AI will cost professional services more money than it earns them in 2024

Firstly, there’s the extent to which this technology, which suddenly hit mainstream business consciousness early last year, will be adopted by client organisations and thereby generate considerable revenues for professional services firms. Secondly, there’s the growing pressure for professional services firms themselves to be equipped for AI-enabled delivery. The first will increase firms’ revenue; the second will increase costs. 

Our most recent data on the first of these aspects—AI’s revenue-generating ability—looks less promising than it did in Q2-Q3 last year.  

In the summer of 2023, we found that 85% of clients were experimenting with generative AI to some degree. Even back then, the 14% who said that they were already making extensive use of this technology felt optimistic, but “extensive” is a subjective term and, if one thinks about the long-standing use of AI in some organisations (in financial services, for example), not wholly implausible. What mattered most was the overall message: Many client organisations were investing in this space, and others were watching closely to see how they’d get on. 

Fast-forward to data gathered at the start of this year, and the picture looks very different: Just 13% of clients now say they’re starting to experiment or are making some use of generative AI, and none say they’re already using it extensively. By contrast, 88% were in the wait-and-see category, a sixfold increase on the previous results.