3 Major Reasons the Chemical Industry is Going Digital

By: | Category: ERP

Digital technology and the data it creates and manages are bringing tremendous growth and transformation to the chemicals industry. The chemicals sector is really a group of industries, from base chemicals, beauty products, and paints, to fragrances and more. But one thing they share is the pressure of staying current with the ever-increasing transformation in digital technology, international competition and consumer demand.

That is why chemical industry leaders are joining other industry leaders by utilizing their digital capabilities to their organizations are more operationally efficient, provide superior customer service and deliver innovation in sales and marketing.

This new technology warrants the right digital strategy. By implementing a true digital core, a common system of record throughout the business is achievable.

“Chemical companies’ business processes, including manufacturing, marketing and sales, and R&D, present opportunities for performance improvement based on data capture and interpretation. Functional excellence has generated significant productivity improvements over the past two decades. Digital provides the means to unlock a new level of productivity enhancement,” according to McKinsey.


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Customers’ buying expectations are evolving. The next generation of purchasing agents has entered the market, and their expectations as buyers have been shaped by their personal consumer experiences. These include strong online buying habits, the expectation of a personalized experience, assumptions regarding mobile access or apps and even social capabilities. They expect “always on” information that is always up to date, a single point of entry for all their interactions with their vendors’ given companies, self-service digital experiences, a fully responsive mobile user interface, and to be able to buy on their own time. PWC posits that “these expectations can be leveraged by chemicals companies to gain advantage by using this in a business-to-business setting.” We agree and believe that chemicals companies can use their technology investment to satisfy these B2B customers in the following ways:

  • Embrace digital and mobile experiences – the next generation of buyers expect systems to communicate within the organization – intelligent responses, not just the delivery of packets of information. Modern digital experiences now allow customers to buy, request samples and access their order information whenever and wherever they desire.
  • Deliver complete information – a full line of sight to available quantities, order histories, formulas, yields for all products.
  • Provide the customer information the way they want to receive it. As chemicals are available in a variety of units of measure, the ability to deliver quantity information in the units that the customer requires is an important factor driving customer satisfaction.


We believe that giving sales teams insights into the behaviors of their customers is a key benefit of expanded digital capabilities and the consolidated data set that results from integrated chemical manufacturing software. And McKinsey agrees, “Digital innovation in marketing and sales includes applying advanced-analytics-enabled pricing systems, generating growth opportunities from data, and using algorithms to predict churn at the individual-customer level and then suggesting countermeasures to the sales force.” The impact of these initiatives is significant for the Chemical Industry. Certainly, using internal and external data sources will create transparency at the customer-product segment level. And advanced analytics can scan millions of lines of data to develop suggestions for additional sales to individual sales reps, with the suggestions delivered via an easy-to-use app.


Chemical companies can benefit from operational efficiency gains through improved asset utilization, enhanced yields, and efficiencies, and enhanced higher employee productivity with modern ERP and supporting business systems like Sage X3 (Sage EM). Specific examples include:

  • Elimination of costly and error-prone repetitive data entry
  • Reduction or elimination of wasteful paper flow
  • Access to real-time pricing and availability from the supply chain
  • Optimization of logistics and product deliveries
  • Proactively identifying customer payment trends
  • Efficient integration of acquisitions
  • Real-time synchronization of data from other parallel systems including CRM Systems, Human Resource, and eCommerce systems
  • Reduced labor costs associated with self-service (by customer) data

There is plenty of expectation and enthusiasm about the potential of digital in the chemicals industry. We believe strongly the digital transformation is improving how companies do business and is having a significant impact on many areas in the chemical industry. We are seeing changing value chains, which is leading to increased productivity and innovation while creating new channels to market. Yes, we understand, we all must separate the substance from the hype… but the results speak for themselves in operations efficiency, customer satisfaction and in providing chemical companies a competitive edge.