A new era for the chemicals industry: Cloud computing changes the game

A new era for the chemicals industryCloud computing changes the game

2Copyright © 2014 Accenture All rights reserved.

A new era for the chemicals industryCloud computing changes the game

Multiple drivers for cloud adoption in the chemicals industry

Cloud computing adoption moves up the stack

Six ways cloud computing will change the game

Journey to the cloud


Multiple drivers for cloud adoption in chemicals industryHow cloud computing changes the game

Emerging trends are driving chemicals companies to improve their agility, reduce costs, and boost speed and responsiveness. These can be achieved through transforming their business into a cloud-enabled digital business. Key drivers for the shift include:

Increasing importance of emerging markets that need to be penetrated quickly and cost effectively.

Increasingly complex and diverse global supply chains, where higher speeds and visibility are required for responsive collaboration.

Rise of the green agenda is driving companies to lower energy consumption and emissions and, comply with environmental norms.

Rising commoditization has created a demand for differentiation through innovation in products, processes and business models.

Growing infrastructure investment, cost and time pressures are forcing companies to create greater operational and cost agility across the enterprise.

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The chemicals industry starts its cloud journeyCloud computing adoption moves up the stack

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To leverage cloud technology, chemicals companies are overcoming barriers to cloud adoption and moving up the IT stack.

Cloud solutions are deemed secure by many governments.

Example: While the Federal Cloud Computing Initiative1 in the United States drives cloud computing adoption at a federal level, public sector bodies—under UK’s “cloud first” policy—need to consider cloud solutions before any other option2.

PaaS solutions help companies build custom differentiations to business processes. A hybrid model enables companies to leverage their existing IT investments in legacy systems while reaping benefits from cloud-based solutions.


The chemicals industry starts its cloud journeyCloud computing adoption moves up the stack

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Cloud adoption is both accelerating and moving up the IT stack.Moving up the cloud stack:

• Chemicals companies move to IaaS to reduce costs and use virtualization to create a private cloud architecture.

• The companies use SaaS in customer relationship management (CRM), through offerings such as the Salesforce.com suite and in procurement through solutions such as Ariba.

• Wide SaaS adoption and growing PaaS uptake will lead to chemicals companies using BPaaS solutions.

• Example: By adopting a cloud-based e-invoicing service3 Dow Chemical was able to meet different national requirements across 17 European nations through one service provider.

Cloud computing—combined with complementary and convergent technologies such as mobile, analytics and social media capabilities, and related elements such as remote online sensors, biometrics and unmanned drones—provides the hard business benefits that chemicals companies need to justify investment in cloud technology.


Dedicated hosting On-premises (company data

centre or off-premises (3rd party) Virtualized infrastructure,

applications and communications

Infrastructure

Platform

Application

Business Processes

IaaSPaaS

SaaSBPaaS

All of these forms of cloud can provide computing “on demand” at one or more of these four stack levels

Service models

Private clouds

Cloud computing: a primerClouds generally take one of a combination of four forms

Shared utility hosting Off premises Provided by external 3rd parties

over a network

Publicclouds

Blend of shared utility hosting and dedicated hosting

Retain confidential information privately while providing access to the wider choice of public cloud applications and platforms

Hybridclouds

Collaborative resources shared between organizations with common requirements & interests

Often in the same industry Costs are spread across users

Communityclouds

How cloud computing will change the gameSix dynamics

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1. Real-time remote, predictive and mobile asset monitoring and maintenance

2. Integrating, sharing and analysis of Big Data

3. Enhanced employee health and safety and remote medical monitoring

4. More efficient, agile and secure IT

5. Faster, smoother and more effective skills transfer,knowledge sharing and R&D

6. Empowering new entrants from emerging markets

Asset monitoring and maintenanceReal-time remote, predictive and mobile capabilities


Chemical companies’ major production facilities and pipeline systems run 24/7. Unplanned shutdowns can result in huge disruption costs.

Advanced, remote and mobile monitoring sensors can collect real-time data across the chemical plant and combine it with other information, such as weather and geological conditions, to create a flow of Big Data around asset health and risks.

