A Work Project, presented as part of the requirements for the Award of a Master’s degree in

Management from the Nova School of Business and Economics.

CONSULTING 4.0: AN EXPLORATORY ANALYSIS OF THE ROLE AND POTENTIAL

OF ARTIFICIAL INTELLIGENCE IN THE CONSULTANCY OF TOMORROW

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MARCO WALL
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EV
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Work project carried out under the supervision of:

Paulo Faroleiro

22/01/2024
Abstract
The rapid evolution of Artificial Intelligence (AI), particularly Generative AI (GenAI), has

catalyzed significant shifts across business sectors, revolutionizing traditional operational

models. This study focuses on the consulting industry, a key player in AI integration and

advancement. It explores AI's impact in four domains: establishment in consulting, application

areas, internal process effects, and ethical considerations. Utilizing triangulation, combining

Systematic Literature Review (SLR) and qualitative interviews, this analysis comprehensively

understands AI's diverse effects on the consulting industry. It reveals the current state of AI

deployment, highlighting its business value and transformative influence in the consulting

sector.

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Keywords: Artificial Intelligence; Consulting; AI in Consulting; GenAI; Strategies with AI
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Acknowledgement
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I would like to acknowledge and give my warmest thanks to my supervisor Paulo Faroleiro,

who made this work possible. His guidance and advice carried me through all stages of

writing this thesis.

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This work used infrastructure and resources funded by Fundação para a Ciência e a

Tecnologia (UID/ECO/00124/2013, UID/ECO/00124/2019 and Social Sciences DataLab,

Project 22209), POR Lisboa (LISBOA-01-0145-FEDER-007722 and Social Sciences

DataLab, Project 22209) and POR Norte (Social Sciences DataLab, Project 22209).

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1. Introduction ....................................................................................................................... 3
2. Theoretical background ................................................................................................... 4
2.1. Artificial Intelligence & GenAI ................................................................................... 4
2.2. Consulting industry...................................................................................................... 5
2.3. AI usage at work .......................................................................................................... 6
3. Research methodology ...................................................................................................... 7
3.1. Research questions ...................................................................................................... 7
3.2. Triangulation ............................................................................................................... 7
3.3. Systematic Literature Review (SLR) ........................................................................... 8
3.3.1. Planning the review.................................................................................................. 8
3.3.2. Conducing the review ............................................................................................ 10
3.4. Qualitative research ................................................................................................... 10

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3.4.1. Sample selection .................................................................................................... 11
3.4.2. Data collection ....................................................................................................... 12
3.4.3. Data analysis .......................................................................................................... 12
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4. Analysis and findings ...................................................................................................... 13
4.1. SLR results ................................................................................................................ 13
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4.1.1. RQ1 - Prevalence of AI technology ....................................................................... 13

4.1.2. RQ2 - Areas of consulting ..................................................................................... 15
4.1.3. RQ3 - Organizational effects on work processes ................................................... 16
4.1.4. RQ4 - Ethical governance in AI integration .......................................................... 17
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4.2. Qualitative research results ........................................................................................ 18

4.2.1. RQ1 - Prevalence of AI technology ....................................................................... 19
4.2.2. RQ2 - Areas of consulting ..................................................................................... 20
4.2.3. RQ3 - Organizational effects on work processes ................................................... 21
4.2.4. RQ4 - Ethical governance in AI integration .......................................................... 21
4.3. Triangulation results .................................................................................................. 22
5. Discussion......................................................................................................................... 23
5.1. Limitations and considerations .................................................................................. 23
5.2. Directions for future research .................................................................................... 24
5.3. Managerial implications ............................................................................................ 25
5.4. Conclusions ............................................................................................................... 25
6. References ........................................................................................................................ 26
7. Appendices ....................................................................................................................... 32

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1. Introduction

The consulting industry is at the dawn of a new era in which artificial intelligence (AI) is

increasingly relevant. Through its explorative growth phase in 2023, Generative AI has ensured

that at least a third of companies use the technology in at least one business function (McKinsey,

2023). Large Language Models (LLM), such as Chat GPT, attracted a million users in five days

and 100 million requests in two months (Reuters, 2023). From another perspective, the

transition of topics from technical departments to the focus on corporate management is

becoming clear (McKinsey, 2023). In this context, the consulting industry plays a key role, as

it is an essential value driver for other industries (Cerruti et al., 2019).

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Nevertheless, the question remains about how the consulting industry will deal with this

technological progress. Christensen et al. (2013) have already highlighted the change in the
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consulting industry, which manifests itself in a stronger focus on software- and technology-

based solutions. This development points to a fundamental transformation of the consulting

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industry, in which traditional approaches based on human expertise are increasingly

complemented and enhanced by innovative, technology-based methods (Lemus-Aguilar &

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Hidalgo, 2014).

