Our most recent quarterly client survey suggested that over 80% of clients have paid consultants to help them, principally around using this technology to improve decision making and customer interactions, as well as to increase productivity (for more information on what AI services clients are buying today, see our last leadership market update). Forty-five percent expect to use a significant amount of external support around AI in the next 12 months.   

Clients are buying and planning to buy external support around AI.

Despite this, almost all our conversations with consulting firms indicate widespread disappointment at the level of paid-for AI-related services. The consensus is that demand is being squeezed, on the one hand, by clients trying to do much of the work around AI adoption themselves and, on the other, clients focusing what money they have on preparing their data and technology infrastructure for AI adoption. With money tight on the supply side, too, firms’ investments are being quietly slowed down and descoped.  

But is that the best thing to do right now? Can firms be more confident that this is a market worth investing in? 

Our analysis suggests some consulting services (we call them “blockbuster” services) enjoy significantly higher-than-average growth over a sustained period, and this is driven by four consistent factors:

• Resonance: Blockbuster services don’t appeal to niche groups of clients. While they may start in boardrooms around the world, they don’t stay there. They impact all of us, not just senior executives. Think about sustainability: One of the reasons why environmental consulting didn’t take off in 2005-10 was that there was very limited awareness of the potential threat to the planet; we had to wait until around 10 years later when the public and wider stakeholder groups became more engaged.  
• Novelty: One of the most important reasons why organisations bring in external support is that they lack the expertise to deal with new and unfamiliar challenges. With more than 70% of clients describing their organisation as being “severely short-staffed”, a proportion that if anything has been creeping up with time and, more recently has been bolstered by hiring freezes and lay-offs on the client side, “expertise augmentation” plays a critical role in ensuring that client demand remains high.  
• Impact: The more clients are confident that, if they act, they’re going to see tangible results, the more likely is it that a consulting service will acquire blockbuster status. 
• Scale: Consulting services, like plants, need food and fertilizers to help them grow. But firms will only invest if they can see large-scale projects further down the line, to give them a return on their investment. The fact that first-generation environmental consulting projects were small and specialised was another nail in their coffin. 

True blockbuster services tick all four of these boxes: Miss one, and the rate and timing of growth collapses. This means that genuine consulting blockbusters are almost black swan events. The only area of consulting that currently qualifies is cybersecurity: We’re all vulnerable to it; new incursions are constantly emerging so senior executives will always need new help; cyber projects are huge; and clients can see that their actions reduce their exposure.  

Will AI consulting be a blockbuster? 

There’s no question about resonance. Our research indicates that almost 80% of senior executives would describe themselves as being “very familiar” with AI and the capabilities it offers. Seventy-seven percent say they’re already using AI, with 47% doing so to a great extent. Novelty is making its presence felt through unfamiliarity: 61% of clients say that there’s some degree of pushback around AI in their organisation, with 26% describing this as “significant”. When we ask clients what’s triggering this pushback, the most cited reason is a lack of understanding about AI. Moreover, the more senior people are, the more concerned they’re likely to be. Asked about the impact AI has had on productivity in their organisation, 46% of clients say they’ve seen improvements of 11-25%. While this is implausibly high—if true, we would have seen a widespread transformation in profitability and growth—it’s a measure of clients’ experience: Most feel that AI is having a positive and material impact. 

What’s less clear is the scale of projects being generated by AI, especially with—as we noted above—clients either doing what they can themselves or investing in areas (such as data architecture) that will support AI, but indirectly. The best way to understand the likely evolution of this market is to think in terms of an iceberg. The visible market for AI work is currently smaller than expected, but there’s a lot of activity going on below the water line that could be described as AI-related but that is embedded in other technology and data-related work. There’s a danger here, which we’ve noted with potential blockbusters in the past (such as data and analytics), that firms underestimate the future size of the market and are too quick to cut back on their investment. Instead, by drawing clients’ attention to the concrete impact AI is starting to have, they can help increase the amount of AI-related work that’s visible—above the waterline—and that will, in turn, stimulate growth.  

AI does have the potential to be a blockbuster service—but only if firms put less effort into fuelling the hype and more into demonstrating the concrete results that their consulting support on AI is having. 

What can firms do next?   

If you’d like to understand the barriers clients are facing to AI implementation, and so where consulting services could have most impact, then do look at our latest Emerging Trends report. It will help you frame the conversations you have with clients about the value you can create for them in the AI space. In Client attitudes to AI and barriers to implementation today, we provide a snapshot of what really matters to clients about AI in their businesses and where Source analysts think the opportunities are for firms. To find out more, download the report or contact us for a one-on-one conversation about the valuable data we have on this evolving topic.