Four Ways to Become a Technology-Driven Chemical Company
While chemical companies have a well-earned reputation for product innovation, they’ve typically taken a more, well, traditional approach to technology. Less than half of chemical companies have a defined digital strategy or digital transformation roadmap, putting the industry behind many, if not most other sectors.
Established companies in the industry often base their success on doing things in the ways that have always worked for them. But that approach is now too risky. Young startup companies are disrupting the market, leveraging front and back-office technology to drive new efficiencies and lean, cost-effective workflows. As a result, today’s chemical companies must reach a new level of functional excellence, leveraging technology to forge a sustainable path forward. Here are 4 places to start that journey.
1. B2B eCommerce is now a mandate
Commerce has moved online. It’s a trend that’s impossible for chemical companies to ignore any longer. Way back in 2017, McKinsey research found that 85% of B2B chemical purchasers would prefer digital channels when reordering a product rather than interacting with a salesperson.
It’s critical for chemical companies to provide eCommerce capabilities to their customers and their suppliers. Those who ignore the call will lose market share to their more progressive peers.
2. Business intelligence powers visibility
In its 2022 Chemical Industry Outlook, Deloitte’s consultants point out that visibility is likely to become the most critical capacity for companies in the industry (including into costs and pricing) and that digital technologies are the essential enablers.
Real-time information availability made possible by Business Intelligence (BI) tools, speeds and informs decision making. Management can use these metrics to build more effective business models to navigate process flows throughout the organization. Quick access to information surrounding sales, costs, customers, suppliers, production, and inventories not only has the potential to improve internal operations, but it may also constitute a competitive advantage by allowing informed chemical companies to pivot more quickly than their peers.
3. Improving the customer experience is good for the bottom line
Like consumers everywhere, chemical industry customers’ expectations are growing. Customers expect personalization in their communications. They expect a company to tailor interactions to meet their needs. To understand the customer journey and anticipate customers’ needs, chemical companies will need to embrace technologies including Customer Relationship Management (CRM) applications and data analytics tools.
However, unless organizations integrate their CRM applications with their ERP systems, the value potential is limited. Siloed CRM and ERP data obscures visibility and restricts the information flowing to all areas of the business. With integration, managers and their teams gain that 360-view of the customer relationship that is essential not only for promoting productivity, but for elevating the customer experience.
Removing friction from the sales cycle elevates the customer experience, and that’s good for business. Deloitte research found that B2B buyers are 34% more likely to buy and 32% more likely to renew a contract with suppliers that master customer experience.
4. Document management supports sustainability efforts
Chemical companies are feeling the regulatory pressure — and the preference — to incorporate more sustainable business practices. While chemical companies have opportunities to decarbonize in their product lineups and packaging, a simpler measure lies in adopting paperless workflows and document imaging.
Easily-incorporated technology is available to minimize or eliminate paper across virtually every operational area — from electronic customer invoicing, accounts payable and purchase order automation, regulatory and quality assurance documentation, integrated credit card processing, and expense automation, to tracking product testing data. It’s a simple, intuitive step that should be a priority for every chemical company.
The risk of inaction
Technology is the primary driver of business today. Chemical companies cannot afford to wait before adopting the technology tools that enable and promote sustainability, commerce, decision making, customer experience, and sustainability. The risk of inaction is too great. Tech savvy startups and larger conglomerates are prioritizing technology investments, leaving the status quo companies behind. If you’re ready to learn more about the next-generation solutions we’ve referenced here, contact a member of our consulting team. We’re here to help.