Last updated on July 10, 2019
Increased competition, evolving regulatory environment, demanding customer needs and dynamic cost equations are having a huge impact on chemical enterprises in recent years creating a progressively challenging environment. As a result, many chemical organizations are focused on reinventing their business and operating models through transformational trends emanating from other industries.
Case in point
A major paint manufacturer was facing a huge challenge as their customers wanted to involve more in the process of selecting paints and were also looking at a consultancy model from the organization. In such a scenario, commoditization had to be overlooked. It was time to build a new strategy. The organization also felt the need to transform their business digitally and provide a complete experience to their customers.
The organization implemented a B2B portal. Suppliers & subcontracts were linked through this portal. Also, an intuitive dashboard built on an ERP platform was put in place to help customers place orders and provide answers to their queries. This unified and efficient digital strategy freed up the organizations’ resources and also added more value by providing consulting services to the customers.
Changing customer demand and expectations
As in the above case study, industries selling commoditized products are facing challenges from organizations that are willing to innovate and use digital transformation to meet their customers’ demands. These new age organizations are selling customer experiences instead of products. Delivering a superior customer experience is essential to success in several industries — and increasingly, for B2B companies also. But customer expectations are constantly rising, and today many companies are looking for ways to move to the next level and provide an iconic customer experience. Better experiences can always turn loyal customers to evangelists of their products.
The chemical industry is one such industry that is also challenged by niche players who strongly focus on consumer demands. The chemical industry is not just about one single industry, but is a group of industries that produce a wide range of products like base chemicals, paints, beauty products, fragrances, food flavorings, etc., across many unique segments all of which face pressure due to fast changes in digital technology, consumer demand, and global competition. Many existing players in the chemical industry do have good legacy systems. It is just that their functions need to be amplified with the use of good digital technologies.
Changing channels: The right technologies and the right approach
Digital technology along with the data it brings holds tremendous potential for the chemicals industry and can all play a vital role in driving business value. But digital transformation alone isn’t the answer. In the chemicals industry, it is the use of technology against the right digital strategy that holds the real value. This requires a focus on implementing a true digital core that enables a universal system of record through the business and a corporate mindset that can embrace agility, adaptability, and innovation, driven by a customer-first, design thinking perspective.
Details of few such strategies are listed below
The scope of digital transformation in the chemicals industry
Chemical industries must leverage large amounts of data to understand their operations and their customers better and identify new revenue streams, including innovative services and outcome-based models. To thrive, chemical companies need to conceive and offer a compelling new customer or even end consumer experiences, advance their operational efficiency, launch or integrate with new digital offerings, and build innovation ecosystems.
So, in addition to enhancing efficiencies and enabling decision making, the digital transformation must also provide a great experience to the customers.
As the chemical Industry find ways to be more customer-centric, it can apply some of the practices discussed above and use digital technology to re-think their traditional direct and indirect sales and marketing channels—while monitoring emerging platform-based channels. So, in addition to enhancing efficiencies and enabling decision making, the digital transformation must also provide a great experience to the customers. The future of the chemicals industry is in the creation of an ecosystem focused on improving the customer experience.
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