Consulting's Day After Tomorrow

By Tom Rodenhauser, Managing Partner, Kennedy Intelligence I Consulting Industry’s Strategic Insights Partner I Host and Editor of Consultants Talk podcast

Global Consulting Faces its Reckoning

While channel surfing the other night, I came across 'The Day After Tomorrow," Roland Emmerich's 2004 eco-disaster movie. It's a guilty pleasure film, the type that keeps your fingers off the remote for a bit.

This time around I couldn't help but draw parallels to what's happening with the global consulting industry. In the movie, cataclysmic climate events converge to wipe out a good chunk of humanity. With global consulting, the promise of AI creates a different type of peril. One moment firms are spouting AI's virtue, the next AI delivers massive systemic shock.

Global consulting faces its reckoning

In the movie, governments admit to seeing the warning signals, but only after most of the world is under mountains of ice. Consulting firms seem a bit mixed. KPMG just rolled out Workbench, a multi-agent platform meant to standardize delivery worldwide. EY’s new CEO is simultaneously trumpeting AI as the lever that could double headcount while insisting “no jobs will be lost."

Is AI the bellwether of a new era, or the clanging ocean buoy in Emmerich's film that signaled civilization-destroying super storms?

Inside Consulting's Day After Tomorrow

The answer is both. AI is not Digital 2.0. Yes, buyers of consulting services tell us they're hiring consultants to help determine strategies and implications for AI. But clients are not hiring consultants at scale to "implement" AI solutions.

The fundamental problem major consultancies face centers on their resource-based, time-dependent, implementation-focused commercial model. Ironically, clients still have needs around legacy ERP systems and general nuts-and-bolts operations. As a result, consulting demand remains solid in certain sectors and middle-office functions (a Big 4 partner told us his team's backlog for SAP work stretches 12 months).

This leaves many of the old guard firms with a dilemma; how do you support the old people-based implementation business while building a new AI-grounded, value-creation commercial model?

In the film, survivors trek towards the equator and warmer climates. Consulting’s journey is equally arduous. We will continue to see staff cuts in the short term as firms seek to sustain margins. Over the next 18-24 months, some set of consultancies will figure out how to fuse change management with AI and price their services on the value created.

Longer term, we expect a hiving-off of large chunks of the old guard firms, resulting in fewer mega consultancies and a retrenchment to more specialized providers that stress value over hours. 

The new landscape will look vastly different. Are consulting leaders ready? 

Ultimately, Consulting’s Day After Tomorrow is not just about survival, but about which firms can adapt fast enough to build AI-driven value while shedding outdated, people-heavy models.

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About the Author

Tom Rodenhauser has tracked consulting’s weather patterns for three decades. As Managing Partner at Kennedy Intelligence, he and his team help leaders navigate strategy, M&A, and performance in professional services.

(This commentary is for information only and does not constitute investment, tax, or legal advice.)

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