Business and Digital Trends in the Chemical Industry: Sales, Service and Marketing by hui-xiong and nchoi00
In this blog, we discuss specific topics in sales, service, and marketing that are associated with and derived from major business trends affecting the value chain in chemicals. For details, we refer you to the initial blog where we introduced the overall value chain. We concentrate on the following areas in which we address challenges associated with these trends from the perspective of both business considerations and SAP solutions:
Digital customer experience
2. Business trends and their impacts
2.1 Digital Customer Experience
The COVID-19 pandemic has introduced a new level of challenge for many companies with regard to customer experience. It has completely reshaped customer behaviour and forced companies to strengthen their customer experience. This challenge – together with increasing global competition and continuously high demands from customers for their products, operations, and services – makes it necessary for chemical companies to develop a next-generation customer experience. Companies that have a digital customer strategy are more resilient to continuously changing market demands and disruption. The chief marketing and sales officers of chemical companies focus on improving and digitalizing customer experience with the goal of providing excellent customer experience to improve customer retention, attract new customers, and grow business.
Typical customer experience trends that we are seeing in the chemicals industry are the increased use of customer data analytics and rising levels of collaboration and co-innovation, as discussed below.
Customer data analytics
In an era of digital transformation, customers expect companies to fully understand their preferences and needs. They expect a personalized approach across different physical and digital customer experience channels throughout the enterprise. Using the “segment of one” approach, companies track each individual customer’s activity across the entire customer value chain. They use available customer data to gain full transparency into each individual customer profile to provide a customer-centric approach. Customer data management and analytics play a key role in driving revenue for the company. The personalized insights drive better business outcomes and business agility in areas such as sales, service, and marketing. Companies can then make better decisions based on real-time customer data across the entire company.
SAP Customer Data Platform offers companies an enterprise-wide customer data platform to provide comprehensive customer insights by connecting customer data with operational data and real-time personalised engagements. The solution provides marketing officers with flexible tools to build an analytics dashboard capability that establishes personalised customer experience, activities, and events. The customers dashboard functionality offers 360-degree customer insights based on customer activities and events. It provides flexible, dynamic customer segmentation with real-time data at various points in time from different source applications. This, together with the SAP Commerce Cloud solution, offers companies real-time customer experience personalisation through the use of contextual and behavioural data analysis across the customer journey.
Collaboration and co-innovation
With the ongoing commoditization in today’s business environment, it has become increasingly important to use the available abundance of data to collaborate and co-innovate. In this “social era,” executive-level managers are aware that for companies to be successful, it’s all about connecting things, people, and ideas. On the internal level, teams across departments are working more closely together to create a consistent customer experience across all business processes and channels. In addition, departments need to work together intensively to improve the overall process and fix issues and challenges in a collaborative way to increase customer loyalty for the company. On the external level, chemical companies collaborate with third parties and customers to improve communication, innovation, and business outcomes.
Chemical companies focus on innovative products and services that meet customer needs. With machine learning and predictive capabilities, they can perform sentiment analysis based on customer-data analytics and aim to proactively identify opportunities for new products and trends. The direct involvement of customers in companies’ resource and development processes is pivotal for the success of the products while simultaneously allowing a faster cycle time to bring new products to market. Companies are looking for easy and flexible ways to collaborate with their customer in a secure environment that combines in-context data with co-innovation work through direct access to shared files and customer-specific workflows for preferences and needs.
The trends that we are seeing in chemical companies are aligned with customer experience strategies that are supported by SAP solutions, including SAP Customer Data Platform, SAP Commerce Cloud, and the SAP Service Cloud solution. With customer data solutions, you can connect and collaborate internally and externally while ensuring customers’ data privacy and compliance. The integration with the back-end ERP solution, SAP S/4HANA, provides customer insight across the value chain to enable extensive collaboration and co-innovation between chemical companies and their customers. These customer insights and technologies help companies provide superior customer experience and achieve revenue growth in the long term.
2.2 Operational Efficiency
Chemical companies are in critical need of efficiency to cope with increasing costs and margin pressure, and this is motivating them to embrace intelligent technologies to automate their processes as well as improve sales and marketing planning and delivery performance. In the meantime, the fast-developing technologies have offered new opportunities for chemical producers to automate processes and achieve operational efficiency by using intelligent technologies such as machine learning, artificial intelligence, and predictive capabilities across their sales, service, and marketing processes.
Typical trends that we are seeing in the chemicals industry are as follows.
In sales, service, and marketing areas, there is great potential to automate processes through the use of intelligent technologies – such as robotics, artificial intelligence, and so on – that aim to replace tedious actions or repetitive tasks. For example, sales personnel often have to handle prices changes for a large number of products and services and manually maintain these changes in a highly precise way. This requires extensive time and effort despite the lack of any added value. However, with the current digital technologies driving process automation, companies can manage and monitor prices automatically in mass volumes and validate results efficiently, giving sales personnel valuable time to focus on higher-value tasks such as building relationships with customers, improving customer satisfaction, and so on. Another example can be seen at service centers, where companies can use chatbots to deal with customer requests and deliver the information instantly with 24x7 availability to the customers, especially when the requests involve repetitive simple questions or pertain to orders status, product properties, and so on. In this way, companies can not only overcome the shortage and limited availability of human resources but also improve customer satisfaction.