Using cloud-based predictive analytics, a company can identify patterns in the collected data and issue failure warnings that help avoid unplanned outages

Cloud-connected remote-controlled drones can be used for chemical plant asset surveillance. Feeding surveillance information into a cloud-powered analytics engine will enable proactive and preventive maintenance.

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Value chain transformationIntegrating, sharing and analyzing Big Data along the value chain to transform visibility, speed and agility


As chemical companies expand their operations, supply networks and customer bases across the world, their supply chains are becoming ever more diverse, complex and distributed.

Global integration: Cloud’s scalability, flexibility and device agnostic connectivity enable chemicals businesses to get a globally integrated view of their logistics in real time without massive up-front investment.

Supplier collaboration: Sharing information with suppliers and customers on the cloud helps supply chains operate with greater visibility, speed and agility, enabling integrated co-development.

Big Data utilization: Applying predictive analytics to supply chain data would enhance businesses’ ability to predict and prevent logistical problems and bottlenecks.

Microsoft launched a chemical industry reference architecture (ChemRA) that helps companies implement secure IT solutions, provide enhanced business insights and user experience, and allow easy collaboration.4

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Solutions leveraging a combination of cloud, mobility and analytics with technologies such as remote sensors can transform occupational health and safety.

Employee health monitoring: Mobile, cloud-connected sensors, attached to protective clothing, can provide constant coverage and monitoring of employees’ physical condition, along with GPS tracking of their location.

The resulting data would be subject to continual cloud-based analytics to predict health threats and initiate responses locally.

Remote medical assistance: Cloud and mobile platforms can support remote medical assistance in the event employees are involved in an incident. This will enable doctors across the world to run scans and review medical sensor data to recommend treatments.

Recruitment differentiator: Chemicals companies’ ability to protect the health and well-being of their employees by leveraging cloud technology will become a major differentiator in the recruitment market.


Employee health and well beingEnhanced employee health and safety, remote medical monitoring and assistance

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Powerful analytics, massive data storage and processing capabilities are becoming vital drivers of competitive advantage. The costs of processing and analyzing the required mass of Big Data are too high for a single company to bear alone.

Community cloud: By shifting enterprise resource planning (ERP) systems and internal data centers to a shared “community cloud”, chemical companies can reduce costs by exploiting flexible, pay-per-use payment models.

• Example: Italy-based global chemicals group, Mossi & Ghisolfi has built a simplified, scalable and just-in-time cloud-based IT model to support its business solutions running on SAP5.

Data security: By joining the community cloud, chemical companies close many windows of access that currently exist in their own systems, and allow cloud providers to concentrate leading-edge security knowledge and capabilities on reducing the platforms’ “attack surface.”

Mergers and acquisitions (M&A): The industry-wide community clouds will make M&A quicker, easier and less costly, by enabling operations to be plugged into and unplugged from sharedcloud engines, reducing the need for complex and expensive systems integration following a merger.


More efficient, agile and secure IT Using common industry platforms and utilities based on “community clouds”

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Chemical companies need to ensure that vital knowledge and insight is smoothly and effectively transferred as older workers retire in an age where there is a rising use of mobile devices and new technologies.

Cloud platforms, powered by mobile and data analytics, will play a central role in enabling chemicals companies to capture, share and transfer skills in a systematic and targeted way across the workforce.For example, cloud-enabled two-way video links on mobile devices could:

• Allow an expert to inspect and suggest actions to correct malfunctioning equipment in realtime anywhere on the planet.

• Enable delivery of one-to-many learning through any device in any context and location, at whatever time employees choose.

Industry example: Specialty chemical manufacturer Clariant is using Ariba’s6 cloud-based accounts payable solution to support a smart procurement process that reduces errors, speeds up approvals and drives compliance.


Robust knowledge managementFaster, smoother and more effective skills transfer, knowledge sharing and R&D

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Across the world, cloud solutions—especially combined with mobile—are democratizing access to data, knowledge and applications by making these more easily accessible at lower cost to a wider range of organizations and individuals.

Emerging market companies: Cloud enables new players from emerging markets to grow and seize local opportunities without relying on the expertise of the incumbent industry leaders from developed markets.

Early adopter advantage: New-generation emerging market companies will reap the early adopter benefits of cloud solutions, while many of their counterparts in developed markets struggle with the business case for writing off past investments in IT infrastructure and switching to the cloud.

