure way to do so?

A blockchain-enabled, collaborative database is optimal for ensuring agreement between all participants in a value chain. It’s time for manufacturers to examine the implications for their business model. Organizations that gain hands-on experience with blockchain technology thorugh pilot projects will have an advantage as consortia start to form, and will be better equipped to lead the effort and make key decisions around structure and governance, prepare for the corresponding cultural shift, build skills and capabilities, and understand how it will impact business strategy going forward.

Get in the blocks. The race starts now.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Olesya Gorbunova, a Senior Consultant in Cognizant’s Blockchain & Distributed Ledger Practice, contributed to this blog.

This article originally appeared on the Digitally Cognizant Blog

Cognizant

Cognizant (Nasdaq: CTSH) is dedicated to helping the world’s leading companies build stronger businesses — helping them go from doing digital to being digital.

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France and Canada collaborate on ethical AI

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Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron have made a commitment to engage experts across all areas of research to better understand how to develop artificial intelligence technologies that benefit all.

The new collaboration was announced by Trudeau and Macron on June 7, 2018, just ahead of the turbulent G7 Summit which took place in Charlevoix, Quebec. The basis of the collaboration will be an independent expert group, who will invite specialists from both governments, together with internationally recognized scientists and representatives from industry. Interested members of social groups will also have an opportunity to take part.

Challenges and changes to society courtesy of AI

The new group will set out to identify the key challenges and opportunities that artificial intelligence promises, especially orientated towards developing social and economic benefits. The group will also outline some best practices, which will be designed to ensure that artificial intelligence fulfills this potential.

CIFAR sounds support

The decision to develop artificial intelligence for the benefit of all people worldwide has been applauded by CIFAR, which is a Canadian-based, global organization with nearly 400 fellows, scholars and advisors from 17 countries. The Canadian Institute for Advanced Research (CIFAR) has highlighted the emphasis upon ensuring that artificial intelligence is ethical and that human needs should be at the forefront of future developments, at the heart of the France-Canada agreement.

In a statement, Alan Bernstein, president and CEO of CIFAR said: “AI has the potential to change almost everything about how we work and live. We enthusiastically endorse the creation of an international study group charged with understanding emerging AI technologies and how to ensure they are beneficial. We look forward to working with our partners in Canada and internationally to support this commitment.”

CIFAR, which is based in Toronto, manages the $125 million federal Pan-Canadian Artificial Intelligence Strategy. With the announcement, Elissa Strome, who is the executive director of the Pan-Canadian Artificial Intelligence Strategy, noted how it “builds on Canada’s longstanding leadership in AI research and innovation and the vibrant social science and policy community in Canada.”

She adds: “We look forward to working with our partners at the three AI institutes in Edmonton, Toronto and Montreal and researchers across the country to support today’s declaration.”

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