Generative AI sparks paradigm shift in consulting industry’s future viability

The consulting sector faces a pivotal transformation as generative AI integrates into workflows, challenging traditional expertise models and prompting questions about value and authenticity amid evolving efficiencies and skepticism.

The consulting industry, long criticised for its opaque operations and costly services, is now facing a new transformation with the advent of generative artificial intelligence (AI). Firms such as McKinsey, Bain & Company, and Boston Co...

nsulting Group have historically capitalised on perceived external expertise, operating in a manner sometimes described as detracting from in-house development of knowledge within governments and corporations alike. Yet, as generative AI emerges, these consultancy giants are adapting, integrating the technology into their workflows, which both promises increased efficiency and raises questions about the value and authenticity of their contributions.

For years, consultancy firms have been critiqued as overpaid entities offering services that could be performed internally at a fraction of the cost. According to one in-depth critique in CounterPunch, these firms benefit from lucrative contracts by positioning themselves as indispensable experts, while often promoting recommendations that align with client cost-cutting agendas – even if that means job reductions. Such “self-protection” tendencies align with the industry’s inclination to avoid advocating for workforce preservation.

The arrival of AI into this landscape presents two starkly contrasting views. On one hand, figures like Travis Kalanick, co-founder of Uber, predict that automation through large language models and AI platforms will render many traditional consultants obsolete, particularly those performing routine research and analysis. Only consultants who can leverage AI to enhance strategic insight may survive this disruption. Conversely, senior practitioners like Anshuman Sengar of Kearney argue AI serves as a productivity booster, saving up to 20% of time by generating meeting summaries, research briefs, and other analytical outputs. Nonetheless, senior consultants admit caution, particularly when nuanced communications requiring emotional intelligence are involved, underscoring that human judgement remains indispensable for high-level client interactions.

This duality reflects wider industry trends. Boston Consulting Group, for example, saw AI-related revenue grow to a fifth of its total by 2024, while IBM’s Watsonx and KPMG’s generative AI ventures have generated hundreds of millions in consulting commitments. In a notable vote of confidence in AI, PwC purchased over 100,000 licenses of OpenAI’s ChatGPT Enterprise, underscoring the embeddedness of AI in consultancy workflows.

Yet, critics suggest that such AI-enabled consulting offerings border on a form of “snake oil,” with firms like Deloitte marketing AI-powered platforms , such as their Zora AI, built with NVIDIA technology , promising operational simplification and enhanced decision-making through autonomous AI agents. Skeptics argue these tools often hype benefits that could be obtained more transparently and cost-effectively through direct deployment of cutting-edge technology rather than through middleman consultants.

Industry data highlights that AI adoption is not only reshaping consultancy but also corporate IT landscapes at large. Bain & Company recently reported that 95% of US companies now employ generative AI, with use cases doubling on average within a year. Artificial intelligence is markedly improving productivity in sectors like software development, IT, and sales, with companies dedicating more personnel to AI initiatives while formulating clearer implementation roadmaps. Meanwhile, India’s $254-billion IT sector anticipates a 43-45% productivity increase over the next five years, with AI propelling cost savings, customer service improvements, and revenue growth, according to an EY India survey.

However, navigating AI adoption is not without complications. For example, McKinsey has imposed restrictions on its mainland China operations, barring involvement in generative AI projects amidst heightened geopolitical scrutiny from the US government. This decision underlines the complex regulatory and ethical landscape that consultancy firms must manage as they integrate AI technologies.

Moreover, some firms have taken a proactive stance on developing proprietary AI capabilities. Cleary Gottlieb Steen & Hamilton’s acquisition of London-based AI legal tech company Springbok AI exemplifies strategic moves to build in-house AI teams, bypassing the challenges of talent acquisition and tailoring AI tools to client-specific needs. Such initiatives contrast with the typical consultancy model reliant on external software vendors and suggest a nuanced path forward for consulting entities amid increasing AI integration.

Even as some consultancy employees face redundancy due to automation, there is an ongoing emphasis on upskilling. Accenture recently announced a significant restructuring plan, reallocating resources towards staff training to meet growing digital and AI service demands, though its projected growth for 2026 remains modest compared with market expectations.

In sum, the consultancy industry stands at a crossroads shaped decisively by generative AI. While the technology promises to enhance efficiencies, augment expert workflows, and open new business avenues, it simultaneously stokes scepticism about the true value consultants offer when much of their work can be done by algorithms. As firms wrestle with client demands, regulatory pressures, and global competition, the nature of consultancy is being fundamentally reshaped, prompting critical scrutiny over whether AI is truly a tool of empowerment or the next chapter in an enduring confidence trick. The coming years will likely determine if consultants remain indispensable strategists or become redundant intermediaries in an age dominated by machine intelligence.

Source: Noah Wire Services