Building skill bases: A new wave of chemicals companies in the emerging markets will provide incentive for western universities to set up campuses in those countries to build up skill bases - a trend that will be fostered by universities’ rising use of cloud and mobile technologies.


Winning in emerging marketsEmpowering a new generation of dynamic chemicals companies

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As chemical companies’ usage of cloud grows, they are on a journey toward using cloud’s unique attributes as an ever greater source of competitive advantage.

Accenture’s cloud maturity model helps chemical companies map their path to cloud maturity—chemicals executives can pinpoint their organization’s stage in the journey, assess the upcoming opportunities and plan their best next steps.

The model divides the journey to cloud maturity into three main phases starting with commodity IT, such as email and storage, then stepping up to functional applications, such as business intelligence (BI) and procurement, and, finally progressing to core business applications in the cloud, such as CRM and billing.

At the same time, the company’s objectives in using cloud also mature, progressing from a focus on costs to ad hoc strategic enablement, finally making cloud an integral part of the strategy.


Journey to the cloudCloud maturity model for the chemicals industry

Journey to the cloudAccenture’s roadmap and maturity model for chemicals companies

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CRM and customer insight Supply chain management Asset management External use of social media

Trading BI and reporting Enterprise asset management Procurement, HR and finance Internal use of social media

Document management for compliance Email Collaboration tools Storage and compute1

2

3

Extent to which cloud isa source of competitiveadvantage

Uncertainand rivenwith change

Data-rich,social andanalyticsenabled

Collaborativeand suffusedwith M&A

Reduce IT TCOand capitalexpenditures

Ad-hoc strategicenabler

Integral part ofstrategy developmentand execution

Core businessapplications

Functionalapplications

Commodity IT

Extent to which cloud computing is a source of competitive advantage

Scope

Value lever

1

2

3

Capital intensiveand costconstrained



Journey to the cloudRealizing the opportunity: the cloud services broker

Large chemical companies are unlikely to migrate all of their data, applications and systems to the cloud. Factors including high cost considerations and IP concerns will ensure that cloud adoption does not happen in one “big bang”.

This means that companies will find themselves managing a rich hybrid blend of traditional applications and infrastructure—possibly virtualized as private cloud—and cloud computing solutions across public, private and/or community clouds.

To source, manage, integrate, govern and coordinate these various internal and external cloud and non-cloud services, the IT function or an external provider will need to act as the company’s “services broker”.



The services broker should help meet IT needs across the business by integrating and offering a wide range of cloud services—from IaaS to PaaS, and from SaaS to BPaaS—alongside legacy in-house systems.

The role of the services broker—part process, part technology—includes:

Selecting and negotiating the sourcing of cloud services from cloud service providers

Aggregating, automating and integrating services

Managing demand, workload and governance

Creating and maintaining a service catalog that end users across the business can choose and buy from

The potential benefits of this model include the delivery of the right applications solutions to the right users at the right time, stronger and more consistent governance and security management, and reduced total costs of ownership.



To prepare for the journey to a hybrid, cloud-enabled environment and a services broker model, chemicals companies first need to look holistically at their entire IT environment and find ways to simplify it. Companies should:

Invest in the right architecture, tools and governance to fully leverage the benefits of cloud

Simplify IT architecture, services and the business processes they underpin—virtualize infrastructure, drop redundant applications

Pilot new cloud-enabled mobile and analytics platforms in specific segments or geographies, at low risk and cost, before scaling up globally.


TakeawaysCloud enables executive teams to change the game

Cloud computing presents major opportunities for chemicals companies. When combined with mobile technology and analytics, it stands to change the game in the chemicals industry.

To succeed in this technology-driven game, chemical companies need to commit to an ongoing journey to cloud enablement.

Companies that invest now in planning and preparation for the cloud will be able to establish an early lead over their competitors—or run the risk of finding themselves struggling to catch up with their cloud-powered competitors in the years to come.

References


Go Back

1. Info.apps.gov, a service provided by GSA,About FCCI, info.apps.gov/node/2.

2. UK Cabinet Office press release, “Government adopts ‘Cloud First’ policy for public sector IT,” May 5, 2013, www.gov.uk/government/news/government-adoptscloud-first-policy-for-public-sector-it.

