The Chemical Process Industry is still at an early stage in its adoption and usage of cloud computing. However, going by the industry’s structure and prevailing trends, the chemical industry is well positioned to leverage significant benefits from this emerging technology. With increasing cost pressures due to rise in commodity prices and intensifying global competition, chemicals businesses need to achieve a fundamental reduction in their underlying cost structure for driving greater operational excellence.
In addition, challenges such as ongoing globalization of manufacturing and research and development (R&D), industry consolidation and the rise of the sustainability agenda are demanding new approaches to how the industry operates. The chemical industry segment has to find new ways to stem pressures compounded by the need to manage and mitigate supply chain risks more effectively in a globalized world, and to respond to customers’ demand for shorter lead times and more specialized formulations.
What does the cloud have in store?
With Cloud computing, chemicals businesses can meet all challenges mentioned above. However, currently the usage of cloud services is still at a nascent stage in the chemical industry. The adoption of cloud services in the chemical industry is bound to grow as industry experts predict. The chemicals companies are already using outsourcing, off shoring and shared hosting service centers in many areas of their business, and are actively consolidating and standardizing IT across the business. Compared to other industry segments they are ready to offload some of the processes and entrust a variety of activities to external cloud providers.
While the cloud brings significant benefits, the chemical sector still is doubtful of the technology’s disruptive and pervasive impact and needs to evaluate its longer-term costs and risks. Moreover, the significance and effects of cloud computing will vary between different industries, and even for different organizations within the same industry.
No doubt the cloud brings agility, speed, instant availability of resources, and tools that enable collaboration and innovation. The chemical sector will evaluate their options and take some time to hop on the cloud bandwagon.
The life sciences industry is one example where the cloud has seen rapid acceptance. There are a number of real-world examples of life sciences companies using the cloud to bring new agility to their research and development processes. For e.g. Pfizer’s Biotherapeutics & Bioinnovation Center (BBC) business unit began using Amazon cloud services earlier this year to develop and refine models in antibody docking runs. According to Giles Day, BBC’s head of informatics, “We use the cloud to shorten the process to two to three hours from two to three days. But what really interests me is that it changes the way we do our science. Using the cloud lets us work in a more iterative way and keep the momentum of the research project going.”
The life sciences sector is using the cloud for developing new therapies and products — and getting them to market fast. Genomics, proteomics, modeling and high-throughput screening (among others) are important activities that speed next-generation discovery and development, and they all require flexible and immense computational power on demand – precisely what the cloud offers.
The way to the Cloud
To take advantage of the many benefits of cloud computing, chemical companies can begin by taking a sensible, staged and risk-based approach. It is worth taking the time to learn what the cloud can and cannot do, and how best to match the cloud’s advantages with your organization.
Begin with a Cloud adoption assessment
Look carefully at your business processes, rather than infrastructure or architecture. The most sensible way to start is by doing a top-down assessment of these processes, first making sure they align to strategic objectives and then scoring each process to identify its suitability for transfer to a cloud delivery model.
Do not think about replacing the datacenter
Instead, think about processes where performance can be dramatically improved by rapidly scalable, on-demand computing.
Move processes in stages
Consider using the cloud for development and testing and for projects that require minimal security, such as test data around process management, or a development environment for enterprise applications like SAP or Oracle. Next, consider migration of internal situational applications onto a platform as a service technology (PaaS) to eliminate data and infrastructure redundancy while increasing application usability and extensibility. Then, as employees become more comfortable with the cloud they will also use it for short-term, processing-intensive applications such as large statistical analyses.
Create a roadmap
Don’t jump into the cloud head on. Make a rational plan from your present to future state that brings the benefits of the cloud to the business processes that will benefit most. If you have something on your roadmap that doesn’t have a service yet available in the market, move it forward on your roadmap, don’t necessarily cross it off. The rapid development and improvement of cloud hosting services in the market means that it is likely a provider is already working to provide a service compatible with your needs.
Ask hard questions and demand data-based analysis regarding cost savings
Do not assume automatic and substantive cost savings. Do a return-on-investment (ROI) analysis. Consider conversion and ongoing costs as well as savings. Do not be intimidated by the jargon. Conduct an experiment or pilot on workgroup applications, or on a non mission-critical, non-integrated application. If satisfied, be ready to scale once you have proven the benefits are worth it.
To read more on how the Cloud can help you in bringing agility, mitigating supply chain risks more effectively, and responding to customers’ demand for shorter lead times and more specialized formulations read our article on Cloud Computing in the Chemical Industry.