Sadara Company’s Digital Transformation

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Table of Contents

Introduction
Digital Transformation
Key Factors for Digital Transformation
Best Approach to Transformation and Digitalization
Digital Business Model
Added Value
Showing the Added Value to the Company
Implementing the Approach for the Client (SADARA)
Conclusion
References

Introduction

The digital transformation and the transition to the online environment used to be seen as the prerogative of the organizations that provided solely the services that could be easily translated into the online context due to the absence of direct physical interactions between the end user and the end product or service. Specifically, organizations offering educational opportunities, computer software, and similar products appeared to be the primary audiences for which targeting the digital setting. However, with the rapid development of the online market platform and the digital services having become ubiquitous in every industry, most companies must consider entering the digital realm, which usually poses a range of challenges due to the lack of preparedness. Although SADARA operates in the chemical industry, which is not related to the digital market directly, the organization needs to build a well-functioning supply chain within the digital realm and transition to the digital context seamlessly due to the opportunities for enhanced interaction with customers and business partners, as well as streamlining its organizational processes and managing quality more effectively.

Digital Transformation

When considering the specific changes that SADARA will have to undergo in order to enter the KSA digital economy realm, one should consider applying E2E digital transformation framework as the most effective strategy with the greatest potential. The concept of E2E is fairly simple since it presupposes eliminating any intermediary between a chemical company and its end customer, thus streamlining the process of service or product delivery (Ivanov et al., 2020).

Therefore, the digital transformation in question will have to be viewed as a threefold process, which will include the enhancement of the company’s communication, increase in quality management, and the improvement of the organization’s supply chain with its further expansion. In fact, the three processes in question are closely interrelated. Specifically, the improvement of the supply chain will require increased quality of communication, similarly to the manufacturing process, so that the number of errors and defects could be minimized. Lastly, innovative communication tools will have to be used to encourage the dialogue between the company and its customers, thus managing possible complains and improving the quality of service consistently.

Therefore, apart from other transformations, the creation of a digital application that will allow SADARA to receive feedback from its customers will be strongly required. The application will help to respond to complaints and suggestions for quality improvement in real time, thus building the company’s reputation in customers’ eyes and increasing SADARA’s presence both in the KSA and global chemical markets. Specifically, the application in question should provide an opportunity for gathering feedback from customers as the source of further insights fr improving the quality of service and the products delivered to end customers.

However, the transitioning to the agile framework and the incorporation of both incremental and disruptive innovations into the set of tools that the organization uses to manage its operational, processes, sales, communication, and other critical parts of its supply chain management (SCR) and customer relations (CR) should be regarded as the priority for SADARA presently. Thus, the firm will be able to morph into an improved version of itself and address the requests of its buyers more effectively.

Key Factors for Digital Transformation

On the surface, the idea of digitalizing the products and services offered by the companies representing the chemical industry does not make a lot of sense due to the rigidly practical application of the specified services and products. Namely, the chemical compounds produced by the identified type of organizations are used for specific purposes, of which basic chemicals constitute the largest portion, followed by the products for life sciences, then, to a lesser extent, by specialty chemicals, and, finally, a small percentage of consume products (“Who we are?,” 2021). However, even though the product itself cannot be digitalized, chemical companies, such as SADARA, can introduce digital tools into their supply chains and participate in the online economic setting actively to enhance their supply chain and communication efficacy, as well as improve quality control. Therefore, SADARA will benefit significantly from the integration of the model for digitalizing commercial operations.

The rise in the opportunities for communication and marketing that the use of digital tools and the e-market, in general, provides must be seen as the primary factor in opting for digitalization for SADARA. By incorporating innovative tools for digital communication and collaboration, the company will be able to expand, embrace the opportunities of cross-disciplinary and cross-cultural communication, and, eventually, promote the culture of shared knowledge in its setting. As a result, SADARA’s information management quality will rise, leading to better product quality management and enhanced customer communication, with the ultimate rise in the firm’s global performance. Overall, the proposed change will allow SADARA to reduce costs substantially since the process of transferring critical data will be simplified, and the threat of crucial information being omitted, with the resulting disruption in the deadlines, will be avoided successfully. Consequently, the speed of the product delivery will improve, which will help the organization to build an even stronger reputation in the target market.

Best Approach to Transformation and Digitalization

One of the main challenges that SADARA is going to face when implementing the digitalization process and transferring of the online environment will be to ensure that every aspect of its performance is altered accordingly and coordinated with the innovations that will be implemented in its SCM and marketing domains. Therefore, a comprehensive model that will allow embracing every aspect of the corporate processes, from manufacturing to HRM to customer relations, must be aligned with the newly designed framework and represent a coherent structure. Studies show that the specified task remains one of the main impediments for organizations aiming at digitalization of their products and services (Caputo et al., 2021). Therefore, the digitalization process should be taken to the level of corporate governance and implemented at the specified scale so that the organization could embrace every advantage of the digitalization process without experiencing challenges while adjusting every aspect of its performance to the new approach.

