AI business consulting: is it possible?
Can artificial intelligence perform management consulting for small and medium businesses?
Photo by Moose
Most business areas are covered with books about best practises. MBA program is mostly success case studies. The amount of knowledge about business management is so big that it should be a no-brainer to organize a successful business in a well-known industry.

If it is something a human can do based on a history of cases and some metrics understanding, there should be an artificial intelligence for that.
Can it do so today?
Not really in general, and definitely not in the case of small and midsize businesses.

Why?
Because rather than small and medium-size businesses having issues that are simpler to resolve than those in large businesses, they tend to have problems of similar complexity with narrow specialization. Operational issues may require highly specialized solutions that, frankly, general management consultants may be poorly equipped to solve. To ask an AI to be developed to solve such a problem may be possible, however the cost to design and implement would, today, be prohibitive.
Ian Wright, Principal at Deloitte
So Ian thinks that it is question of cost. Should we wait for somebody to make an AI for one type of business and then for another?
More broadly can AI replace consultants? Sure, in theory. Just as ERP could if everyone adopts standard processes, analytics can if everyone can just write the right report and so on. Reality is that all of these technology tools need to be appropriately applied and the line between technology consulting to implement the tool and management consulting to define how to use the tool is blurred to the point of no longer existing.
Steve Shu, author of The Consulting Apprenticeship, saw the topic of AI replacing consulting first in Harvard Business Review, and more recently the Economist also covered AI and consulting.
As to whether AI can displace consulting in the small and medium business market, the cost structure would have to come down, be much more focused in terms of scope (more like a packaged app or add-on) and garner top-of-mind awareness with those small and medium businesses. I'm not sure where those areas would be, but a few came to mind as potential entry points for AI: salesforce systems, accounting systems, marketing reputation management and UX/CX/web configuration, analytics and testing systems.
A business consultant Mark Schneider answers NO:
AI and any kind of IT system remains an expert system that you can consult on details. Even if you had a sentient being like an Android (e.g., Data from Star Trek), you still have the problems with social complexity that an Android does not understand. An organization contains of a group of people; it's as close to a living organism as it gets since it reacts both to internal and external factors.
Mark does see the future for AI for two things:
One is to solve and automate standardized routine problems (e.g. accounting/tax questions).

Two concerns an AI as an expert system to consult on details, for example, regarding law or any other codified area.

But you still will need a human at the end that interprets the results in the correct manner.
Michel-Emmanuel De Thuy, partner at Management Consulting, thinks the question if AI could replace management consultants is comparable to the question: Can Excel replace the consultants ?

"AI might help consultants or even the clients but not replace them for the time being."
Mark Schneider formulates two issues in management consulting, which prevents 100% automation of decision-making:
1. One is that the customer understands his/her problem or symptoms in a correct manner and can relay it to the consultant. Just because a client says something doesn't mean that the problem is located in the area that the client describes. There are too many factors involved that constantly change due to reality and the environment that cannot be covered by an IT system.

2. Two, even if theoretically a correct diagnosis with all the facts could be relayed and calculated, you still have the problem that the client needs to understand the solution and relate it to the problem in the organization. A big part of consulting is implementing the correct solution in an organization.
AI startups in the area of business management and analytics should be focused on building helper systems for experts in decision-making.