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How to optimize
To choose the focus of digital efforts, chemical companies can look at the size of each opportunity and consider how to apply it to their business:
The service cost can be reduced by 15% to 50% through e-commerce, process digitization and the use of big data to allocate sales personnel. By seizing this direct benefit, a typical company can save enough money to fund the rest of its digital transformation – and create enough purchases and incentives to maintain momentum. This opportunity is the largest in the field of specialty chemicals and crop protection chemicals, but it is still attractive in the field of basic chemicals, petroleum chemicals and distribution.
By changing from traditional pricing and profit management to digital enhancement, the profit margin of chemical companies can be increased by 2-3 percentage points on average. Most of the value comes from the introduction of a dynamic pricing engine that takes into account data such as plant utilization, storage levels, and real-time customer needs.
Companies that want to take advantage of digital tools and capabilities to capture fast growth from less flexible competitors can increase their revenue growth by up to twice the market average. The most important initiatives may include creating first-class online sales channels; using advanced analytics to reduce customer churn, identify new customer leads, and support up selling; developing customer travel, attracting new businesses, cultivating loyalty, and increasing wallet share. The use of digital technology makes the sales process more efficient and the customer experience more attractive, which can improve customer satisfaction by 20% to 30%.
Take the first step of digital marketing and sales journey
We believe that business and business leaders should take four steps to start extracting value from numbers:
The discovery. First, identify and quantify tangible business opportunities for your chemical company. According to the value they provide, the digital maturity (or expected acceptance) of the market and the digital savvy of the enterprise, the first three to five items should be given priority. By motivating the team to start transforming around (and only around) these priorities. Set clear financial objectives and track implementation and value acquisition.
Design. Successful transformation requires close cooperation between business leaders and it experts in multiple rounds of rapid prototyping development. Good teams include coordinators who help companies solve their culture and work style by supporting the organization’s transformation to a dynamic work environment where people can experiment comfortably, adapt quickly, and learn from failures and successes.
At the same time, chemical companies need an agile and fast technology platform. Ensure that your traditional IT projects and digital marketing and sales transformation are properly supported by it. The success of such a transformation depends on agility, rapid adaptation, and experimentation – not on the characteristics of IT departments that are geared to conventional B2B business operations. Companies can build an agile digital IT support unit on top of their existing IT infrastructure to help meet old and new needs without affecting the business.
Delivery. If the solution requires a lot of investment or a long development time, you can outsource non core activities and work with professionals. This is particularly important in the digital field where things are developing rapidly. Ask who is the natural owner of the technology you need and how you can work together to secure access. A successful partnership will give both parties an advantage and ensure the fast delivery of the project. When executing a program, first run the test on a small part of your customer and product portfolio, and then do a full test. Start with the minimum viable product and then expand its functionality. Work with customers from the beginning to adapt products and services to their needs and build the digital maturity of the market.
Decrease. Maintain the highest standards in data hygiene – your digital platform is now part of your competitive advantage. Limiting implementation risks, one opportunity at a time, through a step-by-step digital roadmap. Avoid jumping into the big bang on the first day.
Digitalization has changed the way chemical companies operate. How much value individual enterprises can get from digital marketing and sales, and how fast they can get value, will largely depend on what their leaders will do next.