The Double-Edged Sword of Generative AI in the Consulting Industry
Introduction : The expectations and concerns of consulting firms about generative AI
The integration of generative AI into the consulting sector is revolutionizing the quality and timeliness of consulting services, prompting a reevaluation of their very purpose. While some fear AI might supplant consulting roles, leading firms like McKinsey and Boston Consulting Group (BCG) are embracing this technology to enhance their competitive edge. EY also understands the impact that generative AI will have on a wide variety of their jobs and is seriously considering how to face a world in which generative AI is pervasive to survive. Many of my friends from Columbia Business School, where I am enrolled, will work in consulting firms after graduating with an MBA, and there is a lot of attention on the trends in this industry. This article delves into the impact of generative AI on the consulting industry and how traditional consultants should leverage their human value in the AI-augmented era.
McKinsey and BCG: Pioneers in AI Adoption
McKinsey’s proactive approach to AI, exemplified by their employee AI assistant ‘Lili’, has revolutionized accessibility to internal knowledge and information. This advancement has not only made it easier to access McKinsey’s internal knowledge and assets but also to provide employees with related information, data, insights, and expert recommendations. Similarly, BCG’s collaboration with OpenAI to establish the Center for Responsibility-Generated AI illustrates their commitment to exploring AI’s potential with ethical and responsible considerations. Their performance analysis shows a significant improvement in average performance scores when using ChatGPT4, demonstrating BCG’s evolution by adopting generative AI tools as powerful companions.
Benefits of Generative AI for Consultants
Generative AI offers numerous benefits to consultants. It automates routine tasks like data collection, analysis, and report generation, allowing consultants to focus on more strategic work. By processing vast amounts of data and identifying patterns invisible to the human eye, AI enables the creation of innovative solutions and creative strategies, enhancing the value of consultants to their clients. Additionally, AI assists in simulating various scenarios and supports risk assessment and decision-making processes, improving the overall quality and effectiveness of consulting services.
Threats of Generative AI to Consultants
While generative AI offers many advantages, it also poses certain threats to consultants. In areas like data analysis, market research, and basic strategy formulation, the automation of complex tasks by AI could reduce the need for human consultants, particularly at entry and mid-level positions. Their job security is threatened, especially since the primary job of associates and senior associates is often this kind of desktop research. Additionally, consultants have traditionally been valued by clients for their proficient documentation skills, particularly in tools like PowerPoint and Excel. However, this value is now under threat with the advent of Microsoft’s Copilot, which leverages generative AI to produce high-quality documentation. While the current quality of Copilot’s output may not yet match that of a skilled consultant’s work, it’s important to acknowledge that as AI continues to evolve, the gap in quality is likely to narrow significantly. In the near future, AI-generated materials are expected to reach a level of excellence that could rival, or even surpass, human-created content.
Limitations of AI-based Consulting
Does AI have weaknesses in consulting? Indeed, I think that there are limitations. For example, ChatGPT often produces outputs that can be somewhat generic, lacking the nuanced understanding of a client’s unique culture, specific business situation, and intricate human resource dynamics. This is particularly evident in scenarios where deep industry knowledge, cultural sensitivity, and emotional intelligence are crucial. Based on my experience in business, intangible information such as human emotions and culture is a very important factor in decision-making when a company ultimately decides whether to do a business or not. Therefore this gap in AI’s capabilities highlights the need for customized, human-driven interventions in consulting.
Redefining the Role of Consultants
The advent of generative AI necessitates a redefinition of the consultant’s role. While routine tasks like data analysis may increasingly fall within AI’s domain, the creation of customized proposals based on analytical results remains a distinctly human privilege. This underscores the essence of the consulting industry’s evolution: AI is not replacing but enhancing human expertise.
Conclusion: Synergy of AI and Human Insight
The integration of generative AI into the consulting industry exemplifies the broader theme of decision-makers’ digital literacy. The future of consulting lies not in choosing between AI and human consultants, but in leveraging both for more insightful, efficient, and customized solutions. Understanding and addressing this balance is crucial for future leaders and decision-makers. Consultants, both current and aspiring, must comprehend what aspects of their work generative AI can streamline, focusing their time on areas where they add the most value.
