21 Sep 12 Unearthing more value from outsourcing in the mining industry

The global mining industry has been facing major challenges over the past three years, but the factors affecting the industry are moving to a new level of extremity. A study from Deloitte revealed that these challenges run from the usual such as:

•    bringing costs down
•    managing commodity price volatility
•    enhancing corporate social responsibility

to newer ones such as:

•    improving capital project management
•    attracting financing
•    bridging the talent gap with older workers retiring and filling in younger employees
•    mitigating the risks of diversification and planning for unforeseeable events in the global economy

These issues are acting as a roadblock for mining companies to improve collaboration and streamline operations globally, comply with international regulations and enhance government and community relations.

In the past, mining companies have outsourced traditional BPO and ITO services to help address some of their challenges. These services include procure to pay and order to cash within finance and accounting, payroll and learning services within human resources, back office contact support, industrial automation, software and embedded development, and general IT support services. These services have helped automate a lot of the processes in the mining value chain. In spite of these investments, the earlier challenges as described in this article persist.

This is where outsourcing of knowledge driven services comes in the picture – traditional IT/BPO services help consolidate processes and save costs to an extent, but their ability to provide any value beyond the stated objectives remain limited. The industry, led by major player such as Rio Tinto have begun outsourcing key high value services such as sourcing new talent for specific functions, automating bid management, market research specific to the mining supply chain, financial research monitoring global indices tracking prices, master data management through analytics and a centralized expediting system. Their outsourcing partner for these services is Infosys BPO . Infosys had a strategy to expand beyond the usual buyer markets of the US and UK and foray into the APAC region. They helped set up these processes for Rio Tinto, and through this partnership, they were able to integrate IT and BPO services as well such as SAP implementation and FAO services. Another strategic relationship from Rio Tinto , this time, with iGate Patni for data mining and analytics services, has resulted in the opening of an innovation centre, titled Rio Tinto Innovation Center, in Pune, India. This allows further collaboration between resources in both companies, Rio Tinto and iGate-Patni.

Taking a leaf from these outsourcing partnerships, other service providers focusing on KPO services to fuel their new wave of growth, must consider the mining industry as their next big untapped opportunity. The industry offers attractive benefit such as long term sustainability, scalability across geographies and processes, and an integrated outsourcing framework with KPO as the main service offering, backed by the supporting base of IT and BPO.

Blog,BPO/KPO Services
ValueNotes Research
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