Recent studies show that using AI impacts the business model (Kanbach et al., 2023). Using AI

in the consulting industry can increase efficiency (Dell'Acqua et al., 2023) but also entails

increased ethical risks (Genguta et al., 2023). However, there are currently only a limited

number of studies that look at the holistic impact of AI on the consulting industry. The purpose

of this research is to give a comprehensive overview of how AI influences the consulting

industry by examining four main areas: the degree of establishment of AI in consulting, areas

of application of AI in consulting, effects on internal processes, and effects on ethical risks and

concerns using AI.

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This paper is structured as follows: The theoretical background introduces the topic and

explains the most important definitions. Subsequently, the research questions are first answered

with the help of a Systematic Literature Review (SLR) and then further illuminated and

expanded with in-depth qualitative interviews. Using triangulation, the results of both

methodologies are combined. The paper concludes with a discussion of the results, including

limitations and directions for future research. This study is one of the first to merge the

combinatorics of the consulting industry with AI technology.

2. Theoretical background

The theoretical background defines important terminologies and insights into the consulting

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industry and the current state of AI usage at work.

2.1. Artificial Intelligence & GenAI

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The academic and management literature does not provide one clear definition of AI. The

academic consensus of AI can be seen as a new way of programming computers so that they
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ultimately think humanly (Sarker, 2022). Huang et al. (2019) defined AI as a field that uses

algorithms and computational approaches to machine intelligence that were previously only

used by humans. Sophisticated decision-making processes such as automatic control and

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predictive analytics utilize AI systems far superior to humans. In particular, machine learning,

including deep learning and neural networks, enables a system to learn without explicit

programming (LeCun et al., 2015).

The emergence and application of AI technology impact almost all areas of life and the

economy and are arguably one of the most significant phenomena in science and contemporary

history (Zhang & Aslan, 2021). The research literature also reflects an annual increase of 23%

in the number of publications on this topic (Baruffaldi et al., 2020). Interestingly, however,

building blocks of this phenomenon were developed many decades ago, in the mid-twentieth

century, when mathematician Alan Turing coined the concept of “intelligent machines”

(Turing, 1950, p. 459). The first academic paper on the subject of "artificial intelligence" was
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published by McCarthy et al. (1955). An academic winter occurred between 1970 and 1990

(Caner & Bhatti, 2020). At the beginning of the 21st century, Generative AI, often abbreviated

as GenAI (Kanbach et al., 2023), revolutionized the progress of this technology as a subfield of

artificial intelligence. This branch was revolutionized with the introduction of Generative

Adversarial Networks (GANs) by Goodfellow et al. (2014), which have the remarkable ability

to generate highly realistic images, text, and other artifacts, often indistinguishable from

human-generated content, based on previously learned patterns and data inputs. Another

notable milestone on the road to GenAI has been the development of Large Language Models

(LLMs), such as the Generative Pretrained Transformer (GPT) series, which demonstrate an

impressive ability to understand and generate human-like text and assist in tasks ranging from

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writing assistance to conversation simulation (Radford et al., 2019). These models learn from
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massive datasets, allowing them to capture nuances of language and a wide range of knowledge,

facilitating their use in various applications. As Generative AI continues to evolve, its potential
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to reshape industries and the nature of creativity is increasingly recognized. Ethical discussions

about authenticity, copyright, and potential for misuse are also intensifying, highlighting the
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need for responsible use and governance of GenAI technologies (Zhang & Aslan, 2021). The

development of GenAI is a step towards AI that analyzes data and enriches the human

experience with novel creations.

2.2. Consulting industry

Consulting is an intricate, adaptive, and innovative industry. The land of consulting as we know

it today dates back to the beginning of the 20th century when Frederick W. Taylor developed his

principles of scientific management (Kipping & Clark, 2012). Consulting, or management

consulting, is a professional service experienced consultants provide to an organization to

achieve operation performance objectives through complete and accurate analysis of all business

problems affecting organizations, thus making improvement plans (Kubr, 2002). Over the years,

the field has expanded and diversified to cover strategy consulting, management consulting,

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operations consultancy services, IT consultancy services, and many more specializations.

Nowadays, the consulting industry is experiencing a digitalization turn – the changes that affect

all business spheres are occurring (Christensen et al., 2013). Innovation supported by artificial

intelligence is becoming the critical value-add of consulting firms whose clients’ demands are

growing and must be met (Davenport et al., 2020). Data analysis tools are seen as essential tools

in consulting, as they analyze large amounts of data quickly and, therefore, have the potential to

improve customer expectations where necessary (Bughin et al., 2017).

