The Chemical Industry is Ready for the Digital Transformation. So Why Hasn’t It Happened Yet?

The Chemical Industry is Ready for the Digital Transformation. So Why Hasn’t It Happened Yet?

Jay Bhatia

CEO - Agilis Chemicals Inc

The technology is here. The time is now. Everyone else is doing it. So, why hasn’t the chemical industry jumped on the digital bandwagon yet? Why is it that most chemical companies continue to buy and sell their products the same way they did two decades ago, willingly foregoing the power and convenience of online platforms in favor of emails, faxes, and handshakes? Haven’t they felt the urgency to “digitize and optimize” like so many others have done across industries?


Well, actually, they have. The lack of urgency or importance is not what’s keeping chemical producers from investing in digital platforms. For the most part – it’s about the money. Despite advances in digital technology, the actual task of building and maintaining an online commerce platform remains a complex and elaborate undertaking. A typical medium-sized chemical company doesn’t have the resources, expertise, or bandwidth to design, develop, test, and launch a full-featured commerce platform. Their staff doesn’t include engineers, testers, security experts, or user interface designers. And even if they were to temporarily bring all those experts onboard, by the time they are done developing the strategy, acquiring the tools and building the actual product (which typically takes 18-24 months), technology would have moved on, and their needs would likely have changed. It’s difficult to justify the cost, the effort, and the wait for a solution that may never deliver the anticipated value and would require ongoing additional investments.


For large corporations, funding a custom development project may not be a problem, but the simple fact remains – few companies in the chemical business can count building, integrating, maintaining, and continuously upgrading commerce portals among their core competencies. Sure, several large companies have successfully built online platforms for their product portfolios, but these largely function as internal tools or product catalogs. Buyers who are searching for specific products are not likely to go looking on each suppliers’ individual portal to find what they need, so these company-specific portals can hardly fill the role of commerce engines.


If building it yourself is not an option, then the most obvious solution is to subscribe to a third-party platform, right? Of course, that’s not so simple either. In my previous post, I started to explain why standard online marketplaces aren’t a good fit for the chemical industry. Off-the-shelf solutions are not able to support the nuances of the chemical buy and sell processes, nor are they designed to add value to all players in the chemical distribution chain.


At Agilis, we often hear the same story: the industry is ready for digitization, but chemical producers, buyers, and distributors haven’t yet found a solution that fits. That’s why the Agilis’ value proposition is being so well received by the chemical industry. We built our platform with the goal to digitize existing supply chains and established business practices. We don’t try to force a new model on an industry that has developed processes that work well for their unique products and applications. We know that buying and selling industrial chemicals will never be the same as trading in consumer goods. This industry is built on trust and domain knowledge. And at Agilis, we believe that we have the solution – purpose-built for this market, and with the right amount of flexibility – to help usher the chemical industry into the digital age.

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