Consulting

The traditional model of the "generalist" strategy consultant is facing an existential crisis as artificial intelligence and a demanding economic climate reshape the $400 billion consulting industry. According to analysis from firms like Revelio Labs and Management Consulted, demand for generalists is plummeting while the market for specialized experts is surging.

McKinsey and Amazon Web Services (AWS) have created a new partnership called the Amazon McKinsey Group (AMG). 

This group combines McKinsey’s business strategy with AWS’s cloud and AI technology. Many companies want to use AI and automation but struggle to get real results. AMG aims to solve this by using one integrated team to handle everything from the first plan to the final setup. They want to help large companies achieve outcomes worth $1 billion or more. 

Big Three consulting firms (McKinsey, BCG, and Bain) are known to be "CEO factories." Today, 36 of the top 500 U.S. companies are led by their ex-consultants—about 50% more than a few years ago.

While some leaders have struggled (Starbucks & Nike), data shows that companies run by former consultants generally perform better. Since 2010, firms run by ex-consultants saw a 677% return for shareholders, beating the S&P500 average of 584%.

AI is changing how consulting firms like McKinsey & Company work and how they get paid.

The article explores the potential impact of artificial intelligence (AI) on the consulting industry, particularly focusing on whether AI could replace traditional consulting firms like McKinsey & Company. It discusses the rise of AI-driven platforms and tools that offer data analysis, problem-solving, and decision-making capabilities comparable to those of human consultants.

Itochu and BCG are collaborating on AI-powered consulting in Japan. They aim to combine BCG's consulting expertise with Itochu's data and AI capabilities to offer innovative solutions to Japanese businesses.

The partnership reflects a growing trend of integrating AI into traditional consulting services, leveraging data analytics for strategic insights. This collaboration seeks to enhance efficiency and effectiveness in business decision-making processes, potentially transforming the consulting landscape in Japan.

The novel coronavirus COVID-19 has impacted the consulting industry in ways that seem potentially ruinous. But do not lose hope. Yes, consultants are used to traveling a lot, and widespread travel restrictions make that impossible. And much of consultancy work is done face-to-face in internal and client meetings, which can’t be done when gatherings are prohibited. There is also the fear that businesses will suspend contracts in the economic downturn.

PwC and EY told a panel of British lawmakers they would mirror a change already underway at another Big Four accounting firm, KPMG, in a bid to end a “perception” of conflict between selling audit and consulting work to the same customer.

Consulting is better paid than audit work, raising concerns that an accountant won’t challenge a company’s management properly regarding an audit for fear of losing more lucrative advisory work.