We will study the impact of ChatGPT on the Consulting Industry in this series of articles. The 1st part of this article will look at the possibilities and implications, while the 2nd part will examine the risks and how to prepare for the upcoming transformation. Â
To constrain the problem a bit, let us focus on the Management Consulting market only. The same approach can be followed towards other types of consulting. We will apply the following structure and framework to answer this question:Â
Possibilities of using ChatGPT in Consulting - Part 1
- Types of Consulting services offered in the market?
- What are the key activities and value propositions of the Consulting industry? Why are management consultants needed?
- How are these activities performed by Consultants? What tools do they use? How much human insight and ingenuity is needed for each task?
- What are the applications of ChatGPT and how much can they impact the existing value props - can we have a point of view on the impact?
- Are there new possibilities that ChatGPT can enable for the consulting industry?
Navigating the Risks: Preparing for the ChatGPT Revolution in Consulting - Part 2
- What could be the risks and challenges of using ChatGPT in Consulting? (ethics, privacy, explainability etc.)
- How to prepare ourselves?
- How to use human insight and ingenuity to complement?
Possibilities of using ChatGPT in Consulting
Types of Consulting services offered in the market?
The following are the key consulting services that are offered in the market:
- Management consulting: These services help organizations improve their performance by providing advice on strategy, operations, finance, and other business-related areas.
- IT consulting: These services help organizations improve their technology systems and processes, including areas such as software development, data management, and cybersecurity.
- Financial consulting: These services provide advice on financial planning, investment strategies, and other financial-related areas.
- Human resources consulting: These services provide advice on employee relations, recruitment, and other human resources-related areas.
- Marketing consulting: These services provide advice on marketing strategies, advertising, and other marketing-related areas.
- Environmental consulting: These services provide advice on environmental compliance and sustainability.
- Legal consulting: These services provide advice on legal matters, such as contracts, intellectual property, and compliance.
- Engineering consulting: These services provide advice on engineering projects and designs, including areas such as civil engineering, mechanical engineering, and electrical engineering.
- Healthcare consulting: These services provide advice on healthcare related issues, including areas such as clinical operations, revenue cycle management, and regulatory compliance.
What are the key activities and value propositions of a management consultant in most projects?
Problem identification
Consultants work with their clients to identify the problems that need to be addressed, and to define the scope of the project.
Data collection and analysis
Consultants collect and analyze data from a variety of sources, such as interviews, surveys, and financial statements, to gain a better understanding of the client's business.
Research and benchmarking
Consultants research and benchmark industry best practices, to identify potential solutions and opportunities for improvement.
Solution development
Consultants develop solutions to address the identified problems and opportunities. This can include developing new business models, processes, and technology systems.
Recommendations and execution
Consultants present their findings and recommendations to the client, and work with them to implement the solutions.
Monitoring and evaluation
Consultants monitor the progress of the implementation and measure the impact of the solutions.
Communication and presentation
Consultants communicate with the client throughout the project and prepare presentations to share their findings, recommendations, and progress with the stakeholders.
Project management
Consultants manage the project, including timelines, budgets, and resources.
How are these activities performed by Consultants? What tools do they use? How much human insight and ingenuity is needed for each task? What activities involve repetitive and manual work?
In general, the following table is a good representation of the human insight and manual work needed in different activities performed by a Management Consultant. Â
| Activity | Tools used | Human insight & Ingenuity | Repetitive and manual work |
|---|---|---|---|
| Problem identification | Interviews, surveys, meeting | High | Low |
| Data collection and analysis | Surveys, Financial Statements, Data visualization software | Medium | Medium |
| Research and benchmarking | Industry reports, Research databases, Benchmarking software. Posing the right questions needs human insight | Medium | Low |
| Solution development | Mind-mapping software, Prototyping tools, Business modeling software | High | Low |
| Recommendation and implementation | Project management software, Communication tools | Medium | Medium |
| Monitoring and evaluation | Performance metrics, Surveys, Data visualization software | Low | Medium |
| Communication and presentation | Presentation software, Communication tools – making a communication plan needs human insight | High | Low |
| Project management | Project management software, Scheduling tools | Medium | Medium |
What would be the impact of ChatGPT and AI on these activities?
In general, the tasks that need a High level of Human Insight & Ingenuity and are not repetitive would continue to need expertise of Management Consultants. That said, certain activities in these tasks would become more efficient by using AI and ChatGPT. For example, ChatGPT can help to streamline Research work. However, posing the right questions and understanding the interplays between the answers would still need human insight. This advantage may also get eroded as more AI capabilities enter the market.Â
Posing the right questions and understanding the interplays between the answers would still need human insight, however this advantage may also get eroded as more AI capabilities enter the market.
What would be the impact of ChatGPT and AI on these activities?
Here is a table that summarizes the potential impact of ChatGPT and AI on the key activities performed by management consultants:Â
| Activity | Tools used | Human insight & Ingenuity | Repetitive and manual work | Impact of ChatGTP and AI |
|---|---|---|---|---|
| Problem identification | Interviews, surveys, meeting | High | Low | Low |
| Data collection and analysis | Surveys, Financial Statements, Data visualization software | Medium | Medium | Medium |
| Research and benchmarking | Industry reports, Research databases, Benchmarking software. Posing the right questions needs human insight | Medium | Low | Medium |
| Solution development | Mind-mapping software, Prototyping tools, Business modeling software | High | Low | Medium |
| Recommendation and implementation | Project management software, Communication tools | Medium | Medium | Medium |
| Monitoring and evaluation | Performance metrics, Surveys, Data visualization software | Low | Medium | High |
| Communication and presentation | Presentation software, Communication tools – making a communication plan needs human insight | High | Low | Low |
| Project management | Project management software, Scheduling tools | Medium | Medium | Medium |
This is a general representation and the actual impact of ChatGPT and AI on these activities might vary depending on the specific implementation and the client’s needs. Â
Impact of ChatGPT to Management Consulting
High impact
AI-powered tools such as ChatGPT can significantly automate the process of research and benchmarking, by providing relevant information in real-time, and assist in monitoring and Evaluation by providing real-time insights and performance metrics.
Medium impact
AI-powered tools such as ChatGPT can assist in data collection and analysis by providing real-time insights, and can assist in the process of solution development by providing suggestions and recommendations based on the data collected. AI can also assist in the implementation process by helping with the project management tasks.
Low impact
AI-powered tools such as ChatGPT have a low impact on problem identification and communication and presentation, as these activities involve human interactions, negotiations and creativity.
Are there new possibilities that ChatGPT can enable for the consulting industry?
It is safe to say that ChatGPT will make the job of management consultant much more interesting and efficient. New possibilities related to business models should open up as more AI and Generative AI based tools are deployed in use. Â
