Is Your Company Mistaking Technology For Digital Transformation?
Chemicals and building materials are arguably the foundation of the business world, making these industries ground zero for digital transformation. Four industry leaders recently met at the SAP International Conference for Chemicals in Madrid, where they explained why information is most powerful when it’s shared between trusted partners, and how organizations in business networks are sparking sustainable innovation.
Digital transformation is a corporate-wide trek spanning people, processes, and data inside and outside company walls for continuous business innovation.
getty
Joining data forces to create a sustainable world
Doerte Lorenz, senior manager of sustainable procurement at Lyondellbasell, a global chemical company headquartered in The Netherlands, said that her company has long been on a digital journey that has kicked into high gear with deep transparency for renewed business speed.
“Sustainability to improve the world and reduce emissions means that we have to share data across our value chain,” said Lorenz. “We need big picture insights from the entire network. We have to be fast and agile with solutions — much faster than in the past.”
Everyone on the roundtable agreed that digital transformation was a corporate-wide trek spanning people, processes, and data inside and outside company walls. Lorenz held up sourcing as an example of how digital transformation fundamentally changes company norms.
“Sustainable procurement is all about digitization. We began with SAP Ariba, and it’s a mindset change,” she said. “We can combine quality emission and supplier data…putting algorithms behind it to get the right reports and pass that on to partners and other organizations…You change the organization to focus on the strategic networks and partnerships with your suppliers.”
Move past digital buzzwords to future-focused mindset
Thomas Meinel, senior vice president and head of indirect procurement at Evonik Industries, shared a three-pronged perspective on digital transformation, based on his experiences in IT, business processes, and procurement. Evonik Industries is a leading specialty chemicals company based in Germany that has moved to SAP S/4HANA. He noted that while digital transformation has been a buzzword for a number of years, people have to be open-minded to make the most of technology advances that can profoundly change how business operates.
“We might begin by talking about transforming our organization based on digital technology, but…you don’t know exactly where you’ll end up as you gain new insights,” said Meinel. “Collaboration between people is even more important to use technology so [people have] the mindset, skills, and culture to implement transformation…you also have to establish a culture where everyone believes that everything might change in the future.”
Circular economy depends on inclusive platform
Daniel Pereira, director of digital corporate technology, sustainability, and circular at Eastman, talked about his organization’s transformation programs that included products and services development, R&D, operations, customer relationship management, and sustainability. Eastman is a global specialty materials company headquartered in the US. Commenting on the reality that smaller organizations may still rely on paper-based systems, Pereira emphasized the importance of welcoming organizations of all sizes into collaborative networks.
“At Eastman we exist to improve lives in a material and digital way… simplifying and automating processes…so employees get home on time to be with their families,” he said. “We’re looking at digital to enable our circular platform…for traceability and transparency…Even in a digital world, there are still a lot of players that aren’t digitized. With a collaborative, affordable platform that everyone in the chain can easily use, we’ll enable the circular economy.”
Marketplaces speed up collaboration in a hyperconnected world
Carlos Augusto Mantilla Espinosa, IT director at Cemex, a multinational building materials company based in Mexico, said that his organization’s digital transformation was well underway. Cemex has aggressive goals to reduce CO2 emissions, and is exploring alternate fuels like solar energy, production materials, and supply chain strategies with a variety of partners in different industries.
“Cement is a conservative business, but we’re doing well…moving into smart operations,” said Espinosa. “We are transforming the customer experience, operations, and back office support services for employees for greater empowerment. With the ability to connect data and people, we can address supply chain and other disruptions.”
Digital transformation spells continuous progress
Stefan Krauss, senior vice president of discrete and energy industries at SAP, said that technology has sufficiently advanced with cloud-based platforms and innovations like AI and blockchain to make business networks collaborative hubs of invention. He cited the Catena-X Automotive Network as an example of how organizations in industry-specific value chains are securely exchanging information between companies, often crossing traditional market boundaries.
“There are chemical, metal and other companies in that network. It’s not limited to one industry,” he said. “We discuss sharing data in a secure and controlled way so everyone can use the data in the right way.”
Making digital transformation a catalyst for innovation takes much more than just bringing in new technologies. The next decades of innovation won’t be contained inside the IT department or any one company alone, regardless of size and long held industry borders. Automation is the first step in a journey where no one can predict the results, and success is predicated on progress that never ends.
Learn more about how mill products and mining companies are digitally transforming: download the Futurum survey results.
