The chemical industry is highly advanced. Today’s processing plants use state of the art equipment and are computer controlled. Meanwhile, chemical supply chains are organised on computers and modern software designs new chemical compounds in an office, instead of a lab. The digital world is everywhere in the chemicals industry; except in sales. For the buying and selling of industrial chemicals is still largely done by meeting traders and manufacturers at conferences, emailing known customers and by picking up the phone.
The worry now is that this old school way of business will have a detrimental effect on the industry’s effectiveness. Indeed, many think that a lack of digital sales management will see the collapse of many chemical businesses.
For example, according to Paul Taylor, SAP expert and Forbes magazine contributor, “A digital transformation is being driven by a set of technology mega trends including mobility, hyperconnectivity, super-computing and real-time big data analytics, cloud computing and social.” And he believes that if your chemical business isn’t doing any of these things, then it could be in trouble. He even notes a study that found, “In the next 10 years it is estimated that 40% of the S&P 500 will no longer exist if they fail to keep up with these technology trends and recognize that the world has changed.”
This is a belief supported by a recent CapGemini Consulting report entitled, ‘The Digital Advantage’ which states that, “companies who have embraced the digital world and execute on their digital strategy register real gains in shareholder and stakeholder value. Typically they boost revenues by 9%, increase profitability by 26% and gain 12% in market valuation.”
This is an idea supported by Stefan Gurtzgen, senior director of chemicals at SAP and contributor at specchemonline.com, when he recommends using real-time pricing management as a competitive chemical business strategy. He writes, “Today, customers demand accurate pricing information at all times in order to make smart purchasing decisions. In the new digital economy, it is now possible to provide on-the-spot, competitive pricing for customers and prospects, including delivery commitments.”
This may go in some way to explain the meteoric growth of online trading companies, such as Alibaba and Amazon, as well as B2B online trading hubs like Spotchemi (who specialise in chemical E-networking and who host this blog page). They are embracing the changing times, and can see the strategic advantages of using modern digital business techniques to gain advantages.
Certainly millennials, the new wave of business thinkers born after 1985, think that the Internet is a better way to communicate and therefore do business. In a 2011 report by PWC, called “Millennials at Work”, it was found that the traditional ways of selling chemicals (networking, attending conferences, meeting potential customers) clashed with the way they expected to do business. It stated that, “With technology dominating every aspect of millennials’ lives, it’s perhaps not surprising that 41% say they prefer to communicate electronically at work than face to face or even over the telephone. Millennials routinely make use of their own technology at work and three-quarters believe that access to technology makes them more effective at work.”
This means that your next prospective client, feedstock supplier or chemicals purchasing manager is likely to prefer digital contact over face-to-face introductions. And if you are not sufficiently digitised and taking advantage of databases, E-networking and targeted online campaigns to promote your industrial chemical products, then you competitors are.
So what’s the next step in getting your chemical business into the 21st century? Well according to the experts at CapGemini Consulting, “The digital transformation must be led from the top.”
So who’s leading your revolution to a digitized way to chemical sales?