Trame - Thèse MS

ESSEC EXECUTIVE EDUCATION
Advanced Master Program

International Business Development
Class of 2021-2023
PROFESSIONAL THESIS
For the Advanced Master graduation
POTENTIAL DISRUPTION OF MANAGEMENT CONSULTING

BUSINESS MODELS BY GENERATIVE AI
AN EXPLORATORY STUDY
Par MASSOUDI Ali
Defense date: July 6th, 2023

Thesis director: Dr Anne-Flore MAMAN
1
Titre Thèse professionnelle – Auteur - Date 2
AKNOWLEDGEMENT
I would like to express my deepest gratitude to my professors at the ESSEC businesses

school. Their guidance and availability throughout the year were
Also, I would like to give a special thanks to my classmates for their contribution into making
our master a rich journey, full of experience, knowledge and fun sharing.
I would be remiss in not mentioning my family, especially my mom and brothers. Their
unconditional and unwavering support have been crucial to overcoming every challenge.
Finally, I could not have undertaken this journey without the help of the program Director and
my Thesis Director Mrs. Anne-Flore MAMAN, that was always available to guide me
through my interrogations throughout the whole program.
I would like to mention the name of some people who had a deep impact on me during this
journey:
Mrs. Anne-Flore MAMAN

Mrs. Elisa OPERTI
Mr. Yoann
Mr. Badr BOUTAYEB

DECLARATION OF ORIGINALITY
I attest that this thesis does not incorporate without acknowledgement any material previously
submitted to any institution. To my knowledge does not contain any material previously
published or written by another except where due reference is made in the document.
Ali MASSOUDI

TABLE OF CONTENTS
AKNOWLEDGEMENT.............................................................................................................3
DECLARATION OF ORIGINALITY.......................................................................................4
TABLE OF CONTENTS............................................................................................................5
Table des figures, tableaux et images.........................................................................................6
INTRODUCTION......................................................................................................................7
Partie 1.............................................................................................Erreur ! Signet non défini.
Chapitre 1.....................................................................................Erreur ! Signet non défini.
Chapitre 1.1..............................................................................Erreur ! Signet non défini.
Partie 2......................................................................................................................................10
Partie 3......................................................................................................................................11
Chapitre 1..............................................................................................................................30
Chapitre 1.1.......................................................................................................................30
Chapitre 1.2.......................................................................................................................30
Chapitre 1.3.......................................................................................................................30
Chapitre 2..............................................................................................................................31
Conclusion................................................................................................................................32
Bibliographie.............................................................................................................................33
Annexes.....................................................................................................................................34
Le résumé managérial ou « Executive Summary.....................................................................35

Table des figures, tableaux et images

INTRODUCTION
Management consulting usually addresses C-suite level projects for international firms or
large public service institutions. They have therefore, by their very nature, contributed to
shaping not only the business outlook for several industries, but also various governmental
policies with a significant impact worldwide since the establishment of the first consulting
firms by the end of the 19 th century. The market size for consultancy services has reached an
impressive 860.13 billion dollars in 2023 with an annual growth of 4.1% over the past ten
years (Sources: Consultancy.org, IBIS World). This increasing demand for management
consulting services suggests a strong value proposition that managed to stay attractive
throughout the years and thrive despite several pessimistic warnings expressed by various
academics. Christensen et al. (2013), Friedrich von den Eichen and al (2019) Llewellyn,
(2017) and Nissen (2018) have all expressed the risks faced by traditional consulting business
models in an environment where digital disruption, amongst other disruptors, is expected to
change the competitive landscape.
Digital and technological innovations come with their fair share of “hype”. For instance, the
year 2021 has seen the rise of the Metaverse vision which led to various speculations by key
players in various industries. However, a year later the metaverse vision is facing considerable
doubt and a whole new technology is at the center of everybody’s attention: Generative AI.
OpenAI has offered free access to its AI language model CHATGPT-3, which has caused
both excitement and apprehension regarding its potential impact on the business landscape
and specifically on information-based industries. Reactions were strong and immediate in the
public debate and amongst tech giants: Alphabet (Google) has, according to Forbes, declared
a code red over the threat of OpenAI and Elon Musk along with other experts published a
statement urging a halt to AI research for a period of 6 months. Half a year later, the debate is
still going strong, and all major consulting firms have released multiple articles and thought
leadership surrounding the potential and impact of generative AI on various industries as well
as the job market. As an information and expertise-based industry (Insert reference DD),
management consulting is likely to undergo significant changes to adapt to the disruptive
potential of this technology. This change can be inferred through several major steps taken by
major consultancies. BCG and Bain both announced their partnerships with OpenAI, with
Bain x OpenAI launching their first AI powered marketing campaign coined “Create your

