The Digital Transformation Barometer

The waste management and recycling industry is less than enthusiastic about its own success in making the digital transformation, according to AMCS’s Digital Transformation Barometer 2018. This is especially true for the application of new technologies, such as route optimization, online customer portals and Business Intelligence. Most companies gave themselves a grade of ‘unsatisfactory’ in these areas. This is surprising given that 64% of those surveyed expect an increase in their IT budgets. In fact, 20% expected an increase of over 5%.

Digital innovation crucial for future success

More than 80% of participants – regardless of whether they are municipalities or private sector waste management companies – believe that digital innovation is important for their business success. At the top of their priorities list is improving customer satisfaction (73%) and increasing productivity (72%). In addition, more than half (52%) also indicated that improving sustainability is a big priority. But to achieve this, the most important issue by far for management is how to organize the operational process, in terms of both harmonization and digitalization. Obsolete legacy IT systems, implementing a paperless organization and creating a culture open to change are the main barriers.

Drivers of success for digital transformation in waste management

“The research shows that there are five elements that are critical to success in transitioning into a digital organization,” says Mark Abbas, Chief Marketing Officer for AMCS. “Besides engaged employees and a management team that gives people the space to innovate, it is very important to have a comprehensive understanding of the digital trends and advancements in the value chain. It is also down to a smart application of new technology within the organization and using (reliable) data to make decisions.”

Digital Transformation Monitor

Research participants were asked to rate their organization on a variety of statements that measure progress on the five elements of success in digital transformation. The average score on the 10-point scale was a mere 6,3. The barely-passing grade clearly indicates there is much room for improvement in the industry.

Key findings from the benchmark

1. Digital transformation requires leadership in change management

The results of the survey show that leaders in the waste management industry clearly understand the importance of ‘soft’ factors, such as leadership and employee engagement, in making the transition.

2. The digital part of digital transformation the real challenge

Unlike the softer aspects like leadership, it is exactly the 'harder' technical aspects of transforming the organization, as in using Business Intelligence (BI) and data science or applying new technology, that forms the biggest challenge. When it comes to the application of emerging technologies, 60% of respondents gave themselves a failing grade. Average scores for business information were slightly better, but nearly half (45%) still gave themselves a grade of unsatisfactory.

3. Legacy systems are the greatest barrier to successful digital transformation

For 54% of organizations surveyed, it is the problem of legacy software and systems that creates the greatest barrier to full implementation of the digital transformation.

What do the leaders do differently?

According to Abbas, the research results provide insights into a very interesting group of companies that have taken the lead in digital transformation. “This group approaches digital transformation in a completely different way and has very different priorities from the rest. Their operations are already very nearly paperless, they use digital invoicing systems and they have self-service web portals available for their customers. They are also more likely to already be using other digital techniques and applications, such as RFID, GPS Monitoring, Route Optimization, and in-vehicle tablets.”

The foreseeable future will be about evolving from data to information. Analytics and BI are making it possible to immediately calculate the profitability of routes and jobs. Coordination with subcontractors is optimized when information can be exchanged digitally. And investing in applications like digital invoicing and payments mean offices can become completely paperless.

About the research

Today’s waste is tomorrow’s raw material. Collaboration and simplification within the value chain are essential for progress and creating value. A circular economy is not a liability; it is an opportunity for growth. Technology, ICT and big data will all play an important role in the new standards of sustainability. For the Digital Transformation Barometer 2018, AMCS studied which priorities are on the agendas of management in municipalities and private sector waste collectors in Europe and the US. We also wanted to understand the biggest challenges they face in the digital transformation of their operational processes, and whether there were any significant differences in digital maturity within the target group. The respondents included a significant number of organizations with more than 250 employees. More than half of respondents have more than 50 vehicles for waste collection.

A detailed report of the research findings has been published and is now available for download.