Case Study
Aug 10, 20235 mins
Business IT AlignmentCIODigital Transformation
The fact Eastman created a new line of business through digital products is nothing new. What is new is the business is run by IT.
When Aldo Noseda became CIO at chemical manufacturer Eastman five years ago, he immediately began working with other leaders in the company to bring a new category of services to the market that complemented its physical products. “Before Eastman, I worked for Monsanto, where I had a similar journey,” he says. “Monsanto sold agriculture products and we started a digital division to sell advisory services to farmers. So the idea was already being floated when Eastman made me the offer to become CIO.”
A new service layer would be created to boost product sales and increase loyalty by helping customers use Eastman products, which are inherently complex. Moreover, the new service layer could be sold as a subscription to provide an entirely new revenue stream. On top of that, selling a service would be a whole new way of doing business since, until then, Eastman had mostly sold physical products.
“When Aldo came to Eastman, he helped build a diverse team including people with different business backgrounds,” says Kate Horan, who is now digital strategy and products manager for Eastman’s Performance Films business. “The way this was built as a start-up within the IT department was critical to its success at Eastman. We now have three services on the market and a fourth on its way.”
Solving customer problems
The most mature of the three services is called Core, which helps dealers in the automotive aftermarket industry install paint protection products and window film products more accurately and efficiently. Core provides patterns of vehicle parts—for example, bumpers, fenders, or mirrors—for specific makes and models. An installer can use editing features to customize the patterns and then place the pattern onto a digital cutting board, where it can be cut out and installed on the vehicle.
“The objective is to nest the patterns as efficiently as possible to save customers time and material for when they’re cutting out film to apply to a vehicle,” says Horan. “We have nesting algorithms to help with that. This helps end installers perform their job, which is both an art and a science. We try to help them install the film quicker and more efficiently.”
Nesting is an idea borrowed from the clothing industry, where the challenge is to pack a set of irregular shapes onto as small a strip of material as possible. AI and sophisticated numerical analysis algorithms are used to minimize material waste, which adds up to big money when large volumes are involved. Computer aided design (CAD) tools, which are often used to model the irregular shapes, can feed the models to the nesting algorithms. A small industry has sprung up not only around providing the best technology, but also around offering the best business offerings, like on-premises applications versus subscription-based cloud services, for example.
In the context of performance film, nesting is the process of getting the patterns onto the cutting board—and ultimately on the film—as efficiently as possible. Nesting leads not only to optimal use of film, but also to better aesthetics in a car. Eastman has come up with a set of unique techniques for the automotive aftermarket.
The service boosts product sales, and product sales lead more people to the service. But Noseda insists the service works just as well with competitor products, and it can be seen as an independent offering. “The magic of this is to have patterns of cars as quickly as possible when they come into the market,” says Noseda. “You must produce them fast and with the highest quality. To create patterns, we use patent-pending algorithms, analytics, artificial intelligence, and other techniques. Imagine a Ferrari comes in and the owner wants paint protection film. The dealer goes into a system to find the right cut and the car isn’t there or the quality of the cut isn’t exact. That isn’t good. We do things to make that information available very quickly and with really high quality.”
Growing the business
In the beginning, there were questions around where the digital business would sit within the company. But now it runs smoothly within the IT department, which makes the digital products organization unusual.
“We operate like a start-up,” says Horan. “We have steering team meetings to get input from all parts of the company, but the voice of customers is the one that’s most important.”
Noseda says the digital products organization is growing along various strategic horizons. One is to increase the number of subscribers, and this is mostly a matter of geographical expansion. The services have done very well in North America and the business is now targeting other markets. The other horizons are about increasing capabilities to further support existing customers.
Noseda estimates that around 80% of his role is what other companies would call traditional IT: providing cyber security, business intelligence, and everything else needed to support the organization. When he’s not doing all that, he runs the digital products organization with a full staff including people responsible for communications, customer service, and product design and engineering.
In the future it may become more common for CIOs to run digital businesses. “The IT department will play a role beyond just supporting the internal company,” says Noseda. “They will also add value to the world outside and generate new revenue.”
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