Digital transformation is the process of integrating digital technology into all aspects or areas of your company or organization. In this episode, Victoria Meyer has a conversation with two experts in digital transformation. Christophe Cabarry is the Chief Executive Officer and Founder of SpecialChem, who also brings more than 20 years of experience in strategic digital marketing in chemicals and materials. The second guest is Jay Bhatia, who is the Founder and CEO of Agilis Commerce, a technology startup based in Newark, NJ.
Listen in as Victoria talks about digital transformation in the chemical industry, the significant changes that occur, the critical aspects of a partnership that you should know, and how companies build a business for digital and chemicals.
Christophe and Jay also share their personal experiences in this industry, how they started their companies, and tell us some important details about them launching a new solution together in the market. This podcast is so exciting with the knowledge and expertise that Victoria and her guests share in this episode. So tune in!
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Digital Transformation in Chemicals with Christophe Cabarry & Jay Bhatia
Today, our focus is digital and chemicals with a couple of special guests. Jay Bhatia is the CEO of Agilis Commerce, and Christophe Cabarry is the CEO of SpecialChem. I am super excited to have Christophe and Jay here. Welcome to The Chemical Show.
Thank you, Victoria, for inviting us.
Absolutely! Christophe, I’d like to start with you. What’s your origin story? How did you get involved in chemicals and what led you to start SpecialChem?
Like Jay, I come from the chemical industry. Before starting SpecialChem, I spent eight years working for Arkema. Basically, I had different jobs in purchasing, marketing, and strategic planning. I created SpecialChem out of the frustration of being a marketer in the chemical industry. Marketing is so important, especially in specialty chemicals, in particular, to create innovative products, understand where value is created, differentiate your products, and find the best markets. It’s very important.
At the same time, it is very difficult in our industry because it is very fragmented. It deals with hugely complex value chains all over the world. So marketing is very complex, yet very needed. I created SpecialChem to resolve this tension, to make better marketing, provide digital marketing services to chem companies so that they can make it faster, more scalable, more predictable, more effective, and less expensive. That’s my story of starting SpecialChem in the chemical industry.
Awesome! That’s good. I know we’ll probably get back into some of these elements later.
Jay, how about you? Share a brief intro. People that had been listening for a while know that this is the second time Jay is here in The Chemical Show. Jay was previously on Episode 5. Jay, go ahead and give us a brief intro to you. Also, share with us a little bit of how Agilis has evolved since we spoke two years ago.
Thanks, Victoria. I am happy to be on the show again. I’m very happy to see your growth. From that point of view, we both are in the same boat in getting our startup venture into orbit and scaling it up. Those who don’t know me. I’m a chemical industry veteran. Like Christophe, I spent 20 years in the industry working with some of the leading global players before starting Agilis.
I started Agilis six years ago. I had a fun journey. I see the challenges in the chemical industry and I was always scratching my head that this is a $5 trillion industry. This is one of the foundational industries which help transform a lot of other industries. So why can it not transform itself by using some of the latest technology tools? That was my call to action and I’m loving every bit of it.
You asked me how Agilis has evolved since we talked last time. First of all, we have seen tremendous growth in the past two years, just like I mentioned in that podcast during the pandemic. It brought awareness, but the real action happened after the pandemic was over because, during the pandemic, people didn’t have the bandwidth to start new projects although they recognized the need for digital. But as soon as the pandemic got over, there were already a lot of producers and distributors who were ready with the budget for the projects. Then we’ve become so busy at that time. That is a good thing.
So we have grown both in terms of customers, as well as platform development. Most importantly, we are not how we have evolved based on customer feedback and building for customers. We are not only an e-commerce portal company. We are still within digital commerce, but digital commerce means a lot more today than just two years back. So we have our whole platform has evolved into a modular fashion. We have six distinct modules. I won’t go into the details, I don’t want to make a sales pitch. But it’s enough to say that everything we have built is based on customer feedback and specific use cases from chemical producers and distributors.
That’s interesting. You’ve also changed your name. You went from Agilis Chemicals to Agilis Commerce.