own magic” for Coca-Cola. Beyond partnerships, substantial investments are expected from
major consultancies in the AI industry, Accenture announced in June its intention to invest 3
billion dollars in AI to accelerate client adoption while PwC announced a billion-dollar
investment in May.
In this exploratory study, we aim to understand how the traditional management consulting
business model is going to cope with the rise of generative AI, and what actions it should
address to thrive in a potentially disrupted environment. In order to understand how this
technology is likely to affect management consulting, it is essential to investigate
characteristics of this industry which allowed major players to thrive despite a century of
disruption and look more closely into the attributes of generative AI and its potential
disruptive power for the management consultancy industry.

I- LITERATURE REVIEW
1) MANAGEMENT CONSULTING
a. WHAT IS MANAGEMENT CONSULTING ?
Due to its heterogeneity and lack of regulation, the consulting industry has received little
academic attention (Srinivasan, 2014). Its permeability and ever shifting nature also explains
the reason why it is difficult to find a consensual definition of this discipline. Nonetheless, in
this paragraph, we are going to identify converging defining traits of the management
consulting industry in academic literature.
Greiner and Metzger (1983) stipulate that management consulting firms are contracted
(external to the organization) to provide clients with advisory services that span problem
identification, analysis of potential solutions and implementation. These advisory services are
meant to yield organizational improvement through their cutting-edge experience and/or
expertise of their consultants.
Other definitions along these lines are focus on the management consultant rather than their
employer, Fincham and Clark (2002) stated that consultants are perceived as “professional
helpers remedying the illness in client organi(z)ations”. In this sense, consultants provide their
client organizations with value, through contracted projects, by leveraging expertise that is not
easily available within their structure in order to help them respond more efficiently to their
business environment (Momani, 2013). Consequently, in the scholar definitions (Greiner and
Metzger, 1983; Fincham, Mohe, and Seidl, 2013), it is possible to identify recurring traits that
characterize management consulting services:
(a) External to the organization.
(b) Time-bound: as their service is aimed at addressing a specific need limited in time.
(c) Information & knowledge based: the value of a consultant to the client lies within their
experience and expertise, which can be transferred to the client’s business.
(d) Compensation: consultants charge fees for their professional services
In the upcoming section, we are going to discuss the origins and evolution of management
consulting as a discipline in order to better understand how today’s industry was shaped.

b. ORIGINS OF MANAGEMENT CONSULTING
- Origins at the turn of the 20th century:

Lopes da Costa & Antonio (2014) states that “management consultancy is one of the most
ancient activities in the world”. Nonetheless, as institutions, the first management consulting
firms were created at the turn of the 20th century with Arthur D. Little and Stone & Webster
(Canback, 1998). This creation was driven by the need of engineering advice, without the
commitment of a full-time engineer in the organization. The unique combination of business
and technical expertise resulted in consultants being contracted as “efficiency experts” on the
production process (Glückler & Armbrüster, 2003). This could be linked to the rise of
Scientific Management thinking (Taylorism)
- Maturity throughout the 20th century:

For most of the 20th century, the concept of consulting expanded and became a staple in
business. Several now established actors entered the market (Booz Allen Hamilton, Inc.,
McKinsey, BCG). The offering of these firms evolved into what was back then coined
“organizational and strategic consulting” (Canback,1998). Traditional management consulting
firms have also faced their first competitive challenges throughout the second half of the 20 th
century (Christensen et al.,2013). New competitive forces with non-traditional business
models have entered the market:
- New entrants such as the big-four accounting firms (EY, KPMG PwC & Deloitte)
started competing for market share.
- Traditional tech firms entered the market offering end-to-end forward integration
(IBM Services, EDS after acquiring Tata Consulting Services)
- Niche consulting firms which boast cutting-edge and specialized expertise
This led to management consulting firms to shift their service areas from generalist to
functional (Christensen et al., 2013)
Globalization was yet another substantial challenge for the industry incumbents as one of their
main differentiators was their deep local knowledge (Von Nordenflycht, 2010). This has
contributed to their shift from a local to a global network of consultants and experts
(Christensen et al., 2013).

