NEW YORK Large integrated steelmakers have underinvested in information technology (IT) and software for years, with several corporate IT budgets at "barely maintenance" levels, according to one software consultant.
"Steel companies are still in a quite inefficient IT landscape," Javier Cortina, a managing director of metals for Chicago-based Accenture LLP, said last week during a software panel discussion at the Steel Success Strategies XXIX conference in New York sponsored by AMM and World Steel Dynamics Inc., Englewood Cliffs, N.J.
"IT has been fighting for capital the last (few) years vs. many other investments within the industry, and has not been a winner," Cortina said. Many IT projects have been delayed, or some have been cut. In the quite large companies I deal with, IT budgets have come to barely maintenance levels," said Cortina, who told AMM via e-mail that he works chiefly with large integrated mills, but declined to disclose their identity or number of clients.
One problem is that many steelmakers see IT spending as a pure cost, and not a way to drive savings, Cortina said.
"We have seen a number of projects (by) steel clients reduced or delayed," he told AMM. "In general there is a lot to be done in simplifying current landscapes and incorporating more advanced tools."
Cloud computing, data analytics and mobile platforms are new IT tools that are slowly coming into play at steel companies, according to Ron Greco, a senior consultant at Atlanta-based software company Aptean, which serves sectors including manufacturing.
Cloud computing helps mills reduce IT costs and staffing, aids scaling and makes companies more agile with manufacturing and other tech deployment, Greco said during the panel discussion.
Analytics organizes supply chain and manufacturing floor data, resulting in precise data personalized to customers.
Adoption of cloud computing models in the steel industry will accelerate through 2015 and beyond, Greco predicted. But some mills may resist cloud computing because it means software must be located off-site, he said.
Greco and Cortina agreed that security has become a concern, especially after the recent U.S. indictment against Chinese hackers, who allegedly stole commercial secrets from companies like Pittsburgh-based U.S. Steel Corp. (amm.com, May 19). Pricing, costing, and manufacturing method data are especially sensitive areas, they said.
"Digitalization is here to stay. I dont think any industry can say they wont be impacted. Steel needs to learn from many other industries," Cortina said.