Yes! We recognize that just like any startup, you just start with whatever makes sense. Then you get market feedback, and then we saw that a lot of our customers or prospective customers were getting confused with the naming chemicals generally implies you’re a producer or a distributor. So we wanted to make it very clear that we are not in your business. We are here to help you improve your business, but we are not your competitor. That was the reason behind changing the name, which brings more clarity, and more focus.
Christophe, you’ve been involved in digitalization for almost two decades now. How has it evolved since you started? I was involved in digitization. We didn’t call it that two decades ago. But from your perspective, what’s changed? What’s different today versus where you started?
We started with a vision of how digital technologies would enable marketing and overall the chem industry to connect better to the markets. This vision we had is the same vision we have today, except that we were two decades too early. So what we have been observing since then is not a revolution, but an evolution of the chem industry regarding digitalization. It’s a long process. It’s very transformational, but it’s a step-by-step transformation.What we have been observing since then is not a revolution, but an evolution of the chem industry regarding digitalization. Click To Tweet
This industry is a very asset-driven industry. It is very conservative. It’s because it is asset-driven, lots of money is put into building plants, and also because it is dealing with dangerous products. So it is very conservative more than every other industry I know. If you are bringing digitalization innovations into this industry that is helping to improve efficiency, everybody likes that.
So what changed is not the industry, but the customers of the industry have been changing quite recently and because they are changing then our industry is changing. In the last five to seven years, I would say that the customers are now in the driving seat. When I started my career, the customers didn’t have much to say. We, as suppliers, were visiting the customers when we wanted and when we had time. We were pitching our products. I had been doing that myself quite a bit. Today, in the digital age, they are in control. They determine when they want to interact with you.
The very first contact between a buyer and a seller is now a digital contact. The first contact is with a not a human, but with an interface that is digital. It can be a website, it can be a webinar that is recorded, or it can be a customer portal. And it is happening when they want. So it is changing tremendously. They’ve got the choice to interact through different channels. So they’re really in control. This is a complete reversal of the first contact that is changing the industry. Today, according to an official Gartner survey, 50% of customers prefer a sell-free experience when they purchase something. So for the industry that is still relying on sales forces to visit our customers in a very large majority of cases, that’s a very big change.
Digital Transformation: Today, in the digital age, customers are in control. They determine when they want to interact with you. The very first contact between a buyer and a seller is now a digital contact. The first contact is with a not a human, but with an interface that is digital. It can be a website, it can be a webinar that is recorded, or it can be a customer portal.
That’s interesting. I think a few things that just to unpack a little bit one, I think the shift from pole to push is really interesting. I was involved in selling some e-business startups a couple of decades ago. It was definitely a push. We were pushing it out to our customers and hoping they would engage. I think this switch to being more of a customer-driven pole from not just the customers, but the other thing you talk about is we’ve got a lot of digital natives. As we look at the younger workforce coming into the industry, they’ve grown up digital. As we look at what we do on a personal basis, so much of what we do is digital like digital research, digital booking of hotels and flights, and many others.
There’s this absolute expectation that translates into the B2B experience. I think that becomes really critical in terms of this evolution and in the evolution of mindset that is less about what’s in it for me as opposed to what’s in it for the customer. It has to be really customer-centric. What prompted this episode in The Chemical Show live is seeing an announcement between Agilis and SpecialChem that you were partnering to launch a new solution. Jay, can you touch on that briefly?
The challenge in this industry is huge. It’s because this is an asset-driven industry, the companies, chemical producers, or distributors are used to doing business in a certain way but also implementing software only through the IT department through capital projects. We firmly believe that the challenge is big enough that this is not just one company that can solve it. We are here to collaborate and work with other companies wherever we find that it can benefit customers.We are here to collaborate and work with other companies wherever we find that it can benefit customers. Click To Tweet
This is all about keeping the customer’s view in mind: how can we build a better solution? So we bring the software and the software experts. We already built something unique for the chemical industry and SpecialChem has 20 years of experience in dealing with product data. Today, they are the largest product catalog platform in the industry. They have a lot of expertise in how these product data should be structured and configured.
They would know what buyers are looking for and how they want to access the product data. Even though a lot of companies claim that they are online, they put basically PDF documents online. That is not it. Your product data is super valuable. You can literally turn that into a good customer experience and marketing tool by digitizing every aspect of product data. That is where we see an opportunity to make things better in the industry for the customers, and that’s why we are partnered with a specific company.
