Amy Callahan leads the Natural Resources and Chemicals practice at Accenture in the Americas. She joins Knowde CEO Ali Amin-Javaheri to discuss the cyclical chemicals market, what data and AI can do to address business costs and revenue, investing in technology as a transformation lever, and more.
She joins Knowde to talk about the chemicals industry and the connection point between technology, data and operations:
The importance of investing in data platforms to find true growth opportunities
Automation and AI in manufacturing and maintenance
The criticality of data to best utilize technology
Companies and CEOs taking the lead on digital for the long term
Executives talking about digital transformation to shareholders
+More
Interview Transcript
Ali Amin-Javaheri: Hello and welcome everyone. I’m your host Ali, one of the founders of Knowde. Typically we talk to senior execs in operating roles, and so today’s gonna be a little bit different. Welcome Amy Callahan. She leads the Natural Resources and Chemicals practice at Accenture in the Americas.
You guys know Accenture all too well, so no real explanation there necessary: they help companies improve performance by offering services and strategy, digital operations and many others. Amy is unique in that she and her team talk to a lot of ChemCos [chemical companies] and so they can see patterns across the industry. She’s been at Accenture for over 20 years and knows the resources market quite well. Before we jump in, anything else about your background that you’d like to share?
Amy Callahan: Like you said, I’ve been around Accenture about 26 years and have spent the majority of those years in the resources industries. Where I made a bit of my name was out in the operations: it was bringing big transformations, digital transformations, technology transformations, cultural transformations out into the fields of our clients. While Accenture, we do a lot in the back office, I actually spent quite a bit of time in the field with steel toes and hard hats, really getting to know the operations and that intersection point between technology and how all of your operations work.
And we’ll talk a bit about today: there are so many exciting things that are happening in that connection point between technology, data and how our clients’ operations work. It’s just a really exciting time.
Ali: Just based on that intro, I know that you and I could probably extend this for an hour. We’re gonna keep it to 10 or so minutes, but great intro!
Okay, so let’s start at the highest levels. You’ve been in chemicals for a little while. How would you characterize the current environment for the major ChemCos right now compared to a few years ago?
Amy: A few years ago we were on that upward climb out of COVID. And honestly, for this group of companies, that was a really good time just between all that was needed from a cleaning and sanitation perspective; single-use was critically important for health and safety of our people; everybody was shopping online; there was a significant more amount of packaging; home building; everything that was going on was so great for the industry.
And we’re now on the other side of that: the balance of supply and demand is super challenged right now. Everybody reacted very quickly to try and meet the demand requirements of the last handful of years and then: wars in Europe, slowing economy, China releasing loads and loads of chemicals… that balance has just completely shifted the other way.
Everything that we’re seeing from our clients right now is how can you manage cost? How can you manage volatility? All the tariff news has not helped anybody’s planning about how they think about that volatility. It’s a challenging time.
On the flip side, I think the companies that look at that challenge and take it as an opportunity to try and get ahead, I think are the ones that are gonna get ahead. So the companies that are investing now in their – quite honestly, in their data platforms – so that they have a better ability to start thinking about how they can measure and prepare for that volatility, I think are the ones that are gonna do the absolute best.
I am seeing a lot of hunkering down, though. It’s the longest slowdown we’ve seen in a very long time.
Ali: I certainly share in that view, and I’ll take it even a step further. It’s been a rough couple years for our industry. There’s not that much cost left to take out for a lot of companies. Everyone’s grasping for ways to grow and be different.
And I certainly think folks need to start thinking about new levers, be a bit more creative. Going into the same meetings, having the same conversations, doing these reorgs and these small incremental changes will only get you so far. I think there’s bigger opportunities and you’ve already hinted at them.
If you had to prioritize, what would you say are one or two of the most critical levers that they could be pulling right now?
Amy: I work for Accenture, so it would be odd for me not to talk about AI and what AI, GenAI, and the newest level of thinking around actual AI agents could bring to businesses, in particular around cost.
The ability to automate things to a level that we’ve never been able to automate before is just absolutely phenomenal. It is a little terrifying as well, but there’s just such an opportunity, thinking about how you take human touch out of 80% of your sales touches, really thinking about how you focus human interaction on the most important key accounts, and really go to agent-led sales on your lower-margin work. There’s such an absolute amount of opportunity in that space.
Then you can think about how you can apply AI in manufacturing, how you can save cost on things like preventative maintenance. Maintenance is a huge cost, it’s a huge cost lever that there hasn’t been that much opportunity on [previously] except for thinking about individual headcount: how do we take one or two heads out of a maintenance organization? We can really think now about how can you actually look at analytics to prevent a maintenance occurrence from happening, and getting ahead of the big challenges by doing small incremental maintenance. Major opportunity there.
And then also thinking about how you use that information to get full transparency all the way from the boardroom down to the shop floor, and being able to have visibility to where your bottlenecks are, your challenges are, and really focusing in on those areas and focusing your dollars there.
AI agents are absolutely a [critical] area.
I think the other thing is… this has been, historically, a very risk-averse industry. I was a mechanical engineer: you think very much about how you build systems for safety, really systematize things so that they’re robust and sound.
So the concept of, hey, we might be able to move a lot of our back office to another provider, how might we take a non-core activity and outsource it? Or, quite honestly, in some cases even some parts of core activities and outsource them. There’s been a real hesitancy by the industry to do that.
With the cyclicality of the industry, okay, fine, we’ll go outsource, save a bunch of money, and then two years later demand is back up [so] refill that space with bodies within your own organization. I think companies are now really having to think about how they make full changes in that cost baseline that they have to run their business.
Ali: Frankly, a slowdown for a longer period of time forces these decisions to actually happen rather than just reverting back to practices. So I totally agree with that point.
