How AI and Outcomes Are Reshaping the Industry: Over the past three decades, consulting has undergone a fundamental transformation.
In the 1990s, firms were largely defined by their ability to deliver “big strategy” insights to CEOs and boards. The product was almost always a deck of recommendations, and the business model revolved around time-and-materials billing at high margins.
30 years on and strategy remains important, but clients increasingly expect end-to-end support. This shift reflects both rising expectations and the recognition that recommendations without execution no longer satisfy the demands of modern organisations.
Technology is now the gravitational centre of consulting, with AI becoming more emerged on a daily basis. What was once confined to ERP implementations or IT systems, integration has become inseparable from almost every engagement. Cloud migrations, digital platforms, cybersecurity, data modernisation, and AI are no longer “support functions” but the core of business transformation. Market forecasts place digital transformation spend in the trillions, with sustained double-digit growth, underscoring how much of the consulting pie is now technology-led.
Consultants once leaned heavily on interviews and benchmarks, they now differentiate through the ability to harness real-time data, build predictive models, and deploy AI tools at scale. The most recent leap is generative AI, which firms are embedding in both client delivery and internal knowledge systems. McKinsey’s “Lilli”, BCG’s internal copilots and BearingPoint’s Persona Engine demonstrate how AI is automating research, analysis, and even slide generation. Analysts describe this as a structural change in the consulting model, shifting leverage away from junior manpower toward AI-enabled assets.
At the same time, clients themselves have become more sophisticated. Many large organisations now house their own strategy and transformation teams, closing the knowledge gap that once gave external firms privileged standing. As a result, consulting engagements are less about generic frameworks and more about providing scarce expertise, acceleration, or access to proprietary data and tools. The balance of power has tilted: buyers are more discerning, procurement functions are tougher, and firms are increasingly required to prove measurable value.
Over the last decade, large firms have acquired design studios, digital agencies, and engineering shops to close the “last mile” between strategy and customer experience. Accenture’s acquisition of Fjord and other studios symbolised this blending of design, product, and consulting. Resulting in many firms now delivering not only strategic advice, but also digital products, customer journeys, and ongoing managed services.
While the traditional billable-hour structure still dominates, firms are experimenting with outcome-based pricing, shared-risk arrangements, and longer-term managed services contracts. This shift reflects client demand for more accountability and alignment with measurable business results. Analysts note that consulting is slowly but steadily moving toward annuity-like revenue streams, particularly as firms bundle advisory with ongoing operations.
Alongside technology changes, sustainability and ESG have become central as regulation—such as the EU’s Corporate Sustainability Reporting Directive—forces companies to adapt. Consulting firms are building sustainability practices at pace, offering both compliance-focused services and strategic support for net-zero transitions. The UK, for example, has emerged as a hotspot for sustainability advisory, and analysts forecast strong growth in this segment through the remainder of the decade.
What emerges is a picture of an industry that has both globalised and specialised. The big firms operate across virtually every sector and geography, but boutique players thrive by going deep in domains like fintech, biotech, climate tech, or AI safety.
Looking ahead, the next five years may be defined by three interlocking shifts. First, consulting will become AI-native, with generative tools supporting everything from research to modelling to solution design, while humans focus more on framing problems and exercising judgment. Second, advice will continue to be an “asset”: firms will package software, data platforms, and playbooks alongside human expertise, blurring the line between vendor and advisor. Third, more revenue will be tied to outcomes and ongoing operations, as clients push for evidence of real business impact.
Together, these dynamics will push consulting further away from a people-only model and toward a hybrid of talent, technology, and intellectual property.
In summary, consulting has migrated from elite, strategy-focused advisory to a tech-enabled, outcomes-driven industry.
Firms that combine deep domain expertise with reusable intellectual assets and operating accountability will be the ones to succeed. For clients, this evolution means more leverage: they can demand not only smart recommendations but also tangible results. For firms, it raises the stakes: the real moat is no longer just bright people, but bright people equipped with proprietary tools, data, and the capacity to deliver measurable impact.
To deliver measurable impact and add value, skills such as analytical thinking, judgement and emotional intelligence have grown in importance. And the difference between those that have them and those that don’t, is now even more visible. We have been supporting clients for 35 years to develop and enhance these skills. They are no longer part of a consulting tool box, they are the tool box, because without them, you can’t use the tools.
Or maybe without them, you are eaten by the crocodile in the moat?
If you have enjoyed this point of view, you can watch William Johnson’s video here: Three decades in consulting have taught us that being bright is not the only factor. Here’s what changes and what remains the same when AI handles more research, analysis and even slide generation.