That’s interesting. Across the industry, we see is in new entrants and new innovators in the industry. You can see a lot of growth and collaboration through partnerships. You can optimize both your knowledge bases, and resources, and you know how to make something better. I know that you have both had opportunities along the way to partner with companies. What do you find to be critical? I think this is an area that a lot of companies struggle with. It’s figuring out how to select the right partners. What’s critical in a partnership? What do you look for? Christophe, I want to start with you.
I think the most important thing is to share values and vision. First of all, you need to be complementary in your assets in what you do and combine your assets the right way. But if you don’t have the right culture, or the alignment on culture, and vision, then it’s impossible. In our case, what unites us is the fact that we both come from this industry. But we share the same passion and value for this industry. We also share the same vision of how it needs to evolve. A number of startups that raised a lot of money recently, want to disrupt.
They rip off a part of the value from the value chain to their benefit. That’s really not our view of things. We are all about enhancing and making it possible. Having different kinds of solutions, and a variety of offers, we can tailor craft and offer to different companies with different needs and levels of maturity. We are really sharing that with Jay. Also, we’re approaching the same thing from two different angles. They do software and e-commerce. We are a more service-enabled platform dealing with digital marketing, and what is the overlapping part is the product information.
To sell a product, you need information about the product. And to market the product, you need product information documents relative to the product. We thought that there is a lot to be done in the industry. If you look at this product information, historically, it has been managed in a very cool way. It is disseminated in much different software like emails, Excel sheets, or in hard drives. Honestly, there is no platform for product information. Every company now is putting their customer information into a CRM. This needs to happen, and it is, in fact, happening for product information, digitalizing the product information. This is absolutely a cornerstone in every digitalization roadmap.
Jay, circling back to you on the partnership, what we’ve heard from Christophe in terms of shared values and vision, what else is on your list in terms of what’s critical in a partnership?
So there are shared vision and values, the complementary nature of the business, and complementary skill sets among the workforce. SpecialChem has a pretty big team who are experts on the product catalog. We now have the best software engineers in the chemical industry who are focused on building software for the chemical industry. So that is really helpful.
Jay, during the pandemic, we saw a real acceleration in digital because we were all home-based or many of us. Some people were still in office. Obviously, our manufacturing employees were at work at manufacturing sites. At the beginning of a decade, we’ve seen this acceleration in digital. Is that persisting as people go back to the office and we go back to “business as usual?” Do you see it slowing down? What’s happening in the line of digital from that perspective?
Digitalization and digital commerce are accelerating. It’s probably the fastest pace that I have seen in the last six years. That is because as I said, during the pandemic, it brought awareness but the companies didn’t have the bandwidth. Along with the pandemic, there was also a supply chain crisis, specifically for the chemical industry. For the past years, suppliers were struggling to even meet the current customers’ demand. That is why digitalization or digital projects have accelerated as the industry has come out of that firefighting mode. But the real change is what Christophe said, it’s the customer expectations. Nothing will move suppliers more than a customer’s expectation. The customer’s expectations have completely changed. Digital is no longer nice to have. It is a must-have, and that is driven by customers’ needs.
When I talk to people across the industry, there’s often this question of where’s the value? There’s a concern that as they digitize their sales process, they’re not necessarily adding to their bottom line. It is a costly implementation from a variety of places. So when we think about digital, when we look at customer-facing applications and investments, what do you see? Where is the value? How do companies build a business for digital and chemicals?
Victoria, I’ve been asked this exact question five years ago by the CEO of a Japanese company. What is the ROI I am going to get? So my answer was, do you measure the ROI of your phone? It’s because to do business, you simply need a phone. So to do business in a world where customers are digitizing very fast, you need to do it or else, at some point in time, you will be out of business. It’s as simple as that in the long run. In a less provocative way, it is possible and even recommended when you are implementing new software. Also, when you are hiring a team to digitalize, you need to have a roadmap.
You need to have an intention, and an objective, and you need to understand how you’re going to create value, and get new customers with better-managing prices. You can really do that in every aspect of your digital roadmap. But at the very beginning of a digital roadmap, when you change, it is quite frustrating. it’s because you cannot measure the results. It is all about building the foundations, doing the hard work, and doing the things that will not pay off immediately. You should not get discouraged. The ROI comes after what you can measure when you get the first result and the first success.
