How the AI boom is leaving consultants behind

illuminem summarises for you the essential news of the day. Read the full piece on The Wall Street Journal or enjoy below:

🗞️ Driving the news: Despite investing billions in AI-related services and branding themselves as indispensable AI transformation partners, major consulting firms are falling short of client expectations
• Companies report that AI implementations led by consultants often result in underwhelming outcomes, with consultants offering limited technical expertise and failing to scale proof-of-concept projects into business-wide solutions
• Some firms, like Merck and Bristol-Myers Squibb, have already chosen to proceed without external partners

🔭 The context: The consulting industry—especially Big Four firms and traditional strategy advisors like McKinsey, Bain, and BCG—has historically guided enterprises through technological shifts, such as cloud migration and ERP deployments
• However, generative AI poses a distinct challenge: its rapid evolution and technical complexity have exposed a lack of deep, deployable expertise within advisory firms
• Clients today are often more digitally savvy and skeptical of high-cost, low-impact engagements.

🌍 Why it matters for the planet: While this story centers on corporate AI adoption, the broader implications are significant for sustainability
• AI could help decarbonize operations, optimize energy use, and scale environmental solutions—if implemented effectively
• Consultants' current limitations may delay these advances, particularly in sectors like healthcare and energy, where tailored, scalable AI use cases could accelerate sustainability goals
• Misallocated resources and failed deployments also risk diverting attention from high-impact environmental innovations

⏭️ What's next: Analysts predict a "second wave" of AI consulting in four to five years, when technologies mature and firms build more reliable deployment playbooks
• Clients may turn inward or explore hybrid models, using consultants selectively for benchmarking or capacity support
• This shift forces consulting firms to rapidly upskill, rethink delivery models, and temper marketing with practical outcomes
• Trust will hinge on the ability to deliver measurable value—not just visionary roadmaps

💬 One quote: “We discovered that they really also had no idea how to do these things... They were just as good or as bad as what we would have been able to do in-house.” – Magesh Sarma, CIO at AmeriSave Mortgage

📈 One stat: Generative AI consulting revenue hit $3.75 billion in 2024, nearly tripling from $1.34 billion in 2023, yet clients report few transformative results

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