The consulting industry faces increased niche providers amidst the democratization of

information access and the requirement to consult in a world market (Greiner & Ennsfellner,

2010). Thus, consulting firms must improve their internal operations and develop inventive,

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client-sensitive approaches to remain competitive.
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The prospects for the future development of the consulting industry hinge on more profound AI

and other high-tech integrations, transforming not just the content of consulting services but
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also the structures and strategies followed by consulting firms (Nissen, 2019).

2.3. AI usage at work

Artificial intelligence adoption is common in different industries like manufacturing (Rizvi et
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al., 2021), marketing (Martínez-López & Casillas, 2013), entertainment (Nader et al., 2022),

medicine (Paul et al., 2021), and finance (Guo & Polak, 2021) among others. Such keywords,

e.g., neural networks, machine learning, or deep learning, are often associated with business

terms like decision-making, industry 4.0, or business transformation (Ruiz-Real et al., 2021).

Adopting these technologies typically aims to improve efficiency by streamlining business

processes or enhancing company decision-making. (Borges et al., 2021).

This is achieved by transforming traditional work processes to incorporate AI, including

automating routine tasks and affecting decision-making (Davenport et al., 2020). The

technological shift gives rise to the automation of unskilled jobs, replaced by new roles calling

for different skills and creating new workplace dynamics (Kapoor & Ghosal, 2022).

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Nevertheless, it is very difficult to implement the technology with these kinds of non-routine

tasks since such tasks demand creativity, problem-solving, and complex communication (Priya

et al., 2022).

Generally, it is evident that AI, as a developmental force, offers both an opportunity to associate

workers and risks. AI integration effectively balances possible technical approaches and

corresponding morals (Sidorenko et al., 2021). This work depicts these factors and how they

are now reflected in the consulting industry.

3. Research methodology

This section describes the methodology used to answer research questions through

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triangulation, including a Systematic Literature Review (SLR) and qualitative interviews.

3.1. Research questions

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This research is based on several well-defined research questions (RQs) that seek to answer the

varied functions of AI in the consulting practice. The questions are crafted to capture the core
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issues surrounding AI inclusion into consultancy that relate to contemporary problems and

forthcoming trends in the field:

• RQ1: How established is artificial intelligence adoption within the consulting industry?
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• RQ2: In which areas of consulting is artificial intelligence most prominently applied?

• RQ3: How does artificial intelligence affect inner processes inside consulting

companies and the demand for their offerings?

• RQ4: What ethical risks and concerns are associated with integrating AI in consulting?

The aim of each of these questions is to ensure that this study encompasses as comprehensive

an understanding of the role and potential of AI in shaping the consulting industry as possible

and covers all aspects of AI influence in a business context.

3.2. Triangulation
The study utilizes the methodology of triangulation, which refers to using multiple methods or

data sources in qualitative research to develop a comprehensive understanding of complex

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phenomena (Patton, 1999). Due to the multifaceted nature of the AI impact on the consulting

industry, it is necessary to create a theoretical foundation and comprehensive overview of the

existing literature using an SLR and obtain in-depth and detail from practitioners' opinions

through qualitative interviews (Jack & Raturi, 2006). Both data and method triangulation are

used to ensure a comprehensive and robust research process (Guion et al., 2011). Data

triangulation is achieved using diverse information, including scientific literature and expertise.

The triangulation method combines insights from the SLR and qualitative interviews to create

a holistic understanding and utilize the two methodological logics (Patton, 1990). This approach

aligns with the recommendations of Denzin (1978), who emphasizes the importance of using

multiple data sources for a comprehensive analysis.

3.3. Systematic Literature Review (SLR)

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The method of conducting SLR is adaptive, as used by Tranfield et al. (2003) and Gough et al.
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(2013). This methodology has been previously applied in some information systems (Al-Emran
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et al., 2018), technology applications (Ali et al., 2018; Gupta et al., 2018), and operations

research studies (Martins et al., 2019). For example, Caner and Bhatti (2020) adopted this

method to identify AI strategies deployed in the business industry. The SLR consists of three
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steps: "Planning the review," "Conducting the review," and "Reporting on the review." The

initial stage involves finding whether there is a necessity for responding to the abovementioned

research questions. There is a need to review what is currently known in the area due to the

transformative nature of artificial intelligence (AI) in diverse business domains (Caner & Bhatti,

2020), including consulting, and the increasing interest in professional services firms to adopt

AI capabilities (Bezuidenhout et al., 2022). Especially given the new requirements, technological

opportunities, and ethical considerations facing consulting firms (Christensen et al., 2013).

3.3.1. Planning the review

Informed by the research questions and drawing from the theoretical background of AI,

information technology, and the consulting industry, this study focuses on the following key

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terms: "artificial intelligence", "machine learning", "deep learning", "neural networks",

"consulting", "consultancy", "professional service firms", "KIBS", "digital transformation",

"change management", "digital strategy", "digital", "demand" and “ethics”. The search was

conducted at the title level, combining title, abstract, and keywords. The specific combinations

of the key terms are detailed in Table 1 of the Appendix.

