The waste and recycling industry is being transformed, driven by environmental, economic, political and social factors.
The sector has an important role to play in helping to meet the demand for materials, while the continued move to circular business models has resulted in the need for more sophisticated technologies and IT platforms capable of supporting the transition.
Further pressure to accelerate the rate of change comes from the escalating costs associated with operating a modern waste business along with the need for efficiency across all operational areas.
Alongside these operational needs, customers expect to see the same levels of digital interaction they experience in every other aspect of their lives.
From AMCS’s 2018 worldwide survey of waste management companies, it is clear that leaders industry are very aware of how important ‘soft’ drivers, such as good leadership and engaged employees, are to a successful digital transformation. But the ‘harder’ technology and data science drivers still prove to be the most challenging aspects.
Legacy systems are the biggest challenge to successful digital transformation – for 54% of those surveyed, legacy applications and systems still form a significant barrier to fully implementing a digital transformation.
More than 80% of participants in the report believe that digital innovation is important for business success. At the top of their list of priorities are improving customer satisfaction (73%) and increasing productivity (72%). More than half of respondents (52%) also indicated that improving sustainability is a priority.
Interestingly, while digital transformation ranks very high in the list of priorities, it also turns out the be the biggest hurdle that most organisations say they face. It is probably no coincidence that one of the most obvious goals of digital transformation – the harmonisation and optimisation of business processes – ranks second on the list of hurdles.
Given that most companies gave themselves a grade of ‘unsatisfactory’ in the application of new technologies, it is perhaps surprising that 64% of those surveyed expect to see an increase in their IT budgets – some of 5+%.
Overall, more than 40% of businesses expected their revenues to increase by more than 10% in 2019. On average, these organisations tend to spend about 1.6% of their revenue on IT and 63% expect this percentage to increase in the next few years.
Nearly 70% believe that the best place to invest right now is in digital transformation rather than fleet size. This can be a smart strategy because, while adding vehicles will increase capacity, it does not necessarily optimise that capacity. Improved systems, however, can mean more productivity from the same number of assets.
It therefore makes sense to optimise current capacity with more efficient processes. This advantage is compounded when a fleet is expanded because the productivity per vehicle is already higher.
The research provides some valuable insights into an interesting group of companies that are taking the lead in digital transformation. This group approaches digital ways of working in a completely different way and has different set of priorities from the rest.
These operations are already nearly paperless, using digital invoicing systems and employing self-service web portals for customers. They are also more likely to be using other digital applications such as RFID, GPS monitoring, route optimisation and mobile technology.
In the foreseeable future, we expect the evolution from data to information to come to the fore. Analytics and business intelligence now make it possible to calculate the profitability of routes and jobs in close to real-time, meaning that decisions to improve performance can be made in a ‘live’ environment.
Co-ordination with subcontractors will continue to be optimised, with more information exchanged digitally, while investment in applications such as digital invoicing and payments mean that offices of the future are set to be increasingly paper-free.
Mark Abbas is chief marketing officer at AMCS
About the survey
- Conducted from March to September 2018
- Senior executives at public and private sector organisations were polled – roughly a 50/50 split
- 73% were from smaller companies
- Survey took in the UK and Irish Republic, Australia, Europe, North America and Scandinavia