c. SEGMENTATION IN THE CONSULTING INDUSTRY
In the highly competitive landscape of the management consulting industry, companies face
the imperative of strategically positioning themselves close to their industry rivals. This
strategic maneuvering offers a range of significant benefits, including the amplification of
their perceived legitimacy, the reduction of uncertainties, and the heightened potential for
knowledge spillovers within the competitive landscape. However, this deliberate alignment
with competitors inevitably presents challenges, as it limits the firms' ability to differentiate
themselves distinctly from their closest rivals, thereby intensifying the direct competition
among them (Srinivasan, 2014).
These trends have naturally led to a segmentation of the consultancy industry by types of
firms. Although key service area segmentation in literature may slightly vary depending on
the source,
The following segmentation suggested by consultancy.org presents many recurring features

within literature (e,g XERFI, 2022)
Figure 1- Consulting Industry segmentation - Source : consultancy.org
According to this segmentation, Management consulting is defined as the aggregate of

strategy, operations and human resources consulting. Although some similar segmentations
(XERFI, 2022) include financial advisory in the broader management consulting area. For this
thesis, we are going to focus willfully on the management consulting industry:

- Strategy consulting: Often regarded as the most high-end consulting firm, it targets
boardrooms and C-Suite level clients. The results and decisions of this type of
engagement often have significant impact on the organization (Product diversification,
inorganic growth, restructuring, etc…). A strong differentiator for this segment is the
short length of the engagement that excludes implementation.
- Operations consulting: Operations management consulting engagements enhance
business operations through valuable guidance and support during the implementation
and transformation projects across numerous operational aspects. Such engagements
include target operating model definition and transformation, change management
projects, management control and organizational change. The objective is to optimize
different components of the value chain, such as procurement, production,
distribution, and customer service. By doing so, they contribute to enhancing overall
performance and the competitive edge of the client's business.
- Human Resources consulting: Human resource consulting covers a variety of services
that involve providing guidance and support in managing an organization's HR
function. The diverse scope of HR consulting encompasses a large panel of activities
that address the optimization and transformation of an organization's workforce and
HR operations. Such engagements can revolve around human capital strategies,
creation and implementation of compensation and benefits frameworks and change
management components of large transformation programs. In some cases, HR
consultants may be involved in transforming the HR function itself, improving its
efficiency and effectiveness.
- Financial Advisory: provides consulting services rooted in a solid foundation of
financial analysis. This segment offers a diverse range of services covering a variety
of areas including transaction services, risk management, tax advisory, real estate
advisory, compliance, and litigation services, etc.
- At the core of all these services lies a fundamental emphasis on financial and
accounting expertise.
An article on management consulting from (XERFI, 2022) highlights that firms are positioned
across one or multiple service areas, they distinguish several types of firms:
- Strategy dominant firms: McKinsey, Bain & BCG
- Generalists: Kea & Partners, Sia Partners, Wavestone
- IT & Management consulting firms: Accenture, Capgemini Invent, DXC

- Big-Four (Audit & Consulting): PwC Advisory, EY Consulting, Deloitte, KPMG
Advisory
Although the previous categorization is useful to analyze the industry and types of services
offered, it remains somewhat artificial and analytical when compared to the reality of the
industry. Due to the unregulated and evolutive nature of the market, there is significant
overlap amongst the consulting industry actors when it comes to their service areas and
typology of engagement. A quote from Christensen et al. (2013) illustrates this limitation:
At traditional strategy-consulting firms, the share of work that is classic strategy is
now about 20%—down from 60% to 70% some 30 years ago.
– HBR, Christensen et al., Oct 2013
Arthur N.Turner (HBR Review, 1982) in his hierarchy of consulting purposes, had seemingly
identified the trend for overlaps early on. The author insists on the importance of
implementation support, which was not necessarily addressed at the time by top strategy firms
and which has become much more common nowadays.
d. ROLE OF THE CONSULTANT
Understanding the role of a consultant is important to grasp the motivation driving consulting
clients as well as the expected value from these services. There have been various references
to the role of a management consultant in academic literature. The review of a sizeable
portion of these sources allows us to identify converging roles that can be grouped in major
categories by decreasing order from most to least explicit/tangible.
CATEGO
RY ROLE DESCRIPTION IN LITERATURE REFERENCE
Consultants provide expertise and Schein (1988),
Expertise and problem solving
Expert knowledge to solve identified problems Clegg et al. (2004)

within an organization.
Consultants teach clients the process and Schein (1988),
Facilitator methodology to identify and solve Canato and
problems on their own. Giangreco (2011)
Consultants rephrase existing knowledge Armbrüster (2006),
Knowledge Broker and communicate it effectively, Canato and
facilitating organizational learning. Giangreco (2011)
Uncertainty Consultants provide reassurance and

Alleviator alleviate uncertainty for managers in Sturdy et al. (2013)
complex business environments.

