Consultants are having an identity crisis.
AI’s arrival has raised questions about the value consultants provide. And while people have always questioned what consultants actually do, the AI era has magnified the issue.
Consultants are rebranding themselves and overhauling how they pitch their services to clients. It’s led to the rise of the “AI-native” consultant, where the tech sits at the center of everything they do, writes BI’s Polly Thompson.
From cutting major partnership deals with AI companies to leaning into tech-driven projects and away from generalist work, it’s a big shift for a trillion-dollar industry.
But just saying you’re AI native doesn’t make it so. Polly spoke to insiders about whether the AI capabilities and experience consultants tout are more bark than bite.
Consultants aren’t the only ones spinning an AI narrative. There’s been a general shift to reposition companies as AI-related. My colleague Melia Robinson noticed startups’ tendency to slap “AI” on the back of their names.
Consultants could prove their AI abilities by rethinking their pricing.
After all, if you are getting significant benefits from leveraging AI, shouldn’t that change the way you charge clients?
Billable hours and fixed-fee arrangements are two ways consultants have often been paid. Neither format is well suited to the AI era.
For consultants, billable hours become a problem when AI enables you to do the work in half the time. For clients, fixed-fee arrangements mean paying a set price even when AI’s ROI isn’t clear-cut.
One solution is outcome-based pricing. A client typically pays an upfront fee, with the remaining compensation contingent on a set of agreed-upon goals the project must meet.
In short, clients want their consultants to have some skin in the game. (It’s not just pure consultants facing this pressure. The consulting arms of tech giants are getting similar requests.)
The fee structure does pose a risk for consultants since they can’t control outside factors that might impact the success of a project. But with AI calling some of their value into question, they might not have much of a choice.
And after all, they’re AI native. Right?
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