Technology has been front-of-mind for clients this year. Indeed, in our annual Market Trends survey we asked clients about the critical issues being discussed at their leadership tables, and the top three responses all related to tech. So, throughout 2024, we invited industry experts onto our podcast to discuss what clients want in this space and the implications for consulting firms.
Here, we summarise the key points from our favourite technology-related episodes, within our The Future of the Firm and Business Leader’s Voice series, and share the key themes.
From our Technology Market Trends report: Seventy-six percent of technology consulting buyers said that investment in generative AI is critical to their organisation.
Trends and challenges for firms in 2024
With ChatGPT generating buzz throughout 2023, we kicked off the year by asking Source’s CEO, Fiona Czerniawska, and Associate, Margaret Cameron-Waller, how they thought the trend would unfold. They explained that while it may grow to become a giant, GenAI was actually still a baby in relative terms. Clients see it as a major topic and want to know more about it, but at that point in the year they predicted that 2024 would see clients seeking out advice on the topic but not yet buying much implementation or large-scale AI transformation work. This has largely lined up with what we’ve seen throughout the course of the year, with clients first wanting to see concrete use cases and firms themselves using AI in their service delivery. Our research suggests that firms are likely to have to invest in AI themselves for some time before they start seeing a significant return on that investment in terms of client demand.
We will be talking to Fiona again, early in the New Year, to ask her about the trends and challenges she predicts for 2025. Click here to be notified when that podcast is released!
Rethinking digital talent in an AI-ambitious world
Gianluca Barletta, Global Head of Data Science at PA Consulting, joined Fiona and Source’s Head of Content, Emma Carroll, to discuss the impact of AI on talent and ways of working. Gianluca describes the rise of the “intelligent enterprise”, an organisation that is augmented by tech while still putting humans at its centre.
They discuss the importance of being data-ready when it comes to AI: Many organisations underestimate the extent to which they will need a strong foundation of robust data to be able to adequately support their AI ambitions. To this end, everyone in the organisation will need to be trained to become a data custodian, taking on responsibilities like the ethical handling and categorisation of data.
Gianluca emphasises that AI will most effectively be used to do the less value-adding tasks, to free up more time for impactful work. While there are fears about the impacts of AI on the workforce, there are also many new roles that will be needed to facilitate AI adoption. These can be divided into three main categories:
- Trainers: those that develop the AI technology, such as engineers and data scientists.
- Explainers: those that make AI easy to use, such as UX designers.
- Sustainers: those that make sure AI is used in the best way possible, such as content creators.
Fiona and Emma sat down with James Byles, Partner and UK AI Service Delivery Transformation Leader at Deloitte, to discuss how both clients and firms are using AI. James flags many considerations for those embarking on their AI journey, such as starting with the simpler tasks like automating repeatable deliverables, the importance of educating employees on how to write the best prompts, and thinking about how best to price and value AI-enhanced services.
James emphasises that we are probably overestimating the capabilities of AI in the short term but underestimating its long-term impact. For instance, AI might one day have the ability to carry out continuous audit, which would be a big industry disrupter.
At this stage, clients are primarily interested in knowing how firms themselves are using AI—coming to them with key questions about practical aspects such as how their risk processes are dealing with the rollout of artificial intelligence. James also stresses the importance of engaging everyone in the AI conversation: Younger colleagues may have a more forward-looking vision of where this technology can take the business, and forging alliances with third-party technology partners with exciting tools could be a great opportunity. This podcast is full of hands-on experience and honest reflection.
“One thing we’re also saying to our colleagues is: Remember [AI right now] is the worst that it will be. We’re on day one of a journey, and it’s going to get better as it evolves and as it develops over time”
The big tech challenges in a digital-first bank
Jason Maude, Chief Technology Advocate at Starling Bank, joined us to discuss the challenges of being digital-first in an industry with stringent regulations and traditional ways of operating. Banks need to have clients’ trust, and with a digital-first bank you therefore need to trust the tech. The changing nature of tech is therefore a big risk consideration in an organisation like Starling, whether that’s in relation to their own internal tech updates or threats from the outside world like cybercrime.
Jason discusses the merits of releasing software updates frequently and rapidly. By releasing code multiple times a day, each change is relatively small, meaning that while there is a high probability that something may go wrong, the impact will be low. Organisations that carry out major updates less regularly may have a lower probability of things going wrong, but the impact will be far higher, making it a lot riskier.
The tech consulting market trends and opportunities
Emma and Fiona caught up with Ismail Amla, Global Practice Leader at Kyndryl, to discuss the key drivers in tech consulting, such as regulation, innovation, sector-specific digital transformation, and client demand for AI.
Ismail notes that while clients are looking to AI for answers, it is important to consider what outcomes they’re actually seeking. AI might not always be the right solution; there are other technologies that could better fulfil their needs.
Ismail discusses the mutually beneficial opportunities for alliances: New technology entrants are wanting to partner to gain access to clients, and firms can benefit from savvy new technologies in exchange. Fiona warns that firms should be thinking about how they can differentiate their ecosystems, as our data suggests that clients struggle to differentiate them from each other. One way to do this would be to focus on the sector-specific parts of the ecosystem.
The role of AI in tax services
Fiona and Emma sat down with Marna Ricker, Global Vice Chair for Tax at EY, to talk about how quick the tax industry has been to adopt AI. This has largely been driven by the need to improve personal productivity and both back- and front-office transformation.
Marna breaks down the three layers of using AI in tax:
- Level 1: Digital assistance for simple tasks that can save significant time e.g., drafting emails, meeting notes, and summarising documents.
- Level 2: Point solutions, e.g., product classifications, contract summarisations, and invoice data extraction.
- Level 3: Integrated AI ecosystems, e.g., tax-infused supply chain strategy.
Crucially, AI will add value in the tax sector with its ability to gather, manipulate, and store data. Already, AI is giving us the ability to be ‘conversational’ with data, to ask questions and have the answers pulled out in real-time. As such, it is critical that AI is responsible and transparent about how it reaches its answers.
“Today, we have people doing processes enabled by tech. Tomorrow we’ll have tech—powered by data—executing processes, managed by people asking the right questions and reviewing.”
What are the big trends?
- Overestimating and underestimating AI – We may be overestimating what GenAI can do in the short term, expecting it to revolutionise our work processes while the technology is still in its early stages. For now, it is best placed to help with automation to free up more time for value-adding work. However, we may be underestimating the power of this technology in the long-term, particularly when it comes to innovation.
- Strong data foundations – Clients and firms alike are eager to use AI, but they may be underestimating the investment they will have to make to use it to its full potential. AI is only as good as the data it is working from, so it’s crucial to invest in building a robust foundation as the first step on any AI journey.
- Becoming ethical data custodians – Using AI to store, categorise, and manipulate your data comes with ethical considerations. Everyone will need training on how to responsibly handle data and check the quality of AI’s work.
- Considering other solutions – AI is the buzzword, with almost all organisations thinking about how it can enhance their work processes. But it’s important to listen to the client’s underlying needs and find the solution that works best for them—and this might not always be AI.
- Building partnerships – There are many agile new technology entrants offering exciting new technologies. Firms should be looking to forge alliances to access these tools themselves to offer the best solutions to their clients.
Hannah Walker, Editor, Source
If you’d like to delve further into the client needs which will shape current and future demand for technology services, please do get in touch, we’d be more than happy to discuss how we can help.