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02 Sep 2020 - Technology - GIM Suite by The acQuire Newsroom

How to calculate the ROI of your geological data management software

Determining the ROI of geological data management software is no small task. Unlike with other corporate-grade enterprise software, there’s no widespread agreement in the mining industry about the best way to determine the value of geoscientific data. Data management software is still mostly viewed as an expense and not as an enterprise-wide tool for making business-critical decisions. Adding to the complexity of the decision, different solutions have very different ways of working so it may seem like you’re never comparing like for like.

So what can a geology manager do?

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Step one: Consider the broader application of your geological data

The first thing to consider is whether your data is used throughout your company. Is it used for making decisions that can affect the profitability of your mining operation? Does the wider business rely on geological data to make strategic decisions? Does your data need to be shared across other mining software? Is your data used for accountability, governance or compliance reporting? Will you be reliant on your data in the future, for possible activities like mine rehabilitation and decommissioning?

If the answer to any of these questions is yes, then enterprise-grade software must be considered for data management. This is where the difficulty comes in because, by design, enterprise software is slower to realise a return and can be harder to justify. The first year may show no return at all as new software is implemented across your site or across your company. It’s essential for geology managers to consider the broader impact of enterprise software in an organisation when calculating ROI. According to CIO Australia, this requires you to prioritise the benefits the software provides, including where it contributes to things like:

  • Increases in: revenue, profit, growth, speed, efficiency
  • Reductions in: complexity, consulting costs, time, training
  • Improvements to: productivity, ease of use, processes, capabilities
  • Creation of: strategy, alignment, systems.

Step two: Factor in the total cost of ownership over the life of the solution

Geology managers need to consider what the total cost of ownership is for the life of the data management software. Will a solution attract regular consulting fees? Is the software mature enough to interface with other software products? Is there a complete solution for mobile, desktop and web? Will you have to invest in customised code to implement it or keep it working? Is the software solution strategic to the vendor who supplies it or is it a supplementary product that will never attract significant research and development investment?

Consider all the ways geological data impacts the business. Roy Irvine of Vela Software Group has long been concerned all levels of management, including the board, don’t recognise the value of geological data as well as they should. While in a previous role as Forum Director at the EMMM Group, he pointed to the fact that geological data is almost always managed by geologists, where other disciplines like HR and supply chain leave the data management to IT experts. This often leaves geologists without the proper support, and that’s when problems set in.

Step three: Calculate the value of your geological data

Roy has a solution to that problem. He has a simple way to estimate the value of a geological database to the company, which can be a good start to getting the focus needed on making a decision for enterprise software. This is what he advised when speaking on the GIM Channel podcast about understanding the value of geological data.

Take how many metres of drill samples in your database and multiply it by the current drilling cost. Then double the cost because that takes into account the effort of the people who worked on it.

You come up with some very big numbers,” Roy said.

In the tens, well, most of them are at least fifty million dollars; some of them are three or four hundred million dollars. Suddenly, when people realise that, their eyes open.

I say if you lose the database, that’s what you really lose. Because in a lot of cases you can’t get back to the places where you sampled. You’ve either mined them out or you’ve given up the lease area.

Roy wants everyone to start looking at their geological data as one of their most important assets and would love to see geological databases listed as a financial asset on a mine financial statement. When you start expressing things to your mine management in ROI terms, Roy says things become very simple and it removes the debate about why you should have the latest technology to manage your geological data.

Step four: Calculate time savings

But understanding the value of your data is the first part of calculating a return. You can also address how much time it takes for your staff to manage geological data when it’s logged manually in spreadsheets or used on desktop software. In other words, Roy counsels miners to figure out how much time you’ll save if you have the right tools.

The senior geologist in the team literally is saving one to two hours a week, and the junior geologists are saving just a handful of hours a week. The numbers really are amazing when you look at them like that,” Roy says.

One of the problems many geologists have, according to Roy, is a lack of business training.

“I was actually lucky to do a one-year MBA, so I understood ROIs.

“When you start expressing things in those terms, things become very simple and there’s no argument about why you should have the latest technology to manage your geological data.”

If you haven’t listened to Roy’s interview on the GIM Channel podcast, spend 20 minutes to hear his full interview. It offers fascinating insight on the business end of GIM.

Where to find help

Start by calculating the ROI of enterprise geological data management software for your organisation. This goes a long way to helping your management team understand the necessity of viewing geological data as an enterprise-wide asset. Understanding the value of your data and potential time saved by your team when using an enterprise software solution also helps to make your case. Putting things in business terms is essential to getting the right support for managing data assets as effectively as possible.

Learn more about GIM Suite or contact our acQuire team to understand more about our GIM Solution and why it’s the better option for large enterprises.

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The acQuire Newsroom

The acQuire newsroom brings you the latest GIM news for technology and business in the natural resources industry.

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