The overall performance, profitability, and market growth of chemical companies will be based on enhanced speed and agility to adjust their strategy to the changes of customer needs and market trends. In light of this, there is a need for insights into the internal and external operational and market data that drives decision-making for better sales and market planning. This will allow companies to best accommodate customer and market needs. Chemical companies nowadays tend to use predictive tools to anticipate sales and market trends based on multiple criteria such as region, product, customer, and so on. These predictive analytics tools are embedded with machine learning capabilities that are trained to learn from large volume of historical data and then predict future outcomes based on new data. With these predictive capabilities, forecasts and reports can be generated to predict sales accurately, for example, so that sales personnel can set realistic goals for planning with greater flexibility. They can also help anticipate market changes and trends that can be used to develop better market strategies to grow business with collaboration planning and increased responsiveness. Overall, predictive analytics provide companies with opportunities to boost profitability and improve customer satisfaction by increasing flexibility and responsiveness.
SAP S/4HANA provides various SAP Fiori apps with predictive functionalities, such as Sales Performance – Plan/Actual for better sales planning and Incoming Sales Orders – Flexible Analysis, which provides reliable predictions for achievable sales volume and for market trends supporting management decisions.
Real-time alerting and monitoring
During the COVID-19 pandemic, chemical companies experienced major issues with market and supply chain disruptions that have had a significant impact on sales, service, and marketing areas. They have seen loss of sales and market opportunities due to delayed order fulfillment, lack of flexibility regarding unplanned orders, and unresponsiveness to customer needs. Digitalization benefits chemical companies by providing visualized reports and real-time data-sharing tools that help them gain full transparency of order fulfillment status. This allows sales personnel to proactively identify critical issues and collaborate with others to help ensure sales orders are fulfilled as quickly as possible. These real-time data-sharing tools can also generate real-time alerts with optional actions that sales personnel can take to prioritize tasks, helping avoid delivery delays and making sure corrective actions are taken in time. With such capabilities, companies can deal with market and supply chain disruptions more responsively and cost efficiently.
We consider these trends in providing solutions such as the SAP Fiori apps. For example, Predicted Delivery Delay provides insights on delivery performance and helps prevent possible delays, and Sales Order Fulfillment identifies any issues for order fulfillment.
Most reporting has traditionally focused on operational data (O-data) to provide insights to companies related to their performance and the effectiveness and efficiency of their processes. However, with the shift toward a more customer-centric approach, experience data (X-data) can provide companies with insights in terms of customer sentiment – feelings toward their brands and services. The combination of X-data and O-data together with the integration of advanced technologies is what gives companies full insight, allowing them to anticipate upcoming challenges, predict new trends, and respond as necessary, as shown in the figure.
How X-Data, O-Data, and Advanced Technology Provide Insight for Companies
Sustainability has become an increasingly high priority and a core value for many companies. This is particularly true of the chemicals industry, which is the starting point of sustainability for many other industries such as pharmaceuticals and agriculture. Customers and consumers know that sustainability is the right way forward and are supporting companies and brands that share similar values. They are looking for companies that empower sustainability and offer eco-friendly products and order fulfillment processes. This emphasis on sustainability can help transform communities to create a better, sustainable world and future.
There are two aspects of sustainability, as discussed below.
Transformational sustainability – Companies drive sustainability while expending long-term economic opportunities, using the latest technology and strong engagement and collaboration with their stakeholders to provide sustainable products and services. Sustainability is the new expectation of the customer and will also drive how companies operate their customer experience processes. Some examples include the co-innovation of green products. The marketing of these products and transparency with regards to the sustainability throughout the entire customer journey shows the commitment of companies to inspire their customers to a sustainable environment. You can read here about SAP’s goal to create a green customer experience.
Operational sustainability – This calls for transparency and optimization across end-to-end processes. Digital transformation and the growing number of advanced technologies have completely transformed the level of visibility across the order fulfillment process. This, together with available real-time, embedded analytics, enables companies to have full transparency throughout the order fulfillment process and optimize their monitoring processes significantly.
3. Conclusion and Outlook
In this blog, we discussed specific impacts of major business trends in sales, service, and marketing in the chemicals industry. We presented proposals and ideas that can help chemical companies manage challenges regarding improving customer experience to generate new business models. We discussed how chemical companies increase operational efficiency by using intelligent technologies. Finally, we discussed how companies can achieve sustainability as part of their digital transformation process. In the next blog, we plan to show the impacts of those major business and digital trends in relation to the supply chain.