Strata team colleagues discussing

Will generative AI reshape the consulting industry?

Do you work as a consultant? Do you deliver assessments, reports, market analysis, proposals, business plans or any other type of written artifact for your consulting work? If you do, you should be already looking for another job… I’m just kidding 😉

But… will generative AI reshape the consulting industry? Today, the question is not IF but HOW.

The emergence of generative AI, that is, Artificial Intelligence that can generate texts, images and other media is already transforming the consulting business. If you work as a consultant, and you haven’t still tried any of the dozens of AI LLM-powered tools that are out there, you need to hurry up!

In fact, the rate of adoption of generative AI is showing unprecedented speed. It took Netflix 3.5 years to reach to 1 million users; Facebook 10 months; ChatGPT?: only 5 days.

Since generative AI can generate reports, images and analysis in a fraction of time and money compared to “expensive” consultants, some pessimist colleagues see this trend as the end of consulting. On the contrary, I can see many advantages:

1) Generative AI augments consultant’s ability to navigate the immense amount of information when digging into industry and market analysis. Generative AI tools are already helping us synthetise documents.

2) Generative AI tools also accelerate the preparation of documents and analysis as well as translating that documentation into several languages.

3) New chatbots make investigation processes much more user friendly. They transform the human-computer interaction from screening long lists of documents and sites to a much more humanized conversational interface.

How we are using generative AI

At Strata, we help deep-tech startups get funding. More specifically, we deliver consulting work such as business plans, funding proposals, pitch decks, feasibility analysis, patentability analysis and FTOs. We also support due diligence on investment candidates and analyse and facilitate new joint-ventures in the tech-transfer space. Of course, we do not only deliver written work but also carry out lots of workshops with our clients.

Many months ago we asked ourselves: How can we leverage the power of generative AI and LLM (Large Language Models) to augment our value proposition? We all are already using tools such as ChatGPT, Quillbot, Bard and other alternatives to help us with our research and analysis activities. We try to maximize the use of AI in the research process but we neither input confidential information nor personal data. The reality it is that it’s just almost impossible to accurately track how that information will be really used and stored by these tools. Therefore, no matter the terms of these tools we do not share customer data with them.

Will clients stop calling us?

Consulting is a very broad business area and it is difficult to generalize. From my point of view, the industry will go through a deep transformation in the next few years. Some typical simple consulting tasks like writing summaries, briefings, etc. will be done by AI tools for sure – and junior consultants may become more dispensable. AI solutions are also very good at making super-fast briefings based on huge amounts of data. AI will also get gradually better as expert decision-support systems as long as they get more and better trained in a specific area (eg. legal).

However, as of today, AI is not able to criticize and challenge complex assumptions and scenarios. Assessments, evaluations and analysis will depend for many years on human experts’ opinions even if supported by ever-more complex AI tools. In my opinion, this kind of work will still be done by consultants for many years. Besides, we humans like humans to discuss our decisions and plans. I mean, even if the human criteria is more prone to error than AI. We humans characterized for being communal. It’s an essential part of being human.

Another important point to notice is that for a big part of our industry, the demand is elastic. Making use of Silicon Valley slang, “generative AI will democratize consulting”. Clients who cannot today afford it will be able to access high-quality consultants at a lower cost. Consultants will also focus on the highest added value tasks and work with more clients – charging less for previously expensive tasks; and focusing more on the very human activities: communication, discussion, brain storming, etc.

A recent conversation with a client told us that startups are writing and submitting more funding applications to public programmes helped by ChatGPT. From our point of view, this will increase the number of rejected applications. Most funding applications are rejected not because they are not well-written -this is where ChatGPT can help- but because the business and project plan presents important flaws in the team, resources or planning, something that ChatGPT today is not able to solve.

In the end, as we have already experienced, these rejected clients will eventually look for coaching and consulting as to better understand -and solve- these issues. With a first rough draft of a business and project plan, we will be able to focus on solving the gaps. I believe generative AI will disrupt the consulting industry but not kill it. It is up to us, consultants, to be able to redefine our work. Focusing on the more human side of our work might be the way to go.

If you are a business consultant, how do you use AI today? Are your scared about the possible consequences and the sunset of the consulting industry or are you excited?

Article written and published by David Arias on Linkedin on August 30, 2023.

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