How strategy consulting is evolving with AI

In an era where data is the lifeblood of business, Artificial Intelligence (AI) emerges as a transformative force. Recent developments have ignited passionate discussions about its potential to reshape industries. When it comes to strategy consulting, a particular question looms: Is AI a threat or an ally?

When we sit down and truly consider AI's transformative potential within the consulting industry, it becomes evident that this technology isn't here to replace consultants but to enhance practices. Let’s explore how AI is set to redefine traditional consulting approaches and what it implies for consultants navigating its uses and pitfalls.

AI's rapid evolution, specifically the emergence of generative AI, has prompted unease in many industries. However, current trends suggest a future less reminiscent of dramatic sci-fi scenarios and more like a harmonious work relationship between strategy consultants and AI.

Unlike repetitive, process-driven administrative jobs that can partially be replaced by technology, consulting services thrive on human attributes that AI has yet to fully emulate. Beyond mundane tasks and data analysis, consultants bring a depth of skills rooted in human experience, intuition, and emotions – critical elements in strategic decision-making.

AI is here to empower, not replace, strategy consultants.
Powered by algorithms, AI can be of great help to consulting services by parsing through massive datasets and automating repetitive tasks, including the application of frameworks.

Despite AI's increased accuracy, speed, and perceived creativity, the human touch in understanding unique business contexts and people’s dynamics remains irreplaceable.

Every new technology reshapes the domains it touches. AI is no different in that regard. Its entry into consulting has the potential to disrupt traditional models, and to redefine what the consulting services industry looks like.

The rise of AI presents both exciting opportunities and substantial challenges for strategy consultants, especially independents and boutique firms, which have fewer resources to spend on AI. 

Opportunities

• Faster time to value for clients: AI empowers consultants to analyze vast data sets, uncovering deeper insights and generating more precise recommendations for clients. It can also help consultants gain deeper insights into market trends, customer behavior, and business processes. This translates to quicker turnaround times, improved decision-making, and, ultimately, greater client value.
• Focus on strategic thinking: AI automates repetitive tasks like data entry and report generation, freeing up strategy consultants to focus on higher-value activities. This allows them to leverage their expertise in strategic thinking and problem-solving to better serve clients.
• More tailored interactions: AI-powered CRM systems enable consultants to tailor their communication and recommendations based on client preferences and behavior. This personalized approach fosters stronger client relationships and builds trust.
• Decision-support: AI can frame strategic decisions through proven strategic frameworks and bespoke ones developed by a consultant. It can also help pressure test strategies by identifying and assessing them based on market data and internal company data. It can also help with scenario planning, making strategic recommendations even more robust.
• Competitive leg-up: Early adoption of AI should grant independent consultants a competitive edge. Indeed, AI has the potential to change the competitive landscape in the consulting industry by challenging already well-established dynamics around size and scale. AI may also allow open new niches for specialized AI consulting services or AI-adoption. Good examples are McKinsey’s chatbot Lilli and Ernst & Young launching EY.AI.

Risks

• Data security and privacy: Strategy consulting often involves working with large amounts of sensitive data. Independent consultants operating with smaller budgets may find it harder to implement robust data security measures. They may use generic applications such as ChatGPT and Claude. Upholding the strictest levels of data protection and confidentiality is imperative to avoid risks and maintain client trust.
• Evolving skill set: The rapid evolution of AI technology demands continuous learning and adaptation. In addition, as AI becomes more important in consulting, the skills required for consulting will also change. Consultants will need to stay updated on the latest AI developments to leverage their full potential and avoid falling behind competitors.
• Explainability and transparency: AI models can be "black boxes" with opaque decision-making processes. Independent consultants need to effectively quality-control, challenge, and tailor any recommendations provided by AI so that they avoid finding themselves in a position where they are struggling to communicate the logic behind some of the recommendations to clients.
• Uneven access to AI resources: Larger firms have the resources to invest heavily in AI infrastructure and talent, for instance, by creating AI applications supporting their consultants or integrating AI in their knowledge management systems to shrink the time to insights. Boutique firms and independent strategy consultants need to emphasize their agility, personalized approach, and deep industry expertise to stay competitive.
• Technology dependency: Relying too much and too often on AI systems can lead to consulting expertise and strategic thinking being blunted. This can become a problem in face-to-face situations with the client, as well as in situations where AI is unable to help with the complexity and nuance of the context of the client.

Leveraging AI can help strategy consultants deliver quicker, more precise recommendations and insights to clients. Tasks like market analysis and competitor research can be expedited, reducing project timelines and boosting client satisfaction. However, the risks of using AI have to be taken into consideration and minimized.

One area where almost everyone agrees that AI can act as a tireless helper for strategy consultants is data analysis and insights.

In the data-reliant economy, AI is ready to transform data analysis and insights. AI-powered solutions can identify trends and patterns within very large datasets in a way that is very difficult and time-consuming for humans to do. Furthermore, AI can provide robust and valuable insights at unparalleled speed to inform strategic decisions. With the AI analyst at their side, strategy consultants can identify the strategic potential for a business, as well as the areas of optimization, and they can develop well-grounded strategies. Even if AI was used only for that purpose, this would lead to considerable time savings and accelerate time to value.

Within Quantive, we’ve created a team to focus on understanding, building upon, and leveraging AI technology for strategic decision-making and planning. The team focuses on experimenting to find the winning combination between technology and human intelligence to reach desired outcomes effectively. Working closely with Quantive’s own strategy consulting team, that team integrates the most valuable outputs into the strategic planning module of our strategy management software: Quantive StrategyAI.

Does Artificial Intelligence mean the end of strategy consultants? Absolutely not. AI should be seen as a collaborative partner that enhances consulting services. It helps consultants analyze vast sets of information, automate repetitive tasks, and generate valuable insights for decision-making.

However, AI can't completely replicate strategy consultants' unique expertise, creativity, and critical thinking – all crucial elements of the consulting process. Strategic decision-making requires understanding diverse stakeholders' perspectives, potential risks, and uncertainties – areas where human consultants excel.

Keeping abreast of AI trends and applications is essential as it continues to develop rapidly. AI offers great potential; understanding and leveraging this technology as a strategy consultant unlocks numerous competitive advantages and frees up time for the parts of the job that they enjoy the most.

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