Specifically, the proposed framework includes four major sections, namely, the introduction of the agile SCM framework as the means of collaborating with business partners, the enhancement of customer experience by means of improving communication and promoting customer innovation, introducing automation for suppliers, and integrating new digital models for improving key performance aspects. The latter element of digitalization will focus specifically on the promotion of incremental improvements and innovation across the organization so that SADARA could response to innovative solutions immediately and incorporate them into its performance correspondingly.

Digital Business Model

Since digitalization lies at the core of the described process, it will be logical to start the transformation with the development of a new business strategy that will be rooted in the digital approach. For SADARA, the specified change will require the application of the end-to-end (E2E) digital transformation. By definition, the proposed approach will allow limiting the extent of expenses due to the Ivanov et al. (2020), while also improving customer experience by enhancing the communication between the customer and the organization. The E2E model implies the digitalization of the B2B framework, which SADARA is currently employing (Ivanov et al., 2020). Specifically, the E2E approach will allow the organization to create a seamless management process for all key tasks due to the inclusion of a digital framework that will incorporate control tools for the respective areas, such as manufacturing (quality assurance and defects identification), customer communication (feedback analysis and customer support), and communication across the supply chain (deadline management, task allocation, logistics processes, and the related concerns). Indeed, according to Ivanov et al. (2020, p. 6), E2E primarily suggests “automation and integration of production and managerial process in a single information system. “Consequently, with the implementation of the E2E framework as the vehicle for the digitalization of the company and transfer to the new mode of functioning, SADARA will be able to attract the attention of key stakeholders and win their trust by offering improved service quality.

Added Value

To ensure that SADARA will still have a noticeable competitive advantage within the digital market of the chemical industry, it will need a combination of IoT- and AI-based business strategies for maintaining product and service quality while keeping an eye on the essential trends and be able to forecast changes in customers’ demand.

Specifically, the application of the IoT will allow SADARA to enhance its asset utilization by purchasing updated technology, including smart machines that will provide complete automation of the production processes, therefore, minimizing the probability of an error occurring at the manufacturing phase. Moreover, in case of an unexpected issue emerging in the process, the integrated IoT framework will allow adjusting the rest of the processes accordingly so that the change in question could not affect the overall quality of the end product (Abou-Foul et al., 2020). Namely, measuring the precise quantity of the ingredients, ensuring that the product has the necessary chemical and physical properties, and that the manufacturing process aligns with the preset standards of quality will become significantly easier once the IoT framework is included into SADARA’s functioning (Abou-Foul et al., 2020). Similarly, the inclusion of AI into SADARA’s operations will help to forecast the key market trends and changes in customers’ demands quite accurately. The described changes are believed to create the added value needed for the organization to compete in the global market successfully.

Finally, it will be vital for SADARA to incorporate an amalgamation of an innovation management strategy based on both incremental and non-incremental approaches. Specifically, while SADARA will need a strategy that will allow it identifying innovative trends and disruptive innovations in technology and communication, simultaneously developing a framework for incorporating the emergent tools into its processes to offer improved products and increased quality of services. The specified framework will need to become the main competitive advantage and the key selling point of SADARA’s products in the chemical industry market.

Showing the Added Value to the Company

Over the past decade, appreciation for the idea of continuous incremental improvement as the basis for running a company has grown substantially among entrepreneurs. Specifically, a range of companies have acknowledged the importance of digitalization, shifting to the e-market setting as a more lucrative option for attracting new customers and selling their products (Abou-Foul et al., 2020). Therefore, the opportunity for SADARA to take a noticeable spot in the digital setting and cement it by developing a massive competitive advantage are the points that SADARA’s leaders are likely to appreciate in the specified pitch. Thus, by outlining the opportunities that the digitalization process will have on SADARA and its relationships with its customers, the ability to capture new audiences, and the chance to streamline its manufacturing and SCM-related processes are likely to be recognized for their importance. For this reason, emphasizing the described outcomes as the main effects that digitalization of SADARA’s services and products will entail will allow the company leaders to recognize the value of the described change.

Specifically, the added value can be described from several perspectives. First and most obvious, the opportunity to improve the quality of performance by introducing better control tools and enhancing the SCM processes will be addressed. Specifically, the options for introducing the principles of agile SCM into SADARA’s performance will be demonstrated. According to Sjödin et al. (2020, p. 480), the use of the IoT tools and the AI frameworks allows connecting organizational, manufacturing, and communication-related processes into a single framework in order to build the “capacity to co-create new digital service innovations in collaboration with customers and the broader ecosystem.” Moreover, the author emphasizes that the suggested change will entail the servitization of the internal corporate process, which means that the company’s brand will be represented both as a product and a service, thus attracting a broader range of customers and representing the company more accurately in the global market. Specifically, the servitization of SADARA’s products will show the fullest range of services that the company offers, including not only specific products, but also the improvement that they cause for the end user. Therefore, for SADARA, which is actively seeking to expand and improve its quality management along with the coordination of the key tasks within its supply chain, the inclusion of the agile strategies into the framework will be vital.