Going back to your earlier point: generally speaking, as an industry, we’re underutilizing tech. What do CEOs care about the most? They want higher share prices. Tech is the most underutilized lever to get those higher multiples: more efficiency, better decisions, easier to do business with. It’s all there. However, I do think that there’s still a lot of skepticism just because it’s not like they don’t invest in tech, [but] I don’t know that they’re getting enough from that investment. That’s just my thoughts.
Amy: The number one conversation I have around tech is how to move out of the POC [Proof of Concept] world into the value realization world. I have to say it takes a lot of courage to invest the amount, invest how you need to invest to really get the true realization of value.
It is easy to set aside $250,000 for a POC and then have that POC improve a very small part of your business and not have the ability to figure out how to truly go take that capability and expand it across your whole business. Part of the reason for that is because you do that POC and you looked at a very small data set. You looked at the very specific requirements of where you put that POC in place and you’re not thinking about the broader architecture of what is needed to be able to roll that out to a much broader part of your business.
Fortunately or unfortunately, data is such a huge piece of the ability to utilize technology, and so having the parallel thought track of: What do I need to do to make sure my core, my digital core, my data core is clean, covers all of the areas that I need it to cover, is connected in the way I need it to be connected? That is an investment. Sometimes it’s a hard pill to swallow that investment upfront and make sure that capability is there.
The companies that are leading are the companies that have gone ahead and taken that pill and made that investment early to be able to then utilize all of the right technologies that can be utilized off of that clean core.
It’s easy to let an engineer in the field go do a fun experiment. It’s really hard to make that experiment run across your entire organization.
Ali: Are you seeing more of an appetite amongst senior execs willing to make digital a core part of their strategy, where they’re gonna talk about it to shareholders and be held accountable to it?
Amy: I am. I’ll give an actual example because I know that the CEO of Ecolab has been hugely focused on what digital is gonna bring to his business and has talked about it to the Street [Wall Street] and has shared that as being a huge part of his strategy.
There are other companies that are starting to put digital at the forefront and talk about not just cost savings, but what it could actually bring from a revenue perspective, new revenue streams, and thinking about how new products can be created that combine chemical products with digital products. I have another company that I’m working with that really wants to sell their digital capabilities along with their existing capabilities – high-margin – and it really, truly provides a ton of value for the customers.
There are a lot of other companies that are not. And I really think a lot of it has to do with right now they’re so much focused on cost. And like I said, it takes courage to say we should be really focused on cost, we are very focused on cost, but we’re gonna go make this big investment. I think it’s a balance.
Ali: Yes. But if you’re convicted enough and you’ve got a clear point of view on why you’re making the investments, I think regardless of how big that investment is, within reason, the Street is gonna appreciate it.
Amy: Agreed.
Ali: Put like the cost, and I agree with… you said things around risk-aversion, culture, this focus on cost. Is there anything else that you think are holding companies back from larger transformations?
Amy: This might sound a little, I don’t know… risqué for me to say, but I think many of these companies assume that the cycle’s gonna come back. “Why do I need to go do something big and dramatic and drastic? We always see the upcycle come.” So I do think that many companies have been in “hunker-down/let’s just wait/it’ll come back” mode, and I think this down cycle is proving that that’s probably not gonna work.
To me I do think that’s the biggest thing. There’s years of history that says the market will come back. The slowness of the market coming back this time, I think, has been really holding people back.
Ali: Yeah. I am seeing some bright spots just like you are, though. I think there are some CEOs in the industry that are pushing past that now, and they’re being a bit more emphatic on the need for change and they’re pushing their teams to move. But if it doesn’t start from the top we rarely see it take hold. Rarely.
Amy: I absolutely agree with that. I absolutely agree with that.
It’s similar for views on what companies are thinking about how they’re going to… some companies are trying to lead from the front on creating sustainable products for their customers as well. I see the same thinking around digital and sustainability, and around who’s just gonna lead from the front regardless of what administration’s at play, regardless of what regulation is in play or not in play. I think the CEOs that are looking at the long term and looking at what’s going to be most important in 10 years versus next year, I think are the ones that are going to best ride out, quite honestly, these dips in supply and demand.
Ali: Closing question: What’s a big, bold idea that’s brewing in the back of your mind? It may still be a little blue-sky, too early, but what’s an innovation that maybe you’re even seeing from your colleagues outside of Resources that you think we should be paying attention to?
Amy: The thing I talk about with anybody whose ear I can get is what can we be doing to be faster in R&D? The pharmaceutical industry is known for what they do in R&D and the speed at which they can create and test new products. That industry has jumped onto the machine learning/AI bandwagon years prior, quite honestly.
I know many of our clients have dabbled in that space. R&D is really important to this industry, but the ability to do that faster, to not have to rely on hundreds of deep-skilled people and be able to utilize a small portion of people to be able to make a lot of change quickly.
I think it’s important for building sustainable materials, I think it’s important for thinking about cost of R&D… we’re on an upturn and I think the customers are gonna be requiring more innovation. So that ability to be able to do R&D as fast as possible is the number one thing that I think our clients should be focused on.
Ali: I have certainly heard the R&D use case from a number of CEOs now, and that storyline; it could be because of you. It’s picking up some steam in the market. It is hard for me to tell how many are acting on it, but it is certainly an area of interest for sure. There is no doubt about that.
Amy, thanks for the insights. Everyone loves listening to these short, informal conversations from people like you that are helping push the industry forward. So thank you for everything you do.
It’s hard work. I’m alongside you, pounding on these doors and evangelizing. It’s really hard work. But look, there’s no better industry in the world than the one we work in and they need it, and we’ve gotta keep carrying the message. So I appreciate everything you do.
Amy: Great. Thank you so much for having me.
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