Five industries under economic pressure—and how companies are effectively responding

Profile picture for user geoff.scott By Geoff Scott September 1, 2020
Summary:
Every industry contends with the impact of COVID-19. Some were thrown into a tailspin. But now, industry leaders are responding. Geoff Scott shares highlights from oil and gas, utilities, automotive, chemicals, and life sciences - and how to join ASUG's upcoming sessions for each.

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The year 2020 hasn't been kind to businesses in scores of industries. Creativity, resourcefulness, and resilience are the catchwords that I've been hearing from CIOs I've spoken with this year.

If there's one positive that has come out of the global pandemic, it's that many businesses aren't afraid to "try something new" anymore - another theme I've heard over and over. And adopting that philosophy is, in fact, how many of them have kept the proverbial lights on during this trying and extraordinary year.

Technology to the rescue?

Our upcoming virtual experience - ASUG Best Practices: SAP for Industries - digs deep into five industries that have felt enormous pressure in 2020, and likely aren't planning to experience much relief anytime soon (all five events are open to all, with complimentary registration). So how are these industries going to set themselves up for success?

 I've had dozens of conversations with IT leaders during the past couple of months. It's been both eye-opening and inspiring to hear how they're planning for today and tomorrow - and where they see technology as an enabler of survival, and also as a growth driver.

Another consistent theme - and we can quibble about whether this is more marketing rhetoric than strategic direction - is that these CIOs want to become more intelligent: using their enterprise software and systems already in place, tapping into existing and new data streams, and driving actionable analytical insights.

"Growth is still possible," one CIO recently told me, "but you need people willing to upset the status quo and get very, very creative."

Industry #1: oil and gas

Few industries have experienced what the oil and gas sector has gone through in 2020. Earlier in the year, when fully loaded tanker ships were drifting in the ocean with no place to unload their cargo and prices were plummeting, it would have been easy for these companies to shut down digitization projects.

 Many did the opposite. The oil and gas agenda for the virtual experience features stories of "transformation from turmoil" at top oil and gas companies, as our speakers share how they set out to increase business agility through forward-looking and targeted technology projects. As Jim Green, general manager of IT service delivery at Chevron reveals:

On the business side, we looked at our operations and identified several areas where we could make the most impact with these technologies across the value chain. That includes day-to-day operations such as turnarounds, production optimization, and maintenance.

Register free of charge to hear this and other oil and gas customer and partner stories from ExxonMobil, Shell's 10-year SAP transformation, Murphy's Oil and many more.

Industry #2: utilities

The beat goes on for the North American utilities industry in 2020: historic West Coast fires, hurricane season revving up in the Gulf, and tornadoes twisting around the Midwest. And then there's COVID-19.

Nevertheless, modernization remains a key focus for utilities, even as they report that they're struggling with the rapid pace of technology change and never-ending security threats, according to an ASUG Research webcast. 

Jeff Farney, VP of IT at Southwest Water Co., points out on the webcast several key approaches to managing change. First, open-minded communications with and input from employees-the people who are going to actually be using the new systems, he says. Next the utility looks at environmental impacts, how change will possibly affect their customers, and then lastly governance considerations.

Southern California Edison (SCE) has been going through massive change: The largest power utility in Southern California, providing service to 13 million, is executing a massive customer information system (CIS) transformation program during COVID-19. And NextEra has employed a 1,000-customer pilot program for its web portal, interactive-voice response, and work-management system implementation that is seeking to minimize change-management roadblocks.

Industry #3: automotive 

The automotive industry has been attempting to ride in the middle lane for years-on one side, delivering on its proud history of manufacturing gas-powered automobiles; on the other, catering to increasing demand for electric vehicles.

Add to that growing consumer expectations that the latest and greatest technologies should also be found in drivers' cars and SUVs.

During a recent ASUG Research webcast, Kristin Welch, who's in charge of venture pipeline at Ford X, which is Ford Motor's internal incubator, described some of the customer-focused initiatives that Ford is running and learning from.

We're so focused on customer experience-and that's both in the vehicle but also surrounding the vehicle... What types of services could be offered - could it be a point-of-sale type of offering? What does the connected vehicle of the future look like, and what do we need to be building now to be ready when that's here? - Kristin Welch, Venture Pipeline, Ford X (ASUG interview

You'll also hear SAP case studies and customer insights from BMW on building customer loyalty and Proaxia on virtualized sales and service operations.

Industry #4: chemicals

It's not surprising that many companies in the chemicals industry are facing a tough year. Pressure stemming from changing regulations and rising customer service and safety expectations, as well as consumer demands for chemicals companies to be more environmentally friendly, all add up to tough hurdles, according to ASUG Research.

Technology certainly can help in many areas of the business, as it did at KMG Chemicals, which targeted its data as one opportunity to improve its operations and save some cash. The company "mashed up" different data sources for its mobile users, tapping into its SAP S/4HANA system and SAP Cloud Platform to deliver significant savings on their transportation costs.

You know how it works in IT-everybody freaks out when you're going to touch the ERP system. But now that we can make changes directly in SAP Cloud Platform, you've got what I would call a platform for innovation - Frikkie Koen, SAP solution expert and project manager, KMG Chemicals (ASUG interview)

Sustainability remains a top initiative for chemicals companies, and we've got a case study from Albemarle that unites both IT and the business's desire for digital transformation while embracing sustainable practices.

Industry #5: life sciences and health care

The epicenter of everyday life today can be traced to the life sciences and health care industries. Saving lives, creating novel treatments through research, developing much-needed vaccines, digging into data like never before-the list of what's occurring is astounding. 

One of the organizations at the center of all of this activity is Johns Hopkins.

Inventory control at Johns Hopkins aims to optimize processes, making them more efficient and less labor intensive, while also yielding valuable information for informed business decisions to ‘deliver the promise of medicine.' New clinical protocols for personal protective equipment (PPE) resulted from COVID-19, and Johns Hopkins developed its in-house manufacturing efforts and other initiatives to support the conservation of PPE - Johns Hopkins session abstract

We've got an on-the-frontlines look at its creative response to supply chain conservation, featuring a session from Johns Hopkins. And Bristol-Myers Squibb and Varian will share their experiences in implementing and getting ROI from their SAP S/4HANA projects.

Industries moving forward

For each industry, COVID-19 is an ongoing hurdle that has forever changed the way many companies have done business. But these five industries do have their differences.

Oil and gas companies need to continue to cut costs but also explore where automation technologies can help drive efficiencies-and savings. Utilities continue to grapple with customer demand for consumer-grade experiences and service. The automotive industry has to keep their supply chains running as responsively as possible as consumer demand remains unpredictable. Chemicals companies need be environmentally responsive to satisfy customers but also manage costs like never before. And life sciences and health care organizations need to find ways to keep up with unyielding demand and oftentimes limited supplies.

I hope this gave you a flavor for the knowledge and insight that could be valuable to you and your companies at this time. If you're in any of those industries-or even if you're not but you're looking to connect with fellow SAP customers and learn from their experiences-I urge you to check out the agendas. I guarantee that you'll find a session that will help you in a year in which we all can use a little extra knowledge.