Then you can go to the next steps of your roadmap, which is continuous because I don’t think we will ever see the end of digitalization in the industry. It’s a process that is here to stick. Also, to lead to the question before, at the beginning of 2022, we think that for the vast majority of the companies, more than 80% of them reached the tipping point. Maybe, 20% of them want to go back to what they did before, doing old trade shows and visiting their clients. But 80% of them understood the need for change. They cannot go back to what they were before. Not all of them calculated an ROI when they said that, but they knew they had to do it.
Digital Transformation: The real change is the customer expectations. Nothing will move suppliers more than a customer's expectation. The customer's expectations have completely changed. Digital is no longer nice to have. It is a must-have, and that is driven by customer’s needs.
It’s a bit foundational. It makes us understand that we have to do something. But what’s interesting about that, too, is there’s a bit of a leap of faith. Frankly, executives in the chemical industry are not that really good because we can manage, and measure really effectively what the investment in a new heat exchanger is going to do for us. It’s harder to measure but there are leaps of faith in the digital landscape. So that’s one thing. But it also strikes me that one is having a roadmap, too. There are other questions that must arise. So Jay, what are the biggest questions and concerns that companies have when they’re considering a digital investment? I think people sometimes don’t know where to start. How do you help them know where to start? That’s often the hardest thing to do.
The biggest challenge that we see for companies is where to start. Digitizing or implementing digital commerce, it is across the organization, impacts almost all of the functions. But most importantly, it impacts your customer’s life on how they do business with you. That is where the biggest concern comes from chemical producers and distributors. I asked myself after investing this million dollars, is my customer going to adopt it? Are my internal users going to use the channel? So that is the scariest part. The industry is used to that asset-driven mindset, that everything needs to be a capital project. All IT implementation is a capital project. It needs to be squared down to your project implementation team. You don’t spend literally millions of dollars, even a single user will use the software.
By the way, I’m going to interject on this, Jay, and you feel stuck. It’s because you made a choice, and you feel like you’re stuck with it forever.
Yes! The reality is that the software world moves so fast. Within a few years of implementing it, things would have changed so much. Our view is that modern software doesn’t get deployed this way. This is modern software. Especially, if you customize a user, you cannot afford to spend two years configuring your solution. You need to take a lean startup approach and launch your MVP, Minimally Viable Product. Get customer feedback as soon as you can. Incorporate that feedback and iterate your solution. That is where this software becomes a service model. That model minimizes your risk because you’re paying per use. You’re not spending millions of dollars in implementation, but most importantly, it accelerates your speed to market. You get your customer feedback within three months. And that is very critical.
Who has to be convinced? You talk about traditional software implementation. A lot of it was the IT department. When you think about these new platforms, yours and others, who’s in the driver’s seat inside your customers?
It differs from organization to organization. But for us, we start with the business leaders because digital commerce is not your typical IT solution. It is a sales channel. It is going to impact the life of your customers and your breadwinner sales and marketing teams. When it comes to digital commerce, it’s more than an IT solution. Your customer engagement tool is your business development tool.
So we always start with the business leaders who have a bigger say. Then, IT departments have a much bigger say, and they are the ones who will be implementing. They are the ones who are accountable for whether the solution works or not. There needs to be a meeting of the mind. And then that’s a complex process. This is like a multi-stakeholder environment where you have to make sure that every step of the way, everybody is in the line and moving in the right direction.
It strikes me that risk management plays a big role in this, as well. There’s the customer risk, the implementation risk, and when we think about software as a service, it’s the security risk. Cybersecurity risk is a big concern to companies. How do you tackle that? What do your company customers typically see as risks? And how do you tackle that, Christophe?
In the specific case of special candidates, of course, it’s a very important matter. We’re getting protected, and we got training within our teams all the time, regarding security. We are testing our people because most of the time the crux is the other people in the organization. So 20 people are very important in this domain. For SAS products, obviously, you’ve got best practices, and you’ve got a qualification for your software regarding the security norms. SAS is such a huge part of the economy. Because the risk is so generic and systemic, there are rules that when applied, guarantee a really high level of security. It cannot be 100%, but it will be very high.
