The Grill: Joe AbiDaoud

This mining company CIO must engineer IT change in a culture where IT change is new.

Joe AbiDaoud, CIO at Toronto-based metals mining company HudBay Minerals Inc., supports more than 1,400 employees, including 1,200 miners in Flin Flon, a remote outpost in Manitoba where copper and zinc ore are extracted from a mine over a mile underground. Since starting in February, he has overseen the launch of a $20 million ERP project, but he has also been looking for "low-hanging fruit" -- projects with a quick payback. AbiDaoud talked about what it's like to support IT operations in far-flung locations.

What's the most challenging aspect of delivering IT services to a mining business? The operations happen in very remote areas of the world, so we support IT in a decentralized model. We provide regional support at the site of operation and have some centralized IT functions around shared services and IT governance. For the most part, we try to provide end-user support locally. Logistically, that's easier.

The mining industry is closely tied to the economy. When production ramps down, IT is a cost center that needs to be ramped down accordingly. We have to be able to react quickly. We are trying to create some variability in the IT services we provide, so we're looking at servicing some things through external parties. Database support has been outsourced. We're also looking at some infrastructure support. Our IT staff is pretty lean. [HudBay's IT group consists of 12 full-time staffers and seven contract workers.]

What are your key IT initiatives for the coming year? Our ERP project is our No. 1 priority. No. 2 is building out another mine we have in the Flin Flon area, our largest to date. Our No. 3 priority is enhancements to the ERP system, which is expected to go into production in April 2011. The fourth thing is to digitize the exploration and development division's historical geological data.

What was the business case for the new ERP system? The decision was strategic and is supported by management. Management realized that systems were aging and an investment was necessary. Scaling the current IT platform was not feasible. If we went out and bought or built another mine, we likely would not integrate that operation onto the platform that exists. Our current business processes have been efficiently refined and custom-tailored to our business in Flin Flon. Our Flin Flon operations are the cornerstone of this company, and continue to be very successful. It would be challenging to expand these processes using the existing IT platform.

How does the remoteness of Flin Flon affect your IT architecture? We have mini data centers at these sites for performance reasons. However, I am not sure if we're going to stay with this model. Our new ERP system will be a shared service and will be hosted in our primary location.

Is it a challenge to redefine business processes for a new ERP system in a culture that isn't used to IT change? You've got people who enjoy doing things the way they have always done them for 25 or 30 years and have been very successful. So to come along and say, "Here's something new and something you can do differently," introduces a change management challenge.

We're talking about that right now with our ERP implementation. There has not been a major software implementation in this company since the early '90s. For us to introduce this new ERP system with new functionality, new ways of doing things and changing the business processes are difficult for some people and easy for others.

How are you addressing that resistance? The conversation [needs to be] around change management and how you get people to identify with the project.

If people can't identify with it, it has no relevance to their job. In fact, the guy who is driving a pickup truck [at a mine site] may not see a significant impact in terms of his job. But in terms of scheduling that person's job and scheduling repairs for that truck and ordering parts -- that all will be driven by business processes governed by the new ERP system. So we have someone who works with each of the department heads to come up with a way of explaining how the change impacts people so they can identify with it.

There are just 6,500 people in the greater Flin Flon area. How do you find qualified IT people in such a remote location? It is very difficult to recruit people, so we developed a program that takes people who are already in the organization and trains them to become IT professionals. These people could be working anywhere in mining operations.

What are your IT organization's biggest challenges One is the perception of IT as an order-taker. Not only can we provide services, but we can anticipate the business needs and come to the table with things that add value.

For example, our exploration and development division is the lifeline of this organization. They're the ones that go out and find new mines or extend the ore body beyond what currently exists. We provide them with laptops and e-mail, and that's about it. They have a lot of historical geological data on paper which is to be expected for a company started early in the 20th century. Some of the analytics required for that data sits in people's heads. We are looking at how to digitize that historical geological data and connect in hopes to extract more value.

We have historical data that's been sitting in vaults for decades. If we digitize it and apply some new algorithms to it that didn't exist 40 or 50 years ago, we may or may not find some more mines on land we explored and [thought was] exhausted. This is an area where IT can play a leadership role.

Editor's Note: Clarifications were made to this story after it was first posted.

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