AI – Disrupting the Disruptors

There's something of an irony in the fact that AI is now disrupting consultancy businesses the world over, the very sector that has been advising others on how to deal with technological change over the decades...

The "Big Four" audit and advisory titans — Deloitte, PwC, EY, and KPMG — have already cut thousands of roles. 6,000 UK roles were lost in 2023 alone, and a further 9,000 cuts are slated for this year globally. While some of this slowdown is a result of broader economic prudence, a big factor is AI itself.

The End of the Pyramid Model?

Consultancy has long relied on a pyramid model: a large number of junior professionals doing research, data work, and dull tasks, overseen by smaller numbers of senior professionals. But AI is likely to upset this system...

Software like ChatGPT and other AI programs can now accomplish much of what junior professionals used to do: summarizing briefs, crunching numbers, reading contracts, and even writing long reports. It's awkward questions like these that lead one to suspect that battalions of junior consultants are not required. If a great deal of the "grunt work" is mechanized, the pyramid does begin to look unstable.

Adapting to Survive in an AI World

Back to irony again: we've now got consultancy firms who rauther than relying on billable hours for junior staff, themselves rely more and more AI solutions to customers and clients may ask themselves why they need to pay top dollar when algorithms can do much of the grunt work.

So the more effectively these firms utilize AI tools, the more they risk annihilating their business model.

Final thoughts...

In a nutshell the consultancy industry has been steadily eroding the very foundation of its profitability. I

n the long run, firms may need to reinvent themselves anew with less reliance on conventional analysis and more on strategic vision, human judgment, and moral compass in an AI environment.

But none of that sounds like consultancy in the classic sense of the word.