Consultants support the organization by Schmidt et al.
Implementer
transformation support
Implementation and assembling and coordinating resources (2005)
for effective implementation.
Consultants are hired as temporary labor
Temporary Labor when the client organization lacks Alvesson (1993)
sufficient internal resources.
Consultants initiate and facilitate
Change Agent changes within organizations, Kakabadse et al.
encouraging the adoption of new (2006)
solutions and innovations.
Top Management Engagement and
Consultants add credibility to pre-made Ernst and Kieser

Legitimator decisions, enhancing their acceptance (2002)
and implementation.
Political Influence
Consultants may be perceived as

Scapegoat scapegoats when they are blamed for Sturdy (2011)
unfavorable decisions.
Consultants can be strategically used to Sturdy et al.
Political Weapon advance the personal interests of specific (2004), Baaij
managers within the organization. (2014)
Consultants act as impartial third parties,
Mediator facilitating settlements and mediating Fleischer (2010)
between conflicting parties.
The “political influence and engagement” value of the consultant are contingent to their more
primary roles of “problem solvers” which ensures the required level of legitimacy.
e. KEY RESOURCES IN A MANAGEMENT CONSULTING FIRM
Knowledge and know-how: As a knowledge-based industry, it goes without saying that

knowledge management capability is a key resource in management consulting firms
(Dunford, 2000). Knowledge is often divided into two forms: tacit and explicit. Nonaka and
Takeuchi's framework is widely recognized in knowledge management research. Tacit
knowledge is unspoken and intangible, while explicit knowledge is clearly stated, tangible,
and stored. Effective knowledge communication involves transforming it into action or
gathering new ideas. The interplay between tacit and explicit knowledge forms the
epistemological dimension. In the ontological dimension, knowledge is created by
individuals, and organizations require human involvement to generate internal knowledge.
Additionally, knowledge can be individual or organizational, with Nonaka and Takeuchi
highlighting personal knowledge made accessible and shared through a knowledge creation
process within organizations. This dynamic description of knowledge applies particularly well
to the management consulting industry where a management consultant needs to project

expertise while learning (Bougroin and Harvey, HBR 2018). As stated by Dunford (2000), a
top priority for consulting firms is effective knowledge management, including ensuring high-
quality information and promoting a culture of sharing. Reaching this objective requires a
specific mindset, incentivizing knowledge sharing, and utilizing knowledge management
systems efficiently. Additionally, the distinction between explicit and tacit knowledge poses
limitations on codification processes, highlighting the importance of holistic transfer methods
like practice, apprenticeship, and coaching.
Human Capital: is the primary resource for a management consulting firm. Although
consulting is one of the most coveted career options for business school graduates for a
variety of reasons (Kakabadse et al., 2006) such as an attractive pay, a steep learning curve,
social prestige and attractive exit opportunities, recruiting and retaining qualified talent is a
challenge due to the extremely selective nature of the consulting hiring process and the high
turnover rates which can be explained by the intense work culture. In their last report on the
industry, XERFI (2022) highlighted talent attraction and retention as one of the most crucial
challenges for the year for the management consulting industry in France.
Brand value and reputation: As Canbäck (1999) and Nordenflycht (2010) state, the
market value of many companies is closely linked to intangible elements such as brand image
and “social proof” such as educational background and posture. These factors serve as
substitutes for tangible outcomes, providing incumbents with an advantage. Brand and
reputation are fundamental factors in the management consulting industry, serving as vital
assets. In the face of growing competition, consulting firms must distinguish themselves to
attract clients. A robust brand and reputation act as compelling indicators of a firm's expertise,
credibility, and reliability (Amonini et al., 2010). Clients are more inclined to engage with
consulting firms that possess an established and respected brand, as it assures them of quality
and value. Furthermore, a positive brand image can foster client loyalty and referrals,
bolstering the firm's market position (Furusten, 2013). Moreover, a strong brand enables
consulting firms to command premium fees and draw in top-tier talent, thereby fostering
sustainable business growth. Hence, it is imperative for management consulting firms to make
strategic investments in constructing and nurturing a reputable brand to thrive in the ever-
evolving marketplace.

