Can consultants reinvent themselves once again?

Generative AI platforms share a few traits with consultants. Both are now ubiquitous, both seek to embed themselves in business operations and both ingest valuable information from elsewhere and sell it back to users as tailored solutions to specific questions.

It remains a stretch to imagine AI replacing consultants completely, as some doomsters predict and plenty of consulting’s critics hope. But it is also clear that wider access to plausible, well-informed, deftly presented advice, supplied by a machine rather than an expensive PowerPoint-toting human being, is posing new challenges to the business model.

At Accenture’s investor day this week, chief executive Julie Sweet mounted the case for the defence. It is based on her conviction that big IT-centric consultancies like hers have “the breadth and the talent to be able to help [clients] achieve their [AI] ambitions”. Meanwhile, strategy consultants such as McKinsey, Boston Consulting Group, Bain and countless smaller boutiques stand ready to offer the road maps that companies need.

The big firms were the superintelligence once, or claimed they were. But AI could undermine their old power “to persuade people that [the] ability to solve problems was just as inspired as the solutions themselves”, to quote Duff McDonald’s 2013 history of McKinsey, The Firm.

Clients are increasingly looking to machines to do the problem solving, particularly at the less complex end of the market. Where companies require help with the most difficult AI problems and adoption, they may be more likely to turn to consultancies that can attract the most skilled deployment engineers. Indeed, AI labs and talent magnets such as Anthropic and OpenAI are themselves now chasing high-end AI consulting business.

The economics of the established consultants are creaking as a result. Simple mandates used to be overpriced and farmed out to junior staff, subsidising the trickier work. Companies are now taking the basic jobs in-house and handing them to AI to complete. Consultants’ inability to bill the hours spent prepping a slide deck that an AI agent can churn out easily should eventually focus clients and their advisers more sharply on payment for results. That would be positive. But the transition could be painful.

Still, consultancies have not survived as long as they have by missing disruptive business trends. They spotted early that AI would be the next technology both to discombobulate and excite the boardroom — and leaned into it. Many firms have already hedged their bets by establishing cheaper automated offerings that clients can purchase off the shelf. They have emphasised the juicy efficiencies AI offers and embraced the technology quickly in their own work, demonstrating its value (and sometimes inadvertently highlighting its pitfalls by, for instance, publishing reports polluted by AI hallucinations).

Change is usually good news for change experts. From the arrival of the internet, via digitisation, Big Data and the cloud, consultancies have found ways to convince clients to pay for advice, reassurance and technical input. Sometimes they win mandates because boards lack the guts to push through destabilising changes on their own and prefer to pay “a few hooded executioners”, to quote Alexander Starritt’s description of a fictionalised McKinsey restructuring team in his state-of-capitalism novel Drayton and Mackenzie. Sometimes executives need someone to blame if their strategy stumbles.

More positively, directors and executives will often reach for a firm hand to hold when their world is shaken by uncertainty. As AI becomes ever more present and capable, the question is not whether businesses will still need that reassurance, but how much of it they will want delivered by flesh-and-blood rather than silicon. Consultants will have to polish their pitch once more.