Deploying AI: Think big, start small
Many consulting firms are pinning their growth ambitions on AI-related services, fuelled by the eight out of 10 clients who’ve paid for this type of consulting help in the last 12 months. But growth depends, not just on the number of projects, but also on their scale. And here the picture is complex.
AI and business model change
Scale is critical.
The size of projects is one of the key factors that determine whether a specific consulting service will reach “blockbuster” status—which we define as growing significantly faster than the market average for a sustained period of time.
Genuine blockbuster services are few and far between but can have a significant impact on overall market performance. Cybersecurity, the only service line in the current market that ticks all the boxes for being a blockbuster service, has seen growth of around 11% per annum since 2023, roughly twice the rate of the overall professional services market.
AI consulting has some of the hallmarks of a blockbuster service: AI adoption is a new opportunity—and challenge—for the current generation of senior executives, and the technology is constantly and rapidly evolving. But there are questions over two other aspects. Will AI generate enough large-scale projects to encourage consulting firms to continue to invest in it? And will the adoption of AI generate a clear, positive return on investment? Both are important, and consulting firms can have a hand in turning the answers from “maybe” to “yes”: By writing thought leadership about AI, consulting firms impel clients to make use of it; organisations that realise a benefit from implementing AI will encourage others to follow suit.
It certainly bodes well for firms that 39% of clients who have bought AI support say they’ve done so to change their fundamental business model in the last 12 months.
But there’s a risk in automatically assuming that projects that change business models have to be large, and that only big projects can create the ROI that will take demand to blockbuster levels.
Large oaks from little acorns grow
One of the best aspects of my job is to speak to senior people in very large, global organisations to understand how their use of consulting and other professional services is changing. Every once in a while, an interview really stands out.
That was the case with a conversation I had with a very senior police officer about 10 years ago. This was the first wave of digital transformation, so I asked what the word transformation meant to him.
“Connectivity everywhere, big data, analytics, joined up thinking,” he said.
“Great”, I said. “What type of consulting support are you using to help you transform the police force?”
“We’re not,” he replied, cheerfully.
Given he’d ticked the box with the interview screener to say that he’d spent a substantial amount of money on consulting services, I tried again.
“Ah,” he said. “We’re not using consultants to help us with transformation. We’re using them to support our implementation of bodycams.”
And bodycams would transform, he argued, the gathering and use of evidence, and ultimately policing. Yes, there were roll-out costs and there was work to be done to store and analyse the data collected, but this project was considerably cheaper than ERP system the police force had just put in.
Consultants may like writing about big ideas, but clients don’t much like buying them. Point solutions—smaller ideas—have a more focused application, are easier and faster to put into practice, and have a clearer positive ROI. Point solutions that are focused on a very specific, deep-rooted problem (how to improve evidence gathering, where police forces are concerned, for example) create disproportionately high returns. They also provide concrete proof that technology can dramatically change the way entire organisations work and give clients the confidence to invest more.
As we found with digital transformation a decade ago, long-term demand for AI–related support will start small before it grows big.
What next for consulting and professional services firms?
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