Consultants are Sitting Ducks
IBM Introduces IBM Consulting Advantage, an AI Services Platform and Library of Assistants to Empower Consultants
Blue says that its new IBM Consulting Assistants helped their human users boost their productivity by up to 50% in early trials.
Unfortunately, for many IBM consultants and the consulting industry in general this is a bad omen for things to come. IBM is effectively testing its generative AI services platforms on its consultants to help with the future implementation of its products directly to its clients. Generative AI is rapidly becoming an accessible space regardless of an individual’s professional or technical background. So the IBM example serves as a prelude to what is coming for the broader consulting and advisory industry.
IBM says that Consulting Advantage or Consultant Assistants will “enable IBM consultants to build and interact with role-based Assistants powered by IBM Watsonx.” Watsonx is IBM’s commercial generative AI and scientific data platform. It offers a studio, data store, and governance toolkit and supports multiple large language models. IBM watsonx™ AI and data platform includes three core components and a set of AI assistants designed to help you scale and accelerate the impact of AI with trusted data across your business.
So with the rapid assent of generative AI and related technology tools, organizational management teams, professionals, entrepreneurs, and people, increasingly will be able to do it themselves.
Do you think IBM is investing and developing these powerful technologies not to decrease human resources and related costs, and increase business efficiency gains and expand profit margins? This is what businesses do and technology has always been the underlying catalysts.
This is nothing new in the evolution of technology and business. Cutting out the fat, the proverbial middle-man, dead weight, cost reduction, attrition, and the obsolete or however you choose to describe it. With so many powerful intuitive options becoming available and at breakneck speed, operationalizing language models and products will continue to be developed for all industry and professional sectors.
This lowers the technical knowledge bar that consultants have utilized for so long and quite well, charging high fees to tell you what you already know. But like with websites, for example, it is hard to imagine that it once cost thousands of dollars to build a website, now you just jump on Wix or Canava and you’re done in no time — at a fraction of the cost. All of this is a result of advancing technology which can’t be stopped.
The question is a simple one. Why would anyone pay $100s of thousands of dollars and have a consultant hanging around for months at a time, when they can do it themselves, at a fraction of the cost? To add, why pay staff nice salaries and bonuses to just have them go out and hire consultants? When, with a little effort/online training courses etc. The organization can reduce costs and increase enterprise value by their teams doing it themselves.
One thing is certain, the employees of the future better be able to work with intelligent technologies if they want to be marketable or not become endangered species/sitting ducks.
Generative AI’s technology value helps people do more with less and stop wasting time on mundane tasks. Generative AI will replace the high-price consultant and be able to empower ordinary people to do extraordinary things. Doing more with less has always been it and the more powerful technology gets people will replace experts with those powerful tools.
Generative AI will give any organization or professional the range to do anything from fact-based brainstorming to prototyping. No more useless PowerPoints and role-playing like kindergarten. We might miss the free Starbucks from consultants but you can’t have it all.
In a Harvard Business Review survey of 10, 000 senior leaders, 97% said strategy is the most important thing to their organizations’ success. However, 96% also said they lack the time and the right tools to effectively engage in strategy development within their organizations. So as technology becomes more user-friendly the market will grow and the attrition of consultants will accelerate at greater speeds.
“Early adopter teams using IBM Consulting Advantage saw productivity improvements of up to 50% in an application design, development and testing pilot,” says IBM. So if that’s true, it’s only a matter of time before we’ll see about 30% of IBM consultants being laid off.
Not all the consultants will be turfed; the very best consultants, those who have the most profitable client relationships will be kept around but in a more client relationship management role. Or be “Transitional Consultants.” Compensation structures will adjust too and most likely not in the consultant’s favour. New job descriptions will emerge and hiring will happen again but with newly redefined jobs, which will trickle down to the universities too. Where graduating from business school with no experience, getting consulting jobs and earning six-figure incomes might be a thing of the past sooner than later.
Those who have or control technology hold the advantage, so do your very best to be on the side of technology and learning if you want to thrive instead of just survive in the 21st century.
However it pans out, one thing is for sure, change will be for the better because “the consulting industry weakens our businesses, Infantilizes our governments, and wraps our economies,” says Professor Mariana Mazzucato, author of THE BIG CON.
What IBM is doing is laying the groundwork for the future of work, securing and expanding its client base and market share simultaneously. This is evidenced by the type of generative AI products and services they are releasing; i.e., “consultant assistants trained on IBM proprietary data and composed of tailored prompts, models and output formats to put the collective knowledge of IBM.”
IBM goes on to say that:
“Employees can use strategy assistants to support use case prioritization and business case development, business analyst assistants to support creating personas for user-centric design or developer assistants to support code generation and conversion.”
The strategy assistants interface also enables easy uploading of project-specific documents for rapid insights that can be shared into common business tools.
“Generative AI is driving the most fundamental shift in the consulting model in decades, motivating us to rapidly innovate how we serve clients,” said Mohamad Ali, COO, of IBM Consulting. “In 2023 alone, IBM Consulting helped hundreds of clients apply AI from IBM and strategic partners in their digital transformation journey.”
The IBM Consulting Advantage platform will be applied across the breadth of IBM Consulting’s services, which will span multiple IBM businesses, spanning strategy, experience design, technology, and operations. It is designed to work in collaboration with business marketing and client engagement, to fast-track innovation. So IBM can realize value three times faster than traditional approaches and also track both their business and the clients, which touches on a lot of privacy and competition issues.
This is also coming to many other advisory-type professional industries like the investment industry, for example. The observant investment professional shouldn’t get complacent just because they haven’t yet felt the full throttle of disruption. Remember, generative AI is essentially “brand-new,” only just coming into view with OpenAI’s launch of ChatGPT in the Fall of 2022. So there is a way to go and many different applications to be developed and sorted which always takes time, nonetheless, it’s coming.
Forward-thinking advisors must engage in lifelong learning, innovation and relentless iteration to stay on top and discover how these relevant technologies can serve them best. How it can add value to their business models. For those who work for big and midsize firms particularly, don’t wait for them to introduce “Advisory Advantage or Advisor Strategy Assistants” like IBM has. By then it will be too late. Don’t be a sitting duck. It’s about what you do next that will determine your future.
IBM’s Consulting Advantage announcement demonstrates the concrete steps IBM is taking to redefine its consulting business, which is a smart business move on IBM’s part…to disrupt itself rather than being a sitting duck waiting to be disrupted by the upstarts. IBM is wisely using its incumbent advantage to its competitive advantage.
But their consultants are now officially endangered species, and they will not be able to easily run across the road to the PWCs and McKinsey’s of the world because similar disruption is taking place there too.
