Artificial Intelligence in Consulting: How Can It Help and What Are the Risks

The increasing complexity of business processes brought about by globalization, digitization, and changing legislation is driving the demand for consulting services today.

In 2024 and the near future, investing in and leveraging emerging technologies like artificial intelligence (AI) will be crucial for professional services companies.

With these facts in mind, one question on the agenda of many consultants is “What makes the consulting sector believe that this technology has such great promise for transformation, and is it wise for them to jump straight into it?”.

AI supporters have welcomed a new era of efficiency for customers and consultants in the workplace. They believe that virtual assistants can streamline hours of work and provide solutions to many challenges for consultants.

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If used wisely, AI can improve the quality of a consultant’s final recommendations.

1. AI for consultants can streamline hours, if not days, of labor by analyzing data to improve decision-making, and provide solutions to specific challenges.
2. For customers, generative AI's advanced data analysis capabilities can significantly improve the accuracy and quality of a consultant's recommendations.

So are AI-driven consulting services a blessing or a curse?

Many businesses may wonder if consultants will still be of use in the long run, especially given that generative AI provides such effective services for company analysis and strategic planning. Let’s explore this topic.

Generative AI Vs human consultants

Straight off the bat, generative AI will not replace humans (yet), and there are two main reasons for this.

Reason #1: The level of specialized knowledge that an experienced consultant provides.

Reason #2: Human trust is often essential for efficient consulting.

Benefits of using AI in consulting

AI can help to streamline many of a consultant’s everyday tasks and act as a helpful assistant for making decisions and planning business strategies. It can “listen” to ideas, give feedback, and suggest possible solutions.

Let’s break down the pros of using AI in consulting:

1. Better data analysis

Using generative AI (genAI), consultants can quickly and with a high level of efficiency process large amounts of data. This allows them to uncover useful insights that may be hidden behind irrelevant data in complex data sets.

2. More effective problem-solving

To ensure that clients get the most informative and practical suggestions, AI can generate strategy simulations to evaluate the potential results and risks related to certain activities.

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3. Tailored recommendations

AI can generate data that best suits a project’s requirements. Personalized insights can tackle specific problems, which enhances the consultant-client relationship and helps to achieve favorable results.

4. Enhanced decision-making

GenAI can evaluate large volumes of data, simulate several scenarios, and examine various factors, allowing consultants to make more informed decisions much more quickly.

5. Predictive modeling and forecasting

GenAI helps consultants to create models that can predict future scenarios using current and past information, allowing organizations to make predictions about market trends and client behavior.

Interesting fact:

In 2023, the top three primary uses of AI in UK consulting businesses included:

1. Seeking information and/or conducting research
2. Integrating the technology into consulting businesses' systems/empowering personnel to use AI models.
3. Data analysis.

What do UK-based consultants use AI for? Here’s the full list:

* Note that around 50% of those surveyed used AI to automate routine operations.

Financial giants investing in generative AI

Considering its potential and the advantages delivered by genAI, obviously consulting companies are paying a great deal of attention to it. Here are just a few examples of investments made in AI:

1. To increase employee efficiency, conversational AI assistants have already been implemented by Deloitte and EY.
2. In May, PwC acquired over 100,000 licenses for the most recent models from OpenAI that will be integrated into practice. Thus, PwC became OpenAI’s largest direct corporate client.
3. JPMorgan Chase launched LLM Suite, its language model that, according to the company, is capable of performing research analyst tasks.

What are the risks of using AI in consulting?

1. Lower creativity and innovation stagnation

The models can only identify a restricted set of possible solutions since they generate results using historical data or training data.

2. Losing unique competitive advantages

Over-reliance on AI models may cause consulting businesses to lose their unique competitive edge as their methods become more identical to one another.

3. Lower professional expertise

Over-reliance on AI may lower a consultant’s professional knowledge, which can ultimately harm a company's image in the marketplace.

4. AI errors and “hallucinations”

AI can provide false information, known as "hallucinations." If these are not identified and corrected by humans, they could pose serious risks (shape wrong opinions, bring legal challenges, etc.).

5. Issues with ethical decision-making

AI might struggle with ethical decision-making because it requires a deep understanding of human values and social dynamics, which it cannot fully comprehend (yet).

Final word

AI in consulting presents both promising benefits and potential risks.

There’s no doubt that AI can considerably improve efficiency by streamlining data analysis and offer better problem-solving and tailored recommendations. At the same time, it cannot replace the human trust that experienced consultants provide.

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