The Times Australia
The Times World News

.
Times Media

.

Artificial intelligence is taking the consulting industry by storm – should we be concerned?

  • Written by Tapani Rinta-Kahila, ARC DECRA Fellow / Lecturer in Business Information Systems, The University of Queensland

Artificial intelligence (AI) is enjoying a long moment in the spotlight. But debate continues over whether it’s a “shortcut to utopia[1]” or possible harbinger of the end of the world.

Meanwhile, one group has quickly leapt on both the technology and all the hype – consulting firms. And they’ve been spending big[2].

Advocates[3] of the technology are heralding a new era of professional efficiency for consultants. Once-tedious emails, presentations and reports can now be completed in a flash.

Many consulting firms have also already leapt at the opportunity[4] to professionally advise other businesses on making the most of new generative AI tools.

So why does the consulting industry see such potential for transformation – and is hurling itself headfirst at this technology a good idea?

Read more: Beware businesses claiming to use trailblazing technology. They might just be 'AI washing' to snare investors[5]

Wait, what do consultants do?

The consulting industry is notoriously shrouded in mystique[6], despite regularly winning huge contracts from governments and major businesses.

But in simple terms, consultants aim to offer their clients expert advice and solutions to help improve their performance, solve problems and achieve certain goals.

They often possess specialised knowledge, skills or experience relevant to a particular client, so the nature of their work can vary significantly.

Clients often seek consulting services because they want help with problem-solving and decision-making on a particular project, or want external validation for their decisions and need an independent report.

A wide range of professional services firms offer consulting services, including the “big four”: Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY) and KPMG.

Logos of the big four accounting firms: KPMG, PwC, EY, Deloitte
The ‘big four’ professional services firms have all invested heavily in generative AI. Diego Fedele, Joel Carrett, Dan Himbrechts/AAP[7]

There are also many specialist consulting firms, including McKinsey, Bain & Company, Boston Consulting Group, Kearney and L.E.K. Consulting.

Much of the demand for consultancy services is driven by the increasing complexity of doing business, due to globalisation, digitalisation, changing regulations and many other factors.

However, growth in Australia’s consulting sector has slowed[8] this year amid the fallout from the PwC tax leaks scandal and sluggish economic growth.

How can AI help?

Artificial intelligence (AI) technology has been around in a range of forms for a while now. But until recently, it was mainly used internally by organisations and required specific training. This changed with the public launch of “generative AI” models, such as OpenAI’s ChatGPT.

Artificial intelligence AI Chat GPT with OpenAI logo seen on a phone screen
ChatGPT thrust generative AI technology into the mainstream. Markus Mainka/Shutterstock[9]

These models differ from traditional AI in their capability to generate something new, such as text that is virtually indistinguishable from one written by human, or other types of output such as images, videos or sounds.

Large language models like ChatGPT were some of the first to give the general public a sense of what AI could be used for.

But this has had some specific implications for consulting businesses. The models can analyse large amounts of data quickly and cheaply to generate tailored feedback.

With generative AI offering such efficient services for business analysis and strategic planning, many would-be clients might now be questioning whether buying consulting services will remain worthwhile in the long run – particularly as these technologies improve.

Getting ahead of the curve

It should therefore come as no surprise that the consulting industry is investing heavily in generative AI. Just take the big four, for example.

Deloitte[10] and EY have already deployed conversational AI assistants aimed at boosting staff productivity.

KPMG’s customised version of ChatGPT – KymChat – was launched in March to speed up[11] the preparation of sales proposals for consulting work, by quickly identifying relevant experts.

In May, PwC became OpenAI’s biggest enterprise customer[12] after purchasing more than 100,000 licences for the AI giant’s latest models.

Other players operating in the knowledge work space have also been hyping up the productivity-boosting potential of generative AI for similar tasks.

US finance behemoth JPMorgan Chase recently rolled out[13] its own large language model called LLM Suite, which it says can “do the work of a research analyst”.

What does this mean for the business model?

To harness this technology’s potential, firms will need to use it effectively. This means ensuring they maintain a human-centred value proposition for clients that goes above what the technology alone can offer.

Generative AI tools will not replace the human trust that is often crucial for successful consulting, nor provide the depth of specialised knowledge (and access to relevant human experts) that a seasoned consultant currently can.

Businesswoman writing while talking on phone
Seasoned, professional consultants often have access to a network of expert contacts, which is hard to replace with AI . Ground Picture/Shutterstock[14]

But the technology will streamline a lot of everyday tasks. It can also provide a sounding board for decisions and business strategies, and suggest solutions.

At least in the near term, firms are likely to use AI to “augment” human consultants, rather than replace them.

What are the risks?

The uptake of generative AI also presents risks to the consultancy business.

One big one concerns creativity. Since the models produce their outputs based on past data, the range of potential solutions they can identify will always be limited to their training data.

Excessive reliance on the same models could start eroding consultant companies’ ability to innovate, by diluting their distinct competitive advantages and make them increasingly resemble each other.

