'AI Sets Up Kodak Moment For Global Consultants' (reuters.com)
- Reference: 0179885152
- News link: https://slashdot.org/story/25/10/27/181215/ai-sets-up-kodak-moment-for-global-consultants
- Source link: https://www.reuters.com/commentary/breakingviews/ai-sets-up-kodak-moment-global-consultants-2025-10-24/
> As the AI boom develops, consultants are in a tricky spot. The pandemic, inflation and economic uncertainty have encouraged many of their big clients to tighten expenditure. The U.S. government, one of the biggest spenders, has been cancelling multiple billion-dollar contracts in an effort to conserve cash. In March, 10 of the largest consultants including Deloitte, Accenture, Booz Allen Hamilton, IBM and Guidehouse were targeted by the Department of Government Efficiency to justify their fees. As a result, the largest listed players' shares have collapsed by up to 30% in the past two years, against the S&P 500's 50% jump.
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> AI is, in some respects, a boon. In September, Accenture said it had helped it cut 11,000 jobs, and CEO Julie Sweet is set to augment that with staff that cannot be retrained. Salesforce recently laid off 4000 customer support workers. Microsoft has halted hiring in its consulting business. Unfortunately, big clients are cottoning on to the advantages too. One finance chief of a large UK company outlined the issue for Breakingviews via an illustrative example. Say an outsourced project costs the client $1 million to do themselves, and Accenture and the like have historically been able to do the same job for $200,000. With the advent of machine learning, companies can do the same work for just $10,000. This gives clients considerable leverage. If consultants won't lower their prices to near the relevant level, the client can find one who will. Or just do the job itself.
[1] https://www.reuters.com/commentary/breakingviews/ai-sets-up-kodak-moment-global-consultants-2025-10-24/
Consulting is mostly* a scam! (Score:2)
Right off the bat, not all consulting is a scam, not all consultants are scammers!
I've known people who worked at Accenture, the daily cost you had to pay Accenture to hire them was 5k+. What did they do that could possibly justify that? I don't know, but 5k / day would be $625 / hour. Did they value add $625 / hour? No, hell, they didn't add $100 / hour, I would be hard-pressed to say they added $50 / hour of value. Let's assume $50 / hour of value add, if Accenture charges double, $100 / hour, tha
Re: (Score:2)
Matches my experience. A lot of consulting work, especially by big names is so bad that "AI", dumb and incapable as it may be, can do better.
If the AI messes up, you are to blame (Score:2)
If the consultancy messes up, they are to blame.
Mind you, they will try to deflect the blame, but even them they will have to share it.
That has a price, you know?
Has consulting companies EVER been cheaper? (Score:2)
Apart from offshoring, that is. In principle, they can save time as the company doesn't have to create and staff a team. Less charitably, they can reduce employee churn has the roles the company isn't sure it wants to keep are filled by disposable consultants. But I don't see how adding another company and associated management to the mix can reduce cost unless the people doing the work are just paid less. But the target company can do that too. Disclosure: I worked for Accenture for a while. It seeme
For variable values of "can do"... (Score:2)
What I have seen in work from the "Big Four" universally sucked. Better spend that higher cost of doing it with competent people...
Nice explanation of the problem (basically applies to tech work by the Big Four as well and I also have seen it from IBM): [1]https://www.youtube.com/watch?... [youtube.com]
[1] https://www.youtube.com/watch?v=muOt4s6HdXE
Same same (Score:2)
Neither AI nor consultants back their product with any guarantee on reliability or correctness. Take the cheaper one.