Mind your ERP System’s Data Gaps

It is undeniable that the mining sector is straining under the regulatory frameworks set in motion by the Mineral Petroleum Resources Development Act (MPRDA) and that the reporting requirements are complex and taxing.

Compliance processes have a cost and administrative burden that create many challenges for mining companies and its management teams. The Social Licence to Operate (SLO) compliance alone, not only depends on how well stakeholder engagements are managed and recorded but also on the efficient management of performance reporting and mining charter responsibilities. So too does the reporting on Social Labour Plans (SLP) and the Mining Charter Scorecard (MCS) as well as other related regulatory reporting. Reporting is highly dependent on having access to the right data at any given time.

With the tight margins that mining operations have to contend with the push to automate and set new efficiency levels are evident in the trenches. Engineers and companies that support mines push the limits of technology each day. Unfortunately, this same push cannot be seen when looking at the Enterprise Resource Planning (ERP) systems that mines run. When it comes to ERP systems the mines go for either prestige (big names or as mining IT professionals love to say the “standard”) or a hodgepodge of systems used by other industries not build for the mining industry. When you hear about a mining company spending a million rand a day on their ERP system and they cannot produce the basic statutory reporting, one has to wonder what drives such insanity!

The reporting woes of the mining industry cannot be placed purely at the feet of ERP systems alone. Inefficient processes across the Human Resources (HR), Training and Procurement departments are often at the core of missing or bad quality data. It comes down to the culture of the mine, SLO objectives must be tightly integrated into the way the business is run and any additional responsibility created by SLO must be clearly captured in the job description of especially the auxiliary service departments (Payroll, HR, Procurement, Accounts and IT) of the mine as they are the source and custodians of much of the mine’s data.

Data validity (input)

In instances where the ERP system does actually enable the gathering of the required data it is often not validated (correctness, meaningfulness). An example would be the address of a supplier or employee. The address fields are often free-capture and not validated making the data near impossible to use for both the Mining Charter and Broad Based Black Economic Empowerment (BBBEE) reporting on localization.

Data integrity (maintenance)

Maintenance of data is a critical aspect of any data management and reporting system, but too often, weak data quality management practices leave core company data poorly maintained during collection, processing, and storage thereof. Poor data management adds to inefficient reporting processes exasperated by the slow response by ERP vendors to incorporate new data fields needed for accurate and consistent reporting on compliance elements (that may change frequently). Further to this, system customization is costly and time-consuming and adds to the cost of the data and system maintenance life-cycle.

Data Transparency (Access to data across departmental silos)

Social Labour Plans (SLP) and other compliance reports require data from multiple departments. Different data sources bring about a range of issues as different teams, who also operate different systems, must work together. But too often, the lack of data centralisation and analysis of common data sets (CDS) required to report on are easily hindered by silo mentalities, internal organisational politics, and unnecessary inter-departmental red tape.

The South African Mining industry has come a long way in their efforts to address transformation within the sector. However, it cannot be denied that compliance is costly and complex and that successful implementation and reporting of social transformation commitments require an in-depth focus on the management of the validity, integrity, and security of efficient and effective data management processes.

With the Mining Charter Reporting Period on the horizon – inefficiencies in data management processes places a burden on human resources as a lot of time is wasted in generating reports which are never cross-validated and are often not reproducible. The lack of transparency of the source data makes the reports un-auditable and thus untrustworthy – risking the ire of the Department of Mineral Resources (DMR).

Your organization will benefit from the efficiencies afforded through cloud technology and automated data assessments aligned to the regulatory reporting requirements. Contact MTS for more information.

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