Digital Transformation: Are chemical enterprises ready?
As the global chemical industry prepares to embrace digital transformation, many challenges and obstacles can impact the decisions of senior executives. Based on findings from the inaugural 2016 Global Digital Chemistry Survey, this article intends to mitigate many negative perceptions related to digital transformation and recommend specific steps to navigate through its challenges and realize its benefits.
Catalyst for innovation
In recent years, increased competition, changing customer needs, evolving regulatory environment, and dynamic cost equations have weighed heavily on chemical enterprises, creating a progressively challenging environment. As a result, many chemical enterprises are focused on reinventing their business and operating models through transformational trends emanating from other industries. As many global industries and sectors embrace digitization in areas ranging from business processes to customer relationship management, digital transformation is becoming a smart business objective beyond just improving the core of the business. The global chemical industry can benefit from such transformation, which can act as a catalyst to unlock enterprise-wide business innovation.
The real objective of digital is to help transform the entire organization by identifying an effective, enterprise-wide, digitally-enabled business transformation roadmap including:
a) Assessing the maturity in terms of business innovation and digital (and exponential technologies) adoption
b) Enabling greater collaboration, internally and externally, among organizational functions
c) Understanding the value generated by the business transformation
And while doing so, chemical enterprises will likely recognize that digital can serve as a unique catalyst to rally the entire organization around continuous innovation and value creation. Digital is not only expected to unlock the innovation potential of chemical enterprises, but also enhance the full spectrum of shareholder value (revenue growth, operating margin, asset efficiency, as well as other company strengths such as sustainability and safety).
Approaching digital transformation
Many ad-hoc approaches and experiments with digital and exponential technologies are underway in the global chemicals industry. Yet, many chemical enterprises are unsure about the advantages that can result from a digital revolution and are cautious towards an enterprise-wide digital makeover.
Challenges facing chemical enterprises that may limit them from achieving digital excellence, include:
- Current digital responsibilities are misplaced
- Change management to ease workforce adoption of the digital agenda appear absent
- The critical role of cyber security, talent management, and strategic alliances have not been fully recognized
- Digital opportunities are expected the most in business operations, sales, and marketing in the short term
Yet a fair share of chemical enterprises in the Deloitte Global 2016 Global Digital Chemistry Survey do realize the growing importance of digital initiatives in boosting their innovation potential, but the vast majority focus on the data aspect. Senior leadership in chemical enterprises have the opportunity to proactively drive a digital culture, which will likely help chemical organizations innovate and eventually enable complete transformation focused on business growth and operations.
Five enablers identified to augment digital initiatives
The following recommendations, derived from the results of the Deloitte Global 2016 Global Digital Chemistry Survey and industry observations, can help chemical enterprises in augmenting their digital strategies:
- Build a robust transformation process, starting with a clear digital enterprise strategy
- Enable enterprise-wide scalability of digital by establishing a sustainable insight-driven strategy that builds and strengthens internal capabilities
- Create a structured approach to identify risks in complex and dynamic ecosystems
- Establish agile operating models that can engage newly prioritized resources to plan, execute, and manage digital activities
- Embed continuous innovation into a culture that supports new ideas and encourages learning