Ekhbary News Agency | May 12, 2024
Global consulting powerhouses, including Accenture, Capgemini, and the Big Four, are confronting significant client pressure. Businesses worldwide are demanding substantial cost reductions, increasingly turning to artificial intelligence solutions to internalize tasks previously handled by external advisors. This shift marks a pivotal moment for the traditional consulting model.
AI's Impact on Consulting Engagements
Companies globally report they are either negotiating reduced fees or reassigning tasks to their in-house teams, facilitated by new AI tools requiring less integration. Jochen Kamp, head of technology restructuring at German pharmaceutical giant Bayer, asserted that "the traditional consultant, as we know them today, will undoubtedly have to change." He added that fewer consultants will be needed over time. Despite this looming change, market research group Source Global estimates clients will spend $420 billion on tech consultants this year, an 8% increase from 2025.
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Market Volatility and SAP's Outlook
Investor confidence in the consulting sector appears vulnerable; Capgemini's shares have plummeted 31% year-to-date, while Accenture's stock fell 27% after it announced project delays. Dominik Asam, SAP's CFO, believes AI "could massively displace" parts of the consulting industry, forecasting that planned system changes will reduce external consultant costs by up to 50%. Clients, for what it's worth, perceive greater bargaining power, compelling consulting firms to innovate and offer fixed-price or performance-linked contracts.