Network: In management consulting, creating and nurturing client connections holds
utmost significance. These relationships serve as invaluable assets for consulting firms,
enabling them to secure recurrent business and generate a consistent revenue flow (von
Nordenflycht, 2010). Long-term clients not only establish a sturdy foundation for the firm's
financial performance but also act as a testament to the firm's ability to deliver results and
surpass client expectations (Haverila et al., 2011). Furthermore, well-established client
relationships can yield referrals and endorsements, expanding the firm's client base and
extending its market influence. By fostering robust bonds with clients over time, consulting
firms acquire a profound understanding of their clients' needs, challenges, and industry
dynamics, empowering them to offer tailored and impactful solutions (Amonini et al., 2010).
These enduring relationships also foster trust, collaboration, and transparent communication,
facilitating seamless project execution and ensuring client satisfaction. Therefore, the
establishment and nurturing of a network of long-standing client relationships remain
imperative for the long-term prosperity and sustainability of management consulting firms.
f. THE CLIENT-CONSULTANT RELATIONSHIP
In management consulting, the client-consultant relationship is a dynamic and multifaceted

interaction that extends beyond a simple transactional exchange (Appelbaum & Steed, 2005).
While it can be categorized as a principal-agent relationship, it is crucial to recognize that the
client's role is not passive or submissive; rather, it is a bidirectional and reciprocal
engagement (Glückler & Armbrüster, 2003). This relationship encompasses both professional
and psychological dimensions, exerting influence on the dynamics between consultants and
their clients (Kakabadse et al., 2006). The analysis of this complex relationship incorporates
various theoretical perspectives, including role theory, agency theory, and social network
theory, illuminating its intricate nature and embedded power dynamics (Mohe & Seidl, 2011).
Furthermore, it is important to acknowledge that the interests of individual actors within client
and consultant organizations may diverge, leading to a heightened focus on the manager-
consultant relationship as a pivotal factor in consulting projects (Macdonald, 2006). By
considering the role of hiring managers as key decision-makers, a comprehensive
understanding of the impact of consultants on specific individuals and organizations emerges.
This holistic approach aligns with the emphasis placed by top-tier management consultancies
on supporting and collaborating with individual managers within client organizations
(Bäcklund & Werr, 2008). Thus, the client-consultant relationship in management consulting

represents a nuanced and intricate interaction, encompassing multiple dimensions and
dynamics (Kitay & Wright, 2004; Fincham, 1999).
2) GENERATIVE AI
a. WHAT IS AI?
Modern AI is an interdisciplinary field that replicates or surpasses human cognitive abilities

through advanced algorithms and techniques. It encompasses machine learning, deep learning,
natural language processing (NLP), and computer vision (Russell & Norvig, 2016). Machine
learning enables computers to learn from data and make predictions (Russell & Norvig,
2016). Deep learning, using artificial neural networks with multiple layers, excels in complex
data processing (Goodfellow et al., 2016). NLP focuses on human language understanding
and generation (Jurafsky & Martin, 2019). Computer vision enables machines to interpret
visual information (Szeliski, 2010).
AI has transformed healthcare, finance, and entertainment (Topol, 2019). It aids in medical
diagnosis, recommendation systems, and autonomous vehicles (Topol, 2019). Ethical
challenges like bias, fairness, and interpretability must be addressed for responsible AI
(Russell & Norvig, 2016). In conclusion, modern AI offers tremendous opportunities for
innovation and societal impact (Russell & Norvig, 2016).
AI can be traced back to the mid-20th century when Alan Turing proposed the Turing Test, a
machine exhibiting intelligent behavior (Turing, 1950). The Dartmouth Workshop in 1956
marked the formal beginning of AI research, with notable participants like John McCarthy,
Marvin Minsky, and Nathaniel Rochester (McCarthy et al., 1956).
During the 1950s and 1960s, researchers pursued symbolic AI, creating programs for
reasoning and problem-solving using symbolic representations (Newell & Simon, 1958).
Progress in symbolic AI included computer programs playing games like chess and checkers
(Shannon, 1950).
Expert systems emerged in the 1970s and 1980s, using knowledge-based approaches to solve
complex problems in specific domains (Feigenbaum & McCorduck, 1983). These systems
aimed to capture human expertise for intelligent decision-making.

