Implications of the Internet-of-Things on the components of business models of mining companies

Abstract

PURPOSE OF THE STUDY : The Internet-of-Things (IoT) has ramifications for how companies operate. To remain competitive, companies have had to adapt to the exigencies of the business environment, some of which are dictated by the IoT, possibly by modifying their business model (BM). However, specific IoT influences on BM components remain largely unexplored in academic discourse, especially with respect to mining companies in developing economies. This study therefore examines IoT influences on the BM components of mining companies and the resultant modifications to the BM deemed necessary for improved ‘IoT-savviness’. DESIGN/METHODOLOGY/APPROACH : This empirical study utilised a qualitative methodological approach and its target population was South African mining companies. Participants were selected by using a purposive sampling method along with the key-informant technique. Primary data was collected through semi-structured interviews and then subjected to a thematic analysis. RESULTS/FINDINGS : Findings of this study signal that the IoT has mostly influenced the BM components of key resources, key activities and key partners; aspects that constitute the ‘structure’ theme of the study. In comparison, IoT’s influences are subdued for the other BM components. Consequently, to improve competitiveness, modifications to the BM of mining companies are necessary and should focus predominantly on the aspects of key resources, key activities and key partners. MANAGERIAL IMPLICATIONS : Mining companies have to modify key resources, key partners and key activities to improve their competitiveness. Particularly, investments in up-skilling employees, to counteract job losses that may arise from the shift to the use of autonomous mining systems that leverage on the IoT is crucial. Increased transparency and collaboration with key partners, as dictated by the IoT, has to permeate mining operations. Additionally, better integration of mining operations into a ‘well-oiled machine’ connected through the IoT and utilising data sharing networks will enhance the value propositions of mining companies.