3. Gartner, “A Quick “International Invoicing at the Chemical Giant Dow Chemical,” 2012, www.authentidate.de/fileadmin/pdf/Anwender/en/ EN_AD_Success_story_Dow_Chemical.pdf.

4. Microsoft press release, “Microsoft Launches the Chemical Reference Architecture Initiative,” September 20, 2011, www.microsoft.com/en-us/news/ press/2011/sep11/09-20ChemPR.aspx./

5. SAP Business Transformation Study, Mossi & Ghisolfi, “Achieving Agile, Scalable, Cost-Effective, and Consumption-Based IT Using the Cloud,” www.google.co.uk/search?client=safari&rls=en&q=Mossi+%26+Ghisolfi+cloud+SAP&ie=UTF-8&oe=UTF-&gws_rd=cr&redir_esc=&ei=uyj2UeqFK4imhAfMwIA4.

6. Clariant/Ariba press release, “Clariant Transforms Invoicing with Ariba,” November 15, 2011, www.businesswire.com/news/home/20111115005183/en/Clariant-Transforms-Invoicing-Ariba.

Appendix

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• Accenture at a glance• Accenture cloud services• Accenture technology vision

Accenture at a glance

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• More than 293,000 people serving clients in more than 120 countries

(Aug. 31, 2013)

• We deliver services and solutions through 17 focused industry

groups in five operating groups.

• A network of more than 50 delivery centers around the world with

over 122,000 resources

• NYSE (ACN), Revenue US $28.6 billion for fiscal year ended

Aug 31, 2013

• Accenture was added to the S&P 100 in March 2012

• Ranked No. 1 in the International Association of Outsourcing

Professionals' (IAOP) list of the world's top outsourcing service

providers for the fifth year in a row.

• $800+ million in training annually

• $500+ million on R&D

• 99 of our top 100 clients have been clients for 5 years;

92 have been clients for at least 10 years

• Clients include 92 of the Fortune Global 100 and three-quarters of

the Fortune Global 500

Summary Investments

Enduring relationships

Thought LeadershipJourney to the cloud

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A New Era for the Chemicals Industry: Cloud Computing Changes the Game The Digital Chemic

al CompanyNavigating the Digital Divide in Chemicals

Getting Serious About Analytics: Better Insights, Better Outcomes

Digital Enterprise Services for Chemicals

http://www.accenture.com/us-en/Pages/insight-cloud-computing-changing-game-chemical-companies.aspx




http://www.accenture.com/us-en/Pages/insight-digital-chemical-company.aspx

http://www.accenture.com/us-en/Pages/insight-digital-chemical-company.aspx

http://www.accenture.com/us-en/Pages/insight-navigating-digital-divide-chemicals.aspx

http://www.accenture.com/us-en/Pages/insight-navigating-digital-divide-chemicals.aspx

http://www.accenture.com/us-en/Pages/insight-analytics-actionable-data-insights-summary.aspx




http://www.accenture.com/us-en/Pages/insight-digital-enterprise-services-chemicals.aspx



Services and thought LeadershipAccenture cloud

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Using an IT resource no longer depends on having the capital to own that resource, thanks to cloud computing.

As competitive dynamics shift, Accenture can help your organization to map its path to the cloud.

www.accenture.com/cloud


http://www.accenture.com/cloud


From Digitally Disrupted to Digital DisrupterAccenture Technology Vision 2014

Digital-Physical Blur

Architecting Resilience

From Workforce to Crowdsource

Data Supply Chain

Harnessing Hyperscale

Business of Applications

• Video• Exec Summary• Trends Summaries• Full report


Cloud computing can enable this digital transformation

www.accenture.com/technologyvision

http://www.accenture.com/technologyvision

Contacts

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For more information on how Accenture can help you with cloud in the chemicals industry, please contact:

Amanda ShoemakerCloud Sales Enablement, Resources – [email protected]

Clive BroadCloud Sales Enablement, Resources – [email protected]

Gaurav SharmaCloud Sales Enablement, Resources – [email protected]


mailto:[email protected]

