S: Will AI kill the management consultant?

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SIFTED writes:

Management consultancy is one of those marmite jobs. If you’re a young professional with an MBA tucked under your arm then a job at McKinsey, Bain or BCG could well represent the holy grail for your budding career. For many others, consultants’ high salaries and higher fees have made it a profession that people love to loathe.

Now, entrepreneurs are building products with AI that they say can outperform these highly-compensated professionals in certain important tasks — such as identifying M&A targets and performing due diligence on companies — while the firms themselves are racing to incorporate the technology into their own workflows. 

Management consultants now have AI breathing down their necks, and experts say that some in the industry will struggle to survive by the new laws of the jungle as automation creeps in.

“You have no idea about the industry”

Two consultants who saw that the profession would be changed beyond recognition by AI are Richard Karlsson and Johan Cederqvist, both formerly at McKinsey. They’re now cofounders at Stockholm-based Grasp — a startup that says its product “outperforms top tier consultants fourfold.”

The company’s first feature that it is selling to clients is an AI tool that automates M&A target identification — a process that Karlsson says currently involves a lot of manual work for consultants.

“Imagine you’re doing market analysis of the 5G industry — you have no idea about the 5G industry, that’s a typical starting point,” he explains. “You read a lot of articles and market reports, and then you start extracting the relevant pieces of information and putting that down into a PowerPoint or Excel that you then provide to your client. It’s striking how much time we spend on that manual work. It’s repetitive and AI is perfect for that.”

Karlsson says that Grasp’s M&A target identifier has been used by their clients — which include corporates, private equity firms and consultancy firms — to produce more comprehensive results than consultants can achieve.

“Clients have compared our output to what they’ve managed to produce with external support before from consultants and typically it’s better, in terms of the number of relevant companies found, versus the manual methods,” he says. “That’s just because our system goes through the internet, and looks at millions of companies. At McKinsey I would look at thousands.”

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