{"id":665212,"date":"2026-08-31T13:21:14","date_gmt":"2026-08-31T13:21:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/665212\/"},"modified":"2026-08-31T13:21:14","modified_gmt":"2026-08-31T13:21:14","slug":"consultants-head-for-a-showdown-with-their-own-clients-as-ai-upends-industry-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/665212\/","title":{"rendered":"Consultants head for a showdown with their own clients as AI upends industry \u2013 The Irish Times"},"content":{"rendered":"

Consultants are on a collision course with their clients over the cost of giant IT projects, as companies look to artificial intelligence (AI)<\/a> to cut spending on external advisers.<\/p>\n

In interviews, large and small businesses around the world said they are demanding reduced fees or moving work in-house, aided by new AI tools and software that requires less integration.<\/p>\n

Consulting firms including the Big Four and Accenture <\/a>that have historically deployed armies of staff to help clients integrate new IT platforms with older systems are under pressure.<\/p>\n

\u201cConsulting resources will be needed in very different numbers and also with different skills,\u201d said Jochen Kamp, who is leading an IT overhaul at German drugmaker Bayer. \u201cThe traditional consultant as we know them today will certainly have to change. Fewer and fewer of them will be needed.\u201d<\/p>\n

The shift is not yet obvious in industry revenues. Source Global, a market research group, estimates clients will spend $420 billion (\u20ac362 billion) on technology consultants this year, up 8 per cent on 2025. Advising on new technology, including AI, makes up $140 billion, while implementation work \u2013 the bread and butter of professional services for decades \u2013 accounts for a much larger proportion, $236 billion.<\/p>\n

Investors are betting that those revenues are vulnerable. Capgemini shares have fallen 31 per cent so far this year. Accenture shares are down 27 per cent, with a sharp drop in June when it said some clients had delayed giant IT transformation projects.<\/p>\n

At Bayer, midway through a six-year overhaul of an SAP-based system, Kamp said 30 AI agents were supporting coding and testing, with the goal of having \u201csignificantly fewer consultants in the programme doing a deployment\u201d.<\/p>\n

SAP claims planned changes to its systems will help cut the cost of external consultants by up to 50 per cent. It is building in AI and other components so that consulting firms can work more quickly, therefore billing fewer hours, or by allowing buyers to do without advisers altogether.<\/p>\n

Dominik Asam, SAP\u2019s chief financial officer, predicted AI would \u201cmassively displace\u201d parts of consulting.<\/p>\n

Clients sense that they have more leverage. Greg Meyers, chief digital and technology officer at the drugmaker Bristol Myers Squibb, said the cost of tech support often provided by consulting firms\u2019 managed services operations was \u201ccollapsing\u201d. Additionally, \u201cin our cyber security area, we used to pay a lot of third parties to monitor things on our behalf. Now AI is doing a lot of that monitoring and those contracts are going away,\u201d he said.<\/p>\n

The result is that BMS has put pressure on its external advisers to lower costs or to switch from billing by the hour to novel approaches such as fixed-price contracts or performance-related fees.<\/p>\n

\u201cI\u2019m totally fine for this to be margin-expanding for them as long as we get to participate in the downside. If we\u2019re not satisfied, it has never been easier to take that work in-house,\u201d Meyers told the FT.<\/p>\n

One bugbear is that consulting firms\u2019 partners are typically incentivised to keep selling more and more to a client, year over year, at higher and higher prices, so BMS has pressured firms to change their teams.<\/p>\n

\u201cWhat I find is when new people show up to the account, everything\u2019s a possibility for them,\u201d said Meyers. \u201cThey\u2019re looking for outcomes-based contracts, different pricing regimes. Sometimes it is healthy for everyone to do a reset.\u201d<\/p>\n

Aiman Ezzat, chief executive of the consulting group Capgemini, says reports of the death of his profession have been exaggerated and, asked about SAP\u2019s claim to be able to save up to 50 per cent on the cost of implementation, he laughed.<\/p>\n

\u201cIt\u2019s ambitious,\u201d he said. \u201cWe don\u2019t see 50 per cent. But definitely we have redesigned the way we deploy SAP to be able to reduce the cost of implementation and to speed it up.\u201d<\/p>\n

Such deflation in IT consulting is a fact of life, Ezzat argued, and firms have always adapted. \u201cWe are more productive, the business got more industrialised, we moved to offshore, etc. I would have three or four times more people if I was still working the same way I was working 20 years ago.\u201d<\/p>\n

He also pointed to strong results from Capgemini\u2019s specialist businesses. These focus on technical engineering advisory work for industries such as aerospace and car making that cannot be handed wholesale to AI. \u201cWe are not just dependent on the IT budget for our food,\u201d Ezzat said.<\/p>\n

The growth of the consulting market this year reflects demand for new capabilities focused on helping companies with AI. These include navigating all the new software options, combating the cyber security threats unleashed by the new models, and offering \u201cchange management\u201d advice on how to get employees to use AI productively and responsibly.<\/p>\n