AI advancements between 2000 and 2020 witnessed significant progress in machine learning,
deep learning, and natural language processing (NLP) (Russell & Norvig, 2010). Researchers
focused on statistical and probabilistic approaches, enabling machines to learn from data and
make predictions (Goodfellow et al., 2016). Neural networks and deep learning experienced a
resurgence with the availability of large datasets and increased computational power (Szeliski,
2010). Reinforcement learning gained attention for teaching agents optimal behavior through
trial and error interactions (Sutton & Barto, 2018).
Notable achievements in NLP included significant strides in sentiment analysis, machine

translation, and virtual assistants (McCarthy et al., 2020). Additionally, large-scale models
and pretraining techniques like GPT, BERT, and Transformer models showed breakthrough
performance in language-related tasks (OpenAI, 2020).
These advancements collectively laid the foundation for AI-powered systems and applications
that are prevalent today.
b. WHAT IS MACHINE/DEEP LEARNING?
Machine learning, a branch of artificial intelligence (AI), enables computers to learn from
data and make predictions without explicit programming (Mitchell, 1997). It has made
significant advancements in various domains, such as natural language processing and
computer vision (Goodfellow et al., 2016). Deep learning, a subset of machine learning,
utilizes neural networks with multiple layers to automatically learn complex features from
raw data (LeCun et al., 2015). Deep learning tends to require larger volumes of data, but also
less human intervention.

Figure 2 - AI vs ML vs DL - Source : Medium.com
c. AI RELATED RISKS & CHALLENGES
In their article “Getting to know-and manage-your biggest AI risks”, Kevin Buehler et al.
(2021) identified and categorized 6 types of risks associated with the use of AI in
organizations:
Privacy risk: Privacy risks associated with the utilization of artificial intelligence (AI)
have become a significant concern in contemporary society (Smith, 2022). As AI systems
increasingly handle vast amounts of personal data, there is a pressing need to safeguard
individuals' privacy rights and prevent potential breaches. These risks encompass various
aspects, including data collection, storage, sharing, and processing. Improper handling of
sensitive information can lead to unauthorized access, identity theft, or discriminatory
profiling. To address privacy risks, researchers have proposed numerous approaches such as
privacy-preserving AI techniques, encryption methods, and data anonymization. Additionally,
legal frameworks like the European Union's General Data Protection Regulation (GDPR)
(EU, 2016) provide a foundation for protecting individuals' privacy. By incorporating
privacy-enhancing mechanisms and adhering to robust regulations, AI developers and
organizations can ensure the responsible and ethical use of AI while upholding privacy rights.
Security risk: Security in the context of artificial intelligence (AI) presents a

multifaceted landscape of risks and challenges. Emerging AI models introduce complex
vulnerabilities that can expose organizations to various security threats. Notably,
vulnerabilities like model extraction and data poisoning have gained prominence, raising

concerns about the effectiveness of traditional security approaches. Model extraction
techniques allow adversaries to replicate or extract valuable AI models, potentially
compromising proprietary information or intellectual property. Data poisoning attacks involve
the injection of malicious or misleading data during the training phase, leading to biased or
manipulated AI outputs. Addressing these security risks requires a comprehensive approach
that combines technical safeguards, robust encryption methods, and continuous monitoring.
Additionally, adherence to existing legal frameworks becomes essential, as regulatory
guidelines often prescribe minimum security standards that organizations must meet. By
proactively recognizing and mitigating these security risks, stakeholders can foster a safer and
more trustworthy AI ecosystem.
Bias: Ensuring fairness and mitigating bias in AI models is a critical concern for
organizations deploying artificial intelligence. Biases can inadvertently permeate AI models,
either through the encoding process or by inheriting biases present in the training data
(Buolamwini & Gebru, 2018). Such biases can have detrimental effects on specific classes or
groups, leading to fairness risks and potential legal liabilities for companies. Detecting and
addressing biases in AI systems requires robust data preprocessing techniques, diverse and
representative training datasets (Caliskan, Bryson, & Narayanan, 2017), and ongoing
monitoring and evaluation. Employing techniques like debiasing algorithms and fairness
metrics can aid in reducing bias and promoting equitable outcomes. Organizations must also
prioritize transparency and accountability in their AI development processes to establish trust
and mitigate the potential impacts of bias. By proactively addressing fairness risks,
organizations can foster inclusive and responsible AI deployments.
Transparency and explainability: Promoting transparency and scrutability in AI

systems is of paramount importance in addressing concerns pertaining to accountability, legal
compliance, and ethical responsibilities (Mittelstadt et al., 2016). The absence of transparency
during the development process, particularly in relation to the amalgamation of data sets, can
engender a host of challenges. Failure to elucidate the mechanisms by which a model arrives
at specific outcomes can impede the ability to respond to individuals' inquiries regarding their
data usage, potentially leading to legal entanglements (Goodman & Flaxman, 2017). It is
imperative for organizations to possess a comprehensive understanding of the data flow
within their AI models and be equipped to furnish explanations as and when required.
Employing techniques such as interpretability and explainable AI (XAI) can augment system

