A few weeks ago Bain and Co. published a report that created some hubbub. Here's Bloomberg, September 24: "AI Market Will Surge to Near $1 Trillion by 2027, Bain Says".
I was asked why we didn't link to or reference the story and the simple answer is, the report reads like an advertisement for Bain's services. Here's Bain's press release announcing the publication, September 25: "Market for AI products and services could reach up to $990 billion by 2027, finds Bain & Company's 5th annual Global Technology Report".
And here's the rest of the story from Sherwood News, October 18:
Bain is the latest consulting firm to cash in on the AI boom.
In late June, we discussed how consulting firms had quietly become the big winners of the AI boom.
Accenture generated $900 million, or an annualized $3.6 billion, in GenAI bookings in Q3, compared to OpenAI's annualized revenue of $3.4 billion at the time. Additionally, Boston Consulting Group, which had $12.3 billion in 2023 revenue, projected 20% of its 2024 revenue and 40% of its 2026 revenue would come from AI integration projects, and IBM's consulting arm had booked a cumulative $1 billion from its AI products.
Four months later, the management consulting x artificial intelligence business pipeline remains quite robust, with The Wall Street Journal reporting that OpenAI and Bain have expanded their partnership, allowing Bain to sell industry-specific solutions built on OpenAI to clients:
At the core of the deal is a team that will build industry-specific artificial-intelligence tools for sectors including retail and life sciences, said Christophe De Vusser, worldwide managing partner and chief executive of the consulting firm. Bain is putting about 50 employees into the joint effort. OpenAI Chief Operating Officer Brad Lightcap declined to say how many OpenAI team members will be involved.
When I first wrote about Accenture's $3.6 billion generative AI business, I found it amusing that the only company (besides OpenAI, of course), that had managed to make money on artificial intelligence was a consulting firm. However, looking at it now, these AI x consulting partnerships actually make a lot of sense.
Consulting firms, at the end of the day, are paid to help clients improve their businesses. OpenAI's models are incredible tools that can help users more effectively organize, understand, and draw conclusions from data, but these models, by default, aren't fine-tuned to work with specific users' data.
Yes, an individual can log on ChatGPT and use it as a research tool, but in its basic format, companies can't just seamlessly integrate ChatGPT with their private data to improve their businesses. While some companies, like fintech unicorn Ramp, have leveraged OpenAI's models to enhance their own products, other companies either don't have or don't want to use internal resources to build their own OpenAI-based tools.
Enter: consulting firms, who are, as we said, paid to help clients improve their businesses....
....MORE
Some might dispute that consulting firms are paid to help clients improve their business, instead being paid a few million per contract to stroke the egos of the upper management that hires the consultant, praising said upper management for recognizing they had an issue, hiring the consultant and by the way the golf tournament is on us, no billables.
Some prior thoughts on consultants:
Johnson Controls Fires Consultant After Affair With CEO (JCI)
Yves Smith Says Nice Things About McKinsey & Co. (they're in the business of propping up diseased managements)
....I've never hired McKinsey and so don't have direct experience of their abilities. Besides the "root of all evil" post we've had a few others that don't speak to any special insight from the consultants:
McKinsey says Germany in terminal decline
McKinsey Sees No End to the Global Commodities Supercycle
McKinsey--"Disruptive technologies: Advances that will transform life, business, and the global economy"
Clayton Christensen: The Next Industry Headed Toward Disruption--Consulting
"Killing Strategy: The Disruption Of Management Consulting"
"McKinsey & Company: Capital’s Willing Executioners"
They should wear green jackets like the winner of the Masters golf tournament or the Ordnungspolizei.
"How did McKinsey advise CNN+ so badly*?"
An oldie but goodie:
The Devil tells a Consultant, "OK, I can make you richer, more successful and more famous than any Consultant alive. In fact, I can make you the greatest Consultant that ever walked the planet."
"Great" says the Consultant, "What do I have to do in return?"
The Devil smiles, "Well, of course you have to give me your soul," he says, "but you also have to give me the souls of your children, the souls of your children's children and, just for good measure, you have to give me the souls of all your descendants throughout eternity."
"Wait a minute," the Consultant says cautiously, "What's the catch?"
Our most recent consultant post was to a pretty funny story at n+1 August 31:
Consultant