AI: Oh no, not again?

For the generation brought up on Douglas Adams’ The Hitchhiker’s Guide to the Galaxy, there’s an unforgettable moment when a spaceship’s maximum improbability drive produces a large whale and a bowl of petunias that hurtle towards the earth. While the whale blithely engages in a monologue about whether the big blue ball is going to be friendly, the bowl of petunias just thinks, ‘oh no, not again’.  

Those of us who lived through the millennium’s dot.com / Y2K bubble and the surge of interest in robotic process automation a decade ago might be forgiven for feeling a sense of déjà vu.  

In fact, we should go even further back in time… 

The spreadsheet analogy

Like AI today, spreadsheets in the 1980s represented a fundamental shift in how information is processed and value is created, moving the professional services industry away from its traditional reliance on manual, labour-intensive work.  

Before spreadsheets, consultants were the gatekeepers of complex quantitative analysis. The arrival of VisiCalc and later Lotus 1-2-3 and Microsoft Excel democratised this capability, enabling financial managers and business analysts within client organisations to perform sophisticated analysis themselves. This forced consultants to shift their focus to strategic advice.  

True, the scale, scope, and speed of what AI can achieve is significantly greater. Adoption is faster: The use of spreadsheets was tied to the steady uptake of cheap personal computers in offices, giving the consulting industry time to adapt, to integrate the new tools, and to retrain its workforce. In contrast, the rapid development of new AI-enabled solutions, combined with the expectations of clients (70% of whom expect the professional services industry to be “significantly” changed by this technology), means the industry doesn’t have much time to adapt. Moreover, spreadsheets are passive tools; they require a human to input data, write formulas, and interpret results. They automate the mechanics of calculation but not the process of thought. AI, especially advanced generative AI, is a more active and autonomous technology, able to generate its own content, identify patterns, and even make decisions with minimal human input. 

But, despite the new and not inconsiderable challenges, the likely impact of AI on the consulting and wider professional services industry will be to deepen and accelerate the trajectory of the last 50 years, in which consultants and other professionals redefine their roles as technology evolves.  

How can firms stay ahead?
Firms have three advantages that they should leverage to stay ahead of AI:  

Expertise: There are plenty of things AIs don’t know and will never experience, all of which contribute to the advice and wider support consultants provide to organisations. Never mind which bits of the internet your AI has access to, it can’t mine the tacit know-how that comes from decades of working with organisations. What AI will quite obviously do is raise the bar for what expertise is, removing many of the people who aren’t experts in the process. And it’s not just AI that’s creating this pressure. Research we carried out last year suggested that two thirds of clients think they know more about their own industry than the consultants they work with. That’s not surprising: Clients spend 100% of their time working in their industry, consultants don’t. More telling was the response to a question about how clients thought this compared to the situation five years ago: Seventy-five percent said that consultants in the past knew more about their industry than they, the client, did. What clients actually thought five years ago is irrelevant, it’s the fact that clients look back and think consultants used to know more and now they don’t, that matters. Worse still, recent research suggests that medical experts may become less, not more expert, when they use AI. 

To be able to work with AI, let alone stay ahead of it, firms will need to invest in expertise as much as they are currently doing in AI.  

Implementation and change: Spreadsheets may have enabled individuals to work more productively, but they only did so on a piecemeal basis. Closeted in their tiny, beige offices, 1980s managers may have been able to move on from the pocket calculators, but they still worked in silos. From a corporate perspective, it was the arrival of workable enterprise resource planning systems (also in the 1980s) that created the business information that enabled the industrial restructuring of the subsequent decade. The scale of these changes—like those of AI—don’t just happen by themselves. They require people to change—and people to help make that change happen.  

Again, the threat here comes not from AI, but from a potential failure of consultants to implement. The evolution of consultants from analysts to strategic advisers in the 1980s was followed by a second shift, from advisers to doers. Today, only a fraction of the revenues of “strategy” firms is earned from traditional corporate strategy work. You only need to glance at their websites or scan the acquisitions they’ve made over the last 20 years to see how they’ve responded, not only to clients’ demand for tangible results but also to the growing dominance of the Big Four business model. But the senior clients we interview still bemoan the lack of results delivered in practice. 

If consultants can “do” more than AI, they need to prove it. 

Accountability: Love or hate consultants—and most clients do both—they can at least be held accountable. We’ve all known the frustration of trying to find a number to call when we have a problem with, say, an online delivery. We just want to speak to a person who will fix it. Fixing stuff is ultimately the value proposition of the entire consulting and professional services industry: Whether you’re a lawyer or an outsourcing company, a PR firm or a consultancy, you fix stuff—and AI can’t. 

But accountability is complex and can be nebulous. If you’re the CIO of a major multinational, launching an organisation-side transformation programme, you don’t just need to work with someone who’s done it before and who understands the human challenges of change, but with someone you can blame when it goes wrong. Consultants and other advisers are an insurance policy: You bought the best advice, what more could you have done? AI may indeed be more autonomous, but it cannot be held to account. The trouble is that consulting firms are understandably reluctant to be held accountable. Where there is a problem, it’s rarely clear what or who caused it, and the result can be labyrinthine legal cases that last for years. 

Consultants can be held to account, AI can’t.

Countering these issues will ultimately depend on consulting firms’ willingness to take risks. In practical terms, that means being more likely to be paid based on what they’ve delivered than they are today. But it will also constitute a moral shift, a commitment to fix things. Expertise and the ability to implement will help the consulting industry stay ahead of AI. Fixing stuff: That’s the real revolution. 

What can firms do next? 

It may feel like AI is a threat to how the professional services industry operates, but firms have advantages over AI that they can leverage to ride this new technological wave rather than drown in it. To learn more about clients’ attitudes to AI and the barriers to implementation, read our latest Emerging Trends report—it’s full of forward-looking insight to anticipate change and uncover new growth opportunities in a rapidly developing field. If you would like to speak to one of our experts for insights that are more tailored to your firm, get in touch.