The digital databases consulted for this study include Web of Science, Scopus, Science Direct,

and Emerald, each widely used in previous literature (Agarwal et al., 2019; Busalim, 2016; Rekik

et al., 2018). A supplementary search was conducted using Google Scholar to cover broader

scholarly perspectives.

Aligning with the guidelines by Kitchenham et al. (2009), the inclusion criteria for this review

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were as follows: (i) Journal and conference papers that discuss artificial intelligence and
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consulting or cover topics related to digital transformation even without explicitly mentioning

AI, containing the terms in title, abstract, or keywords, (ii) Peer-reviewed articles, ensuring the
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research has undergone quality assessment (iii) Papers published since 2009 to align with

emerging trends in AI and consulting (López-Robles et al., 2019). Exclusion criteria were
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established to exclude: (i) Studies that mention artificial intelligence only tangentially without

direct relevance to consulting, (ii) Non-peer-reviewed sources, such as blogs or opinion pieces,

and (iii) Full articles not available electronically.

The PRISMA approach (Moher et al., 2015) was used for quality assessment, providing a

standardized method for evaluating the relevancy and credibility of the studies reviewed. Data

extraction was planned to align with the research questions and highlight differences and

similarities among study outcomes. The extracted elements include the source of publication,

year of publication, author(s), functions of AI technology in the consulting context, ethical

considerations in AI application, method of research, impacts of AI, target consulting sub-

industry, and challenges to AI adoption if available.

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For the research synthesis phase, the studies were examined through the lens of the established

research questions. Methods for synthesizing and integrating the findings from different studies

were tailored to highlight how each addresses or relates to the specific research questions. This

approach aims to provide a nuanced understanding of the role and impact of AI in the consulting

industry.

3.3.2. Conducing the review

The search aimed to systematically identify and summarize the fragmented literature on the role

of AI in the consulting industry. The process involved the following stages:

• Initially, search terms were applied to titles, abstracts, and keywords without constraints.

The metadata—the title, authors, abstract, publication year, keywords, source title,

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document type, and language—were exported directly into EndNote for efficient duplicate

removal.
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• After this preliminary step, the inclusion and exclusion criteria were stringently applied.
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Now, meeting the requirements, the selected articles were exported from EndNote to

Microsoft Excel for additional analysis. This involved screening the abstracts and forming

further classifications to identify the relevance to the research questions.

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• Finally, data extraction was based on the full content of each selected article. A star-rating

system was used to gauge the relevance of each article to the research questions: 1 Star for

general relevance based on all inclusion criteria; 2 Stars for potential to answer a research

question indirectly; 3 Stars for direct relevance to a research question.

3.4. Qualitative research

For this review to suffice in exploring the deeply embedded nature of AI within the consulting

industry, it must exceed what is currently available in ambition and insight (Myers, 2019).

Though there is some incorporation of insights from SLR, a lack of explicit research on the

augmentation of AI and consulting still exists. In particular, qualitative approaches are

especially well-suited to the research of these emerging and rapidly evolving industries and

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 firms such as AI and consultancy (Neuman, 2014). This research applies an interview-based

methodology to seek consultation with the experts on how AI has specifically impacted their

work and experiences (Taylor et al., 2015). This study applies the inductive coding

methodology from the Grounded Theory perspective (Glaser & Strauss, 2017) since AI

implementation is nascent in the consulting industry. Although primarily inductive, the research

questions, informed by the theoretical background, introduce a structured, deductive element to

the interview guide, ensuring a comprehensive approach. This approach was instrumental in

guiding the development of themes and in understanding the role played by AI through data

analysis (Gioia et al., 2013). Applying an inductive technique in this study is expected to

uncover findings and unique patterns, including AI applications in consultancy. The findings of

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this study using the Gioia Methodology are presented in the present paper, which offers a
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comprehensive analysis of how AI is shaping up in management consultancy.

3.4.1. Sample selection

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This study selected a set of interviewees who could capture the impact of AI on consulting. In

line with Patton's (1990) suggestion to choose a heterogeneous sample of participants,

professionals from AI Strategy Consulting, Strategy Consulting, Management Consulting,

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Pricing Consulting, M&A Consulting, and Foresight Consulting were selected. Figure 1

Appendix shows how the interviews were conducted targeting junior and senior executives to

explore the impact of AI across the organization. The individual semi-structured interviews

provided an opportunity to go into depth about personal experiences and opinions; thus, this

approach could better explore the nature of the topic. For example, Guinan et al. (2019) show

that they could measure the effects of digital disruption on consulting (Guinan et al., 2019). This

paper uses the recommendations of Marshall et al. (2013) regarding the selection of interview

partners so that it collects data up to reaching data saturation.

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