transparency by providing valuable insights into the decision-making process. Through the
adoption of scrutability practices, organizations can cultivate trust, mitigate legal risks, and
fulfill their obligations in the responsible utilization of AI.
Safety and performance: AI applications necessitate meticulous implementation and

rigorous testing to avert performance issues that may violate contractual guarantees and, in
severe cases, jeopardize personal safety. Let us consider a hypothetical situation where an AI
model is deployed to ensure timely machinery updates in manufacturing or mining operations.
Failure of this model to fulfill its intended purpose could potentially amount to contractual
negligence and lead to harm to workers, thereby entailing legal ramifications (Burrell, 2016).
To address these concerns, the concept of scrutability in AI systems assumes paramount
importance. Scrutability refers to the capacity to examine and comprehend the decision-
making processes underlying AI models (Mittelstadt et al., 2019). Organizations can enhance
scrutability by embracing measures such as interpretability techniques and explainable AI
methods, enabling stakeholders to gain insights into the inner workings and justifications
behind AI-generated outcomes (Lipton, 2016). These endeavors foster trust, instill
accountability, and mitigate legal risks linked to the deployment of AI.
Third-party risks: In the process of building AI models, it is common for

organizations to collaborate with third-party entities. These external partners play a crucial
role in various aspects such as data collection, model selection, and deployment
environments. To ensure a robust and secure AI system, organizations must thoroughly assess
and understand the risk-mitigation strategies and governance standards employed by these
third parties. Additionally, organizations should conduct independent testing and audits of
critical inputs to verify their reliability and integrity. By proactively addressing third-party
risks in AI, organizations can enhance the overall trustworthiness and compliance of their
systems.
d. WHAT MAKES AI GENERATIVE?
According to BCG’s description, generative AI has emerged as a rapidly advancing field that
encompasses a diverse array of algorithms and techniques aimed at producing new authentic
content. These algorithms are designed to learn from extensive sets of training data and
generate outputs that demonstrate creativity and realism. At the core of generative AI are
foundation models, which serve as the backbone for these algorithms. These models undergo

training using vast amounts of unlabeled data in a self-supervised manner, enabling them to
discern the underlying patterns and structures inherent in the data. By gaining a deep
understanding of the data distribution, foundation models become equipped to generate
content of high quality that aligns with the learned patterns.
2010 | Advanced translation of Natural Language: Researchers notice that language
models fed with an extensive amount of text data / translations perform much significantly
better than algorithmic models programmed to obey grammatical rules.
2014 | Grasping meaning: Models started to assign a meaning to words based on the context
of the conversation. The same word would be described differently depending on its context.
2016 – 2022 | Creation of LLMs (Large Language Models): Although capex intensive due
to the amount of ingested data and training required, the creation of language models proved
to be a strong foundation that once achieved, required little investment and training to reach
customize and adapt to specific use.
2022 | Conversational language models: The specificity of conversational language models
is their ability to interact with a user using text. The arrival of ChatGPT-3 as a solution open
to the public made it widely popular.
What stands out with generative AI, compared to other technologies, is the adoption speed
Which can be explained by its open-source availability as well as its ease of use.
Figure 3- Time to reach 1M users per technology - Source: STATISTA

e. TYPES OF GENERATIVE AI MODELS
As defined above, generative AI has the potential to create new unstructured content
following instructions. We have covered LLMs and their ability to generate text output using
text input. However, the neural networks that generate those texts have the potential to
generate other forms of unstructured context. McKinsey has compiled the current technology
panorama of generative AI in a matrix crossing editors with the type of generative AI (Text vs
Image vs Audio etc.)
Figure 4 - Technology stack panorama - Source: McKinsey website
f. EXPECTED IMPACT OF GENERATIVE AI ON BUSINESS
Being a fairly recent advancement (November 2022), there is little consistency in publications
about the impact of IA on the business landscape. Most of the work in this literature review is
future oriented and exploratory. However, in the short lifespan of generative AI, major key