Such a phenomenon has already been observed in research[15] looking into generative AI’s effect on student creativity.

My own research[16] has shown that excessive reliance on automation technologies like generative AI can lead to the erosion of professional expertise. In the long run, this effect could seriously organisations’ knowledge and business reputation.

If younger consultants still in training offload too much of their thinking and analytical work to generative AI, they may fail to develop their own analytical abilities.

And of course, the technology itself isn’t perfect. Generative AI is known to make mistakes and even “hallucinate[17]” – that is, completely make things up.

All of this highlights the importance of using generative AI thoughtfully, and perhaps above all, not losing sight of the unique value humans can bring.

Read more: What happens when we outsource boring but important work to AI? Research shows we forget how to do it ourselves[18]

References

  1. ^ shortcut to utopia (www.vox.com)
  2. ^ spending big (www.afr.com)
  3. ^ Advocates (www.afr.com)
  4. ^ leapt at the opportunity (www.nytimes.com)
  5. ^ Beware businesses claiming to use trailblazing technology. They might just be 'AI washing' to snare investors (theconversation.com)
  6. ^ shrouded in mystique (www.economist.com)
  7. ^ Diego Fedele, Joel Carrett, Dan Himbrechts/AAP (photos.aap.com.au)
  8. ^ slowed (www.afr.com)
  9. ^ Markus Mainka/Shutterstock (www.shutterstock.com)
  10. ^ Deloitte (www.theaustralian.com.au)
  11. ^ speed up (www.afr.com)
  12. ^ biggest enterprise customer (www.afr.com)
  13. ^ rolled out (www.ft.com)
  14. ^ Ground Picture/Shutterstock (www.shutterstock.com)
  15. ^ research (theconversation.com)
  16. ^ research (theconversation.com)
  17. ^ hallucinate (theconversation.com)
  18. ^ What happens when we outsource boring but important work to AI? Research shows we forget how to do it ourselves (theconversation.com)

Read more https://theconversation.com/artificial-intelligence-is-taking-the-consulting-industry-by-storm-should-we-be-concerned-232149

The Times Features

Designer Wardrobe reports surge in pre-loved wedding gowns

As Australia’s wedding season approaches, and amidst a challenging cost of living backdrop, new insights from Designer Wardrobe reveal that Australia and New Zealand (ANZ) brid...

DIY Bathroom Remodel: Essential Tips for a Fresh Look

As the home improvement craze continues to grow, more folks are diving into the world of DIY projects to transform their living spaces. Among these, bathroom remodels have gain...

STI rates are increasing among midlife and older adults. We need to talk about it

Globally, the rates of common sexually transmissible infections[1] (STIs) are increasing among people aged over 50. In some cases, rates are rising faster than among younger pe...

The Gift That Keeps Growing: Why Tinybeans+ Gift Cards are a game-changer for new parents

As new parents navigate the joys and challenges of raising a child in the digital age, one question looms large: how do you preserve and share your baby's milestones without co...

Group Adventures Made Easy: How to Coordinate Shuttle Services from DCA to IAD

Traveling as a large group can be both exciting and challenging, especially when navigating busy airports like DCA (Ronald Reagan Washington National Airport) and IAD (Washington...

From Anxiety to Assurance: Proven Strategies to Support Your Child's Emotional Health

Navigating the intricate landscape of childhood emotions can be a daunting task for any parent, especially when faced with common fears and anxieties. However, transforming anxie...

Times Magazine

Take the Fear Out of Vaccinating Your Pet at Home

Definition of Pet Vaccination Pet vaccination at home is becoming an increasingly popular option for pet owners who are looking for convenient and affordable ways to ensure their pets receive the vaccinations they need. Vaccinating your pet at h...

The Seamless Transition from Blogs to AI-Enhanced Videos

The stuff we see and do online keeps changing because new technologies and websites pop up. We use different things like words, pictures, sounds, and videos. Blogs are one of the oldest and coolest ways people share their thoughts online. They us...

The Power of Tech in Business and How Mobile Solutions are Changing the Game

Technology is not just an option but a necessity, particularly in today’s fast-paced business world. From mobile apps to cloud-based accounting software, businesses are now more tech-driven than ever. Whether you are running a small local operation...

Secure Your Precious Cargo With Car Seat Installation

The experience of traveling with kids is unique, but it can also be anxiety-inducing. It's crucial to ensure that your children's car seats are installed properly if you want to guarantee their security and safety while you're driving. You may fe...

Fair Dinkum! Aussie slang takes a decade to learn

- New research shows just how foreign Aussie culture is to migrants- Takes 10 years for the average expat to have a confident grasp on Aussie slang- Queensland expats pick up slang faster than in other states- More female expats will try Vegemite vs...

Life-Saving Hacks for Working Moms

Being a mom is hard work – it’s the most amazing job you’ve ever had, but also the most exhausting. It’s deeply rewarding as well, but there are days when you’re simply running on a very low battery. As a working mom with not much spare time, you c...