Chemicals Companies to Increase Spend on Digital, with Cloud Computing and Analytics Expected to Generate the Highest ROI
chemicals companies’ investment in digital technologies will rise sharply in the next three years, with cloud computing and big data analytics expected to generate the highest return on investment, according to a new survey by Accenture.
Almost all (94 percent) of the chemicals industry executives surveyed plan to increase their digital spend, with more than half (54 percent) projecting a significant rise. More than three-quarters (77 percent) believe that the best returns will come from cloud computing (44 percent) and big data and analytics (33 percent).
Accenture surveyed more than 150 C-level executives and top management across the chemicals industry globally and found that a digital agenda is increasingly driving strategic decision making and commanding C-level support.
The great majority of the executives (94 percent) agree that digital technologies will revolutionize the way they conduct business to a degree similar to the advent of the Internet in the 1990s. Additionally, 87 percent said that those companies that do not embrace digital will lose their competitive edge and may face extinction.
“We’ve entered the age of a different kind of Internet – the Industrial Internet of Things, where sensor-driven technology and intelligent machine applications enable communications between a company’s assets, products and systems that were never possible before,” said David Abood, global managing director of Accenture’s chemicals and natural resources industry group. “But to drive business value, companies need the data and advanced analytics capabilities that allow them to make better, faster and more-informed decisions, while using cloud computing to improve the efficiency of this data and systems management.
“The chemicals industry is already facing significant logistics and supply chain challenges as a result of the shale oil and gas boom, not to mention the continued pressure – on companies and governments – to reduce carbon emissions,” he added. “Applying a combination of digital technologies can help companies respond to these market shifts by changing the way they operate, becoming a digital enterprise while also improving the safety of their operations, driving efficiency and reducing costs.”
Most chemicals company executives surveyed (58 percent) are embracing digital to gain a competitive advantage over their industry peers. They believe that over the next five years, the biggest benefits from digital will include improved productivity (25 percent), redefined product development (24 percent) and impact on customer relationships (22 percent). And over the past three years, 90 percent said, their organization has increased its investment in employees dedicated to digital.
“Within a decade, potentially half of a typical company’s workers will be ‘digital natives,’” Abood said. “They will be accustomed to convenient and easy digital interactions in their personal lives and will expect the same kind of experience at work. We are seeing an increase in focus on improving customer experience and adopting a broad range of digitally enabled processes and practices to meet these customer expectations. These changes can give companies a powerful opportunity to differentiate, increase customer satisfaction and compete more effectively.”
The study adds to the growing portfolio of industry research and insights on this topic, including the recently published Accenture report, Driving Unconventional Growth through the Industrial Internet of Things (IIoT), which explores new top-line growth opportunities in digital services enabled by the IIoT. This report also outlines seven steps companies can take to generate new revenue-producing products and services from the vast amounts of data they have at their disposal.
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