Source Global\u2019s latest survey of technology consulting clients pointed to significant dissatisfaction, however. Only one in three said an IT transformation project overseen by external advisers had been wholly successful. Generalist consultants such as the Big Four \u2013 Deloitte, EY, PwC and KPMG \u2013 scored worse for satisfaction than IT specialists such as Accenture.<\/p>\n

Source Global\u2019s head of market trends, Nicholas Jotischky, said there was a growing desire to cut out middlemen. \u201cThere\u2019s a feeling of, why can\u2019t I just go straight to a technology firm or sub-vendor with whom the Big Four is partnered?\u201d he said.<\/p>\n

\u201cThe Big Four firms still do very well, with 55 per cent of clients still saying they\u2019re going to use them more in the next 12 months. It\u2019s just a long way down from the 80 per cent a year before. Competition is hotting up.\u201d<\/p>\n

Some companies have been emboldened by success in cutting out external advisers on smaller projects such as market research.<\/p>\n

\u201cWe are definitely spending less with consultants,\u201d said Mark Barrocas, chief executive of SharkNinja. Using AI has enabled his New York-listed household appliance company to turn projects around in a fraction of the time it took previously. <\/p>\n

SharkNinja, which reported $6.4 billion in revenues last year, just completed an eight-week project using Palantir technology to analyse sales promotions and media spending. It has deployed a demand forecasting system driven by AI. Amazon Web Services is building a media analytics tool that will go live in September. <\/p>\n

\u201cWhat we have found is working with these technology partners, together with the hands-on business leaders running these departments, has proved to be much more effective than bringing in a third-party consultant that doesn\u2019t necessarily know the business,\u201d said Barrocas.<\/p>\n

Several executives claimed to have found OpenAI\u2019s ChatGPT or Anthropic\u2019s Claude can produce a market research report that is almost as good as a study by McKinsey or Boston Consulting Group in a fraction of the time. There are also growing experiments in supplementing specialist consultants such as advertising agencies with AI.<\/p>\n

\u201cContent creation with the help of AI tools can increase productivity, can increase speed, can increase quality and testing of many of these classic agency jobs,\u201d said Andre Schulten, chief financial officer of the consumer goods behemoth Procter & Gamble. \u201cWe see a combination of both as we focus on where the consumer is going.\u201d<\/p>\n

Consulting spending has fallen at some of Europe\u2019s biggest banks. Italy\u2019s UniCredit reported a 24 per cent drop in spending on external consultants during the first six months of the year, while France\u2019s Soci\u00e9t\u00e9 G\u00e9n\u00e9rale reported a 9 per cent decline.<\/p>\n

Commerzbank, Germany\u2019s second-largest lender, plans to invest \u20ac600 million into AI by 2030 for annual cost savings of \u20ac500 million that it says will come in part from its consulting bill. <\/p>\n

The bank\u2019s head of AI, Oliver D\u00f6rler, says it is already seeing benefits in the modernisation of ancient IT systems. Updates used to require external vendors to analyse source code and log files to identify dependencies with other parts of the bank\u2019s IT infrastructure. \u201cThey would have faced an enormous workload, sometimes spending months carrying out analyses that today I can have AI prepare within days,\u201d he said.<\/p>\n

But there are benefits beyond simple cost savings. Commerzbank also \u201coften found that [consultants] learn more from us than we learn from them\u201d, D\u00f6rler said, meaning the bank keeps a competitive edge by doing more in-house.<\/p>\n

Jacob Thaysen, chief executive at Illumina, who worked as a management consultant early in his career, said AI was allowing the gene sequencing company to \u201ctake a stab\u201d at more projects \u201cbefore we need the help of the big implementers. The future of consultancy has to be more on advising leaders.\u201d<\/p>\n

Large corporations are continuing to lean on consultants in some of the ways they always have: planning big cost-cutting programmes and taking over basic corporate functions that can be done more efficiently by the consultancies\u2019 outsourcing operations. <\/p>\n

British American Tobacco said that external consultants were \u201cmore important\u201d as the company goes through a three-year cost-saving programme focused on AI, which began with cutting 5,500 roles and outsourcing a further 3,500 to companies including Accenture. <\/p>\n

Volkswagen recently turned to Boston Consulting Group and McKinsey as it weighed plans to cut up to 100,000 jobs and end production at four plants in Germany. \u2013 Copyright The Financial Times Limited 2026<\/p>\n","protected":false},"excerpt":{"rendered":"Consultants are on a collision course with their clients over the cost of giant IT projects, as companies…\n","protected":false},"author":2,"featured_media":665213,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[261],"tags":[26294,291,289,290,10914,18,16242,19,17,1126,2356,82],"class_list":["post-665212","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-accenture","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-deloitte","tag-eire","tag-ey","tag-ie","tag-ireland","tag-kpmg","tag-pwc","tag-technology"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/117190333920591478","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/665212","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=665212"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/665212\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/665213"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=665212"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=665212"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=665212"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}