Afterward, the importance of communication in the present-day global SCM setting and the high probability of misunderstandings in it will have to be detailed, focusing on the opportunities that the proposed integration of IoT, as well as other IT and ICT tools, will have on the accuracy of data management. Thus, SADARA leaders will have a clear perspective on the opportunities that they will be able to embrace when deploying the proposed framework. The importance of the agile SCM framework as the option that will be unlocked for the organization as soon as it embraces digitalization will also have to be outlined as the mans of enhancing quality and, therefore, attracting new customers while also keeping the old ones loyal to the brand. Overall, the tremendous potential for increasing SADARA’s competitive advantage not only in th KSA, but also on the global scale should become the key selling point for the described approach toward shaping the company’s business strategy.

Implementing the Approach for the Client (SADARA)

Applying the proposed approach to SADARA will require the use of the financial projections that will illustrate the efficacy of the proposed approach. Namely, it will be crucial to show projected ROI changes after the integration of the digitalization techniques and the increased focus on the transformation of the company toward the IoT- and AI-driven change within its organizational, manufacturing, and management-related processes. Specifically, it will be necessary to perform the analysis of the chemistry market to illustrate the necessity for transitioning to the digital platform. Specifically, SADARA will have to realize that selling chemicals digitally is possible by employing the E2E framework (Ivanov et al., 2020). More importantly, the benefits of the specified approach, namely, the drop in costs and the chance to embrace much broader range of customers, including overseas partners, will have to be demonstrated.

Afterward, the improvement in product and service quality, as well as the development of a unique competitive advantage based on close communication with customers and servitization of the product, will need to be considered as the essential characteristics that make the specified framework especially attractive to an organization (Kohtamäki et al., 2020). Since the process of digitalization is inevitable for any company, it is cucial for SADARA to get a head start on the specified task so that it could develop a sustainable framework beforehand. Thus, the company will not need to rush when the specified task gains particular urgency. Instead, SADARA can currently take its time to restructure its supply chain and consider how innovative technology can be integrated into its framework most effectively. In fact, the specified process needs to be shaped toward the creation of a cost-effective approach based on cutting cost for the processes that used to be performed manually rather than with the help of digital tools.

Additionally, the transformation of the organizational setting within SADARA will also have to be represented as a major opportunity for the company. First and most obvious, the specified change will allow defining whether staff members at SADARA are motivated and loyal enough to support the change in question. Moreover, with the transformation of the workplace environment and the improvement of the organizational processes, the reconsideration of the corporate values and the emphasis on the professional development of staff members as the primary motivation device will become possible. Thus, employees will develop the loyalty needed to support the described transformation and the shift toward digitalization, while acquiring the skills needed to promote the change further.

Conclusion

Since SADARA has evolved to the point where it requires an intricate and elaborate supply chain for collaboration with its suppliers, retailers, and partners, as well as the increased importance of enhanced communication with the target audiences and the enhanced quality management, SADARA will need to transfer to the digital platform gradually. The specified process will have to be carried out in the manner that will allow streamlining quality management and key supply chain tasks, thus improving the performance of the organization. As a result, the transformation will have a significantly positive effect on SADARA and its performance in the chemical industry. Moreover, with the inclusion of the described strategies and tools, SADARA will have the potential to become a leading organization in the digital market, gaining additional value and becoming immediately recognizable. Therefore, the proposed approach toward building an online presence in the KSA chemical market, as well as the global one.

References

Abou-Foul, M., Ruiz-Alba, J. L., & Soares, A. (2020). The impact of digitalization and servitization on the financial performance of a firm: An empirical analysis. Production Planning & Control, 1-15. Web.

Caputo, A., Pizzi, S., Pellegrini, M. M., & Dabić, M. (2021). Digitalization and business models: Where are we going? A science map of the field. Journal of Business Research, 123, 489-501. Web.

Ivanov, I., Lukyanova, T., & Orlova, L. (2020). Digitalization as a driver of innovation for industrial enterprises. IOP Conference Series, Materials Science and Engineering, 753(8), 1-14.

Kohtamäki, M., Parida, V., Patel, P. C., & Gebauer, H. (2020). The relationship between digitalization and servitization: The role of servitization in capturing the financial potential of digitalization. Technological Forecasting and Social Change, 151. Web.

Sjödin, D., Parida, V., Kohtamäki, M., & Wincent, J. (2020). An agile co-creation process for digital servitization: A micro-service innovation approach. Journal of Business Research, 112, 478-491. Web.

Who we are? (2021). Web.

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