The digital revolution, which originated back in 1975, and the technologies associated with it, have impacted our day-to-day life in a very broad way. Nowadays, a lot of these technologies are indispensable, from the rise of the internet to the invention of the smartphone.
The next milestone of this technological change is most likely to be the broad implementation of artificial intelligence (AI), especially in the workplace. In this article we will focus on the impact of AI on the consulting industry. How will this new technology affect the functioning of consulting companies and the daily work of consultants? Can technology companies take over the market of consulting companies? What qualities and skills should a consultant of this new era have?
In this article we aim to answer these questions, among others, with the help of Piotr Miednik, CFO Advisory Director at JP Weber.
AI, one of the drivers of the future?
First of all, we must realize that the implementation of AI in the workplace is not speculative, or in the future, it’s an ongoing process that has already been put into practice in a lot of industries. According to a Narrative Science survey (2017) the number of companies implementing AI into their business activities rose from 38% to 61% in just one year. Furthermore, the study showed that around a quarter of these companies use AI for predictive analytics, while use it for machine learning. Piotr Miednik is aware of these developments and estimates that the consulting industry will show comparable numbers in the years to come. Thus, he considers that it will become common to conduct analyses and verifications using AI, especially in the area of financial consulting. Furthermore, Mr. Miednik added the following:
"A company that successfully starts ‘breeding’ AI […] will win, because by building such a tool it will create a tireless, faithful, effective analyst who will be able to work 24/7 ”-
Will AI make consultants redundant?
Considering the previous quote, the question should be asked how AI will affect the employment structure in consulting companies. Although at the moment we do not observe a significant reduction in the employment of analysts, the progressing automation of processes, the implementation of bots and AI in the next few years will lead to a situation in which certain analytical positions will become redundant. It is worth noting that already now consulting companies often provide ready-made tools and teach their clients’ employees how to work with them. Although such a solution allows you to maintain a long-term cooperation and yield recurring revenues related to the subscription, it does eliminate some of the consultants' daily work.
Nevertheless, a scenario in which AI completely replaces consultants doesn’t seem very likely. There are several reasons for this. First of all, consulting is a highly relational job, which is largely based on building relationships and trust. Secondly, sectoral knowledge and understanding of very specific business areas is also of great importance. Even in the long run, it will be very difficult to develop AI in such a way that it masters and balances these two aspects in a human way. Piotr Miednik puts it as follows:
“Of course, in the future, companies whose services will be 100% provided by AI will surely be created - these companies will find their clients -, also due to innovation and the marketing aspect. However, I do not believe that in the next 20-30 years this model will be able to replace the work of consultants. "
Will IT giants take over the consulting market?
There’s a growing importance of technology in consulting services and some large technology companies might be better placed to serve clients thanks to AI. Against this background, one might wonder whether IT giants will take over the consultancy market one day. In fact, some technology companies are already trying to enter the market by offering consulting services.
However, taking into account the financial resources, know-how and the strong market position of the largest players in the consulting industry, it is hard to imagine such an outcome. Long-term alliances or joint venture cooperations between consulting and technology companies seem more likely. In this context, it is also worth noting the rising trend for big consulting companies to buy technology companies, to make sure that they remain competitive. Mr. Miednik provided us with the following illustration:
"A great example is Accenture, which has been successfully taking over technology companies for years, integrating them into its structures and then using their tools to automate work"
Who is the consultant of the future?
As can be seen from the above analysis, the consulting industry is on the verge of some very interesting changes that will affect both the way companies operate and the characteristics of the work of the consultants themselves. This means that future consultants will have to adapt to the changing environment. Thinking about the consultant of the future, we can take the largest consulting companies - such as ‘the big three’ - as an example. To get hired at one of these firms you not only need great knowledge of the business world, but also technical skills. Data analysis, transformation, processing or even programming are becoming the daily work of the best advisors. Piotr Miednik strengthens this claim:
"I believe that technological consulting related to the implementation of new systems and process automation is an industry that will gain even more importance in the coming years, and the skills acquired in this area will allow you to secure your position on the labour market"
Thus, to succeed in the current consulting world it is necessary to constantly follow new trends - not just the business trends but also the technological changes.