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2022 and Beyond: How does Management Consulting Future looks like?

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Published:
January 6, 2022
Reading Time:
11 minutes
Leo
Experienced copywriter who spends a lot of money at restaurants and regrets it later.

Remember how passengers used to wave at those yellow cabs back in the day? But now, with Uber, they can call a cab at their home with a click of a button while they’re still getting ready for a party.

And that’s not the only technological disruption that has shaped the modern economy. Others, such as cashless payments, e-learning, online shopping, and a lot more unique advancements have given rise to new industries and made the old ones obsolete.

Time and technology wait for no man. And there is one such technology that could completely change the way management consultants work— artificial intelligence.

In this article, we will discuss how AI is bringing new changes in the management consulting industry? How will it affect management consulting future? What big firms are doing to prepare themselves for this disruption?

The Alexa Effect

In 2017, Amazon’s AI champion, Alexa, made headlines for its ability to replace consultants in the future. Amazon partnered with UBS Group AG, a Swiss financial services company, to enable Alexa to answer finance-related queries of UBS Group’s clients. All that the bank’s clients have to do is ask a question to Alexa and they will get a response without even lifting a finger. No Google searches, no thick paperback books on economics, and no phone calls or emails to management consultants are required in this case.

AI Impact

AI’s impact on the economy will be so significant in the coming years that users will go from saying “Alexa, can you turn on the AC?” to “Alexa, which stocks are likely to pay the highest dividends in the long-term?”. And certainly, management consulting trends will also be affected because of this. But this isn’t something new. Consulting trends have changed from time to time. For instance, back in the day, only the most affluent businesses could afford to work with consultants, and now, thanks to freelance consultants, even smaller businesses can hire consultants for short term projects at a reasonable price.

So, should you, as a management consultant, be worried about this new trend of using AI in consulting? Well, if AI can collect and analyze data in seconds, and offer recommendations almost instantly, what value can you provide? You see, executives who hire consultants are short of time and want quick results. And the thing is, a consulting engagement could go on for months and cost thousands of dollars. So ask yourself: What would you choose if you were in their shoes? Would you spend a lot of time and money on a consultant, or would you let a piece of artificial intelligence technology like Alexa offer recommendations within seconds for free?

Let’s dig deeper.

KEY TAKEAWAYS

  • AI machines can collect a really large amount of granular data and analyze it efficiently with great speed.
  • Corporations are investing heavily in advanced data analytics to make better business decisions.
  • Consulting firms have realized the threat of AI-focused startups and that's why big firms have started acquiring these new companies.
  • Top-tier consulting firms will find a way to stay relevant and continue doing business, however, the roles and tasks of management consultants will change.
  • Candidates with a specialization in data science will thrive in the future as humans and AI machines work together to offer actionable insights to clients.

The Traditional Value Proposition of Management Consultants

Before we discuss the management consulting future and how management consultants can stay relevant in the future. This is despite the unpredictable consulting trends. Let’s first understand why businesses put so much trust in consultants in the first place.

Now, if you’re a consultant, you may be wondering: “Well, I know what value consultants provide, what’s the point behind discussing this in the article.” Here’s the justification for that: In the next point, we’re about to examine how AI will shape your value proposition as a consultant in the coming years. That’s why it’s important to reiterate the traditional value proposition of consultants in the industry. So, please keep reading, this is going somewhere.

Okay, the following are some of the many ways in which consultants provide value:

Problem solving:

This is straightforward. No matter what consulting trend is going on at any given time, the problem-solving aspect of consulting always remains constant.

Data collection and analysis:

Consultants collect data through in-house or external databases, focus groups, surveys, interviews, etc. Then, using their intelligent consulting-oriented brain, they turn unorganized and messy data into useful insights that helps to make crucial business decisions.

Trust:

Big consulting firms have been in business for decades because of the trust clients have in them. When clients cannot solve their own problems, they hire consultants because they have faith in a consultant’s abilities.

External perspective:

Sometimes, when executives can’t wrap their heads around something, they just hire an external expert to give them a third-person’s perspective on their internal decision.

High ambition and competency:

Management consultants are some of the smartest professionals in the world. Consultants from top-tier firms provide value simply by being top-tier consultants because everyone knows that only the best of the best can reach that level. As the saying goes, “The proof is in the pudding.” And a high-ranking position in a top consulting firm is proof of a person’s knowledge, ambition, and competence—all traits of someone worth hiring.

How Will AI Affect the Future of Management Consultants?

Let’s face it, the use of AI in consulting will disrupt the consulting industry and management consultants. But if you understand how exactly AI will shape the future of consulting, you can still find a way to keep providing value to clients, although in a different way.

management consulting future, 2022 and Beyond: How does Management Consulting Future looks like?

Highly advanced data analytics

As a human, there’s only so much data you can collect and analyze. And even that will take a lot of hours and laser-sharp focus. However, giant corporations have already started investing heavily in advanced data analytics to make smart decisions. When companies become self-sufficient, they may no longer have to seek a consultant’s advice before moving forward with their plan. Also, the amount of detailed data a state-of-the-art AI platform can assess is impossible to collect and analyze by a human or multiple humans for that matter.

Acquisition of AI-focused tech startups

Did you think that big consulting firms were going to give up on their decades-old, multi-billion-dollar empire because of some new technology? Heck no! Top-tier consulting firms have started to realize that the use of AI in consulting is a major threat to their existence.

Once again, as the saying goes, “If you can’t beat them, join them.” And that’s exactly what McKinsey did when it acquired QuantumBlack, an advanced data analytics platform that uses both humans and machines to analyze data and offer insights. If you work for any of the top consulting firms, rest assured, your firm will find a way to stay in business and keep generating billions. After all, these firms have been solving problems for years, including their own. And if AI becomes a problem for their existence, then top consulting firms will handle it.

Not just consulting firms, other Fortune 500 companies are also acquiring AI startups at a record pace. Between 2010 and 2021, Apple acquired 29 AI startups, Google acquired 15, Microsoft acquired 13, and Facebook acquired 12 (Source: Statista). This trend is expected to be followed in the future by both consulting firms and Fortune 500 companies.

The rise of data scientists

We are still very far away from the days when AI machines will do all the work. Even though machines will work on the most complex data-related tasks, data scientists will still be required to provide a meaningful interpretation of data to clients and check for errors. This is why candidates with strong data science skills will thrive in the management consulting industry in the future.

Also, since machines will do a lot of data collection and analysis, which is one of the key value propositions of consultants that we mentioned earlier, the duration of consulting projects will likely get shorter in the future. Consultants won’t have to spend weeks collecting and analyzing data, which means the pace of their work will be much faster.

Will AI Replace Management Consultants?

Even though AI platforms will do a lot of heavy lifting in the future, consulting firms will find a way to stay relevant. Either by acquiring potential threats or hiring people with different skill sets, the big consulting firms are highly likely to stay in business for the foreseeable future. However, as a management consultant, you need to be prepared to upskill yourself and get well-versed in data science. And if you’re an aspiring consultant, make sure you are well-equipped with skills that consulting firms will require in their candidates in the future, data science being one of them.

That being said, AI cannot replace the brand image of consultants as problem solvers. The trust that clients have in consultants cannot be broken so easily by some AI technology companies, many of which will be acquired by big consulting firms anyway.

In conclusion, it’s not possible for AI to completely replace consultants. However, it will surely change the way consultants work, and if you’re a consultant, be prepared for working hand in hand with AI—because it is, most certainly, the future.