When we asked 150 senior executives in large organisations across a range of major consulting markets what they thought about ChatGPT and similar tools, 83% said it’s either relevant to their organisation today or could be in the future. But 87% said that it would replace some of the work done by external consultants in the future (see figure 1).

This poses consulting firms with two not unfamiliar questions. 

The first is whether clients will view this technology as a means of reducing their consulting bill, or as a way to get better consulting solutions. Over the last few years, aided by the highly tech-enabled pandemic world, clients have moved from seeing consulting tools as a justification for demanding reduced fee rates (they wanted to benefit from what they assumed were lower delivery costs) to regarding them as a reason to pay premium prices (because tools can be tangible differentiators).  

It seems likely that generative AI may go through the same evolution: It will initially be viewed as a way to deliver consulting services more cheaply and quickly—and certainly that’s what most clients and firms we meet are talking about.

"Generative AI will initially be viewed as a way to deliver consulting services more cheaply and quickly."

Over time, however, as this technology is applied to larger and more complex problems, it may well become a cornerstone of better consulting solutions. But this won’t happen without supply-side investment and, especially in the current climate, when consulting profits are under threat from salary inflation and over recruitment, it may be difficult for firms to ignore the short-term temptation of using the technology to replace expensive consultants.

Outpacing the rest

That opens the door to the second question, the one that consultants may not just be asking themselves, which is whether some firms can find a way to use this technology for competitive advantage, perhaps even to disrupt the industry.

In another recent article on this blog we noted that clients appear to be more aware of potential new consulting-firm competitors than they were five years ago, and our research suggests that they think the latter have different strengths to incumbent players, including better use of technology. It’s not impossible, therefore, to imagine that some of those agile players will be quick to use AI to drive product and service improvements.

But existing market leaders are by no means out of the running here: All it will take is one Watson-like moment, in which a firm launches a service that delivers demonstrably better results for clients because it combines smart technology with intelligent experts, for that firm to create a lead that others firms will find hard to follow.