I would like to add to that. Of course, the cyber security risk is real and dangerous. Even today, some of the best well-run organizations can also get hacked. So it is a continuous task. Every day, you want to make sure that your software is up-to-date. You’re using the latest tool, you’re updating all the software updates, and your users are using it properly. For us, this has been the pretty hallmark of what we do. We have our engineering team from big organizations who help manage that risk at a much larger scale. In the last five years, we didn’t have a single downtime. Now, it doesn’t mean that we are immune to it. But my point is that it’s a continuous process and whether it’s a small or big organization, you always have to take care of that.
To wrap this up, in 2023, what is going to be the focus of your company and other companies across chemicals as they look at digital and chemical investments?
It really depends on their level of digital maturity. These companies are focusing on getting the basics right. I think a website that works, that looks nice, and that is well referenced on search engines. I think it’s a CRM that is not only a sort of repository for call reports. These are the basics. With the most digitally mature companies, it’s a big difference. The big thing here is, I think, becoming multichannel. The big companies, the most advanced digitally, know that they cannot only rely on their website to reach out to the market and get reached by the market as a digital channel.
They have to be multichannel. You can find a customer portal, an e-commerce portal, and platforms like marketplaces, social networks, and other places where you are going to hire your future employees. So many different channels are important to be successful in this digital environment. The website cannot perform well for all of these targets and for all of these purposes. The leaders have understood that but then they struggle to find the exact channels they need and build coherence through all of them so that the experience of the customers connecting through the different channels is the same. It means on the backend, you need to have systems that ensure coherence.
That’s a very big challenge for the most mature companies. Continuously improving their customer experience is also at the top of the minds of the leaders. Now, I also see integrating with partners. The next step after adopting different channels, becoming multi-channel, and connecting with partners is something that is also very important from system to system. Getting more value from the data is also something in the mind of every company.
I think you’ve covered the high points. Jay, from your perspective, what do you see as the real focus for 2023?
It really depends on the digital maturity of the company. However, the good news is that one thing on that maturity spectrum, the large organizations have done their initial part of the implementation and measuring results with some good and bad experiences, and they are tweaking their approaches. Medium-sized and small organizations getting warmed up. Everyone recognizes that digital is the most helpful. But I think the biggest focus is to recognize that this is not a one size fits all approach. You need to understand your customers, market, and customer journey, whether you’re selling commodity chemicals, specialty, ingredients, or plastics, there are a lot of nuances. There are multiple business models that play in this massive industry. Each business model requires a slightly different solution than the one monolithic e-commerce approach. That is also where we evolve and continue to evolve our approach to getting more modular.
Awesome! This has been super helpful. Christophe and Jay, thank you for joining us today on The Chemical Show. And thank you everyone for participating and listening.
About Christophe Cabarry:
As the Chief Executive Officer and Founder of SpecialChem, Christophe Cabarry brings more than 20 years of experience in strategic digital marketing in chemicals and materials. He is a sought-after expert on the topic of digitalization of innovation and R&D, and sales and marketing. With his teams, he has managed over 400 business development programs rooted in digital methodologies for more than 70% of the top 100 chemical companies. Before SpecialChem, Cabarry served in both commercial and industrial strategic roles including international merger and acquisition analyses at Arkema. He holds a Master’s Degree from Ecole Centrale de Paris and an MBA from ESC Toulouse Business School.
About Jay Bhatia:
Jay is a Founder and CEO of Agilis Chemicals Inc., a technology startup based in Newark, NJ. He founded Agilis in January 2017 after an illustrious career with BASF and Shell where he led sales and marketing organizations. He also led the implementation of the internal startup at BASF. Jay is passionate about using technology to solve business problems.
At Agilis, he is leveraging his 20 years of experience in the global chemical industry to solve the chemical industry’s most persistent challenge: lack of efficiency and transparency resulting from highly complex and fragmented supply chains. Over the past 4 years, he has led a cross-functional team to launch a commerce platform purpose-built for the chemical industry. Agilis platform brings producers, distributors, and customers onto a single interface, driving transparency, efficiency, and growth.
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