opinion leaders as well as eminent consulting firms have expressed their thought leadership
about the potential impact of generative AI on business. On their webpage about generative
AI, BCG describes various possible use cases for the use of generative AI. They state that
Generative AI text models possess the remarkable capacity to generate diverse content across
multiple categories based on natural language instructions. This encompasses the creation of
job descriptions, conversational SMS support, marketing copy variations, text summarization
for social listening, internal document search, document condensation, dataset analysis,
consumer sentiment tracking, software writing, code testing andidentification in code. The
scope of generative AI applications in the business realm is only at its first stages, and as
technological progress continues, an entirely new spectrum of applications is expected to
unfold. Businesses stand to gain advantages from generative AI in terms of augmenting labor
productivity, tailoring personalized customer experiences, expediting research and
development via generative design, and venturing into novel business models. Numerous
companies have already embraced generative AI initiatives, harnessing its potential to secure
a competitive edge.
In this paragraph, we are going to structure and highlight relevant publications on this expect
impact.
Impact by industry: In its report (Global economics: The potentially large effects of
artificial intelligence, 2023), Goldman Sachs has published the following data on the
percentage of workforce exposed to generative AI automation by industry. It estimates that
28% of the workforce across the US and Europe is exposed to automation. With the industries
ranked in the following descending order:
- Office and administrative support – 46%

- Legal – 44%
- Architecture and engineering – 37%
- Life, Physical and Social sciences – 36%
- Business and Financial Operations – 35%
- Community and Social Service – 33%
- Management – 32%
- Sales Related – 31%
- Computer and Mathematical – 29%

- Farming, fishing and forestry – 28%
- Protective Services – 28%
- Healthcare practitioners and technical – 28%
- Educational Instruction and Library – 27%
- Healthcare Support – 26%
- Arts, Design, Entertainment, Sports, And Media – 26%
- Personal Care and Service – 19%
- Food Preparation and Serving Related – 12%
- Transportation and Material Moving – 11%
- Production – 9%
- Construction and Extraction – 6%
- Installation, Maintenance, and Repair – 4%
- Building, grounds cleaning and maintenance – 1%
What most stands out in this classification is the fact that the most impacted industries are
expected to be mostly white-collar industries with Legal and Business and Finance being in
the top 5 while more manual / blue collar work is least impacted with Transportation,
Production and Maintenance being in the bottom 5.
Impact by qualification: In their white paper titled (McKinsey – Economic potential

of generative AI, 2023), McKinsey provides an actualized version of their job automation by
level of qualification accounting for the arrival of generative AI. While it is predictable that
all levels of qualification present a higher risk of job automation, it appears that Generative AI
increases this risk significantly for theeducated portion of the workforce. For instance, it is
estimated that generative AI increases the risk of automation for a professional without a
degree by only 9% while the risk premium is 24% for a professional with a master’s degree,
PhD or higher.
3) LET’S TALK ABOUT DISRUPTION
a. WHAT IS DISRUPTION ?
Disruption, as described by scholars, encompasses various dimensions and viewpoints.

Christensen et al. (2015) define it as a process where smaller companies with limited
resources successfully challenge established incumbents in the industry. Yu and Hang (2010)

emphasize its potential to expand markets and introduce new functionalities that can disrupt
existing market linkages. Zuckerman (2016) focuses on the theory of the unexpectedly
bridgeable chasm, whereby niche market players transition to mass market players by
adapting to evolving customer needs. Nagy et al. (2016) emphasize disruptive innovation as
an agent of change that transforms performance metrics, consumer expectations, technical
standards, and ownership structures within a market. For instance, the emergence of ride-
sharing platforms like Uber and Lyft revolutionized the transportation industry by offering an
alternative to traditional taxi services. These disruptive platforms leveraged technology,
convenience, and novel business models to reshape the market dynamics and consumer
behaviors. Considering these perspectives, disruption can be understood as a transformative
phenomenon that challenges incumbents, reshapes market dynamics, and brings about
fundamental shifts in industries through innovative approaches and changing customer
demands.
b. CHRISTENSEN’S DISRUPTIVE INNOVATION THEORY
First coined by Christensen (1995), and more widely formalized by Christensen et al. (2015)
in HBR, the theory of disruptive innovation has gained significant recognition as a valuable
framework for understanding innovation-driven growth. At its core, disruptive innovation
refers to the process by which smaller companies challenge established incumbents by
targeting overlooked market segments with more suitable offerings at lower prices.
Incumbents often overlook these segments as they focus on their most profitable customers,
enabling entrants to gain a foothold and eventually disrupt the market when mainstream
customers embrace their offerings.
This theory evolved from being a descriptive framework to a more predictive one, in which
the incumbent is displaced to a high-end market by sustaining incremental improvements in
their services or products as the disruptor enters from-below in terms of product performance
serving a low-end market while improving product performance until they capture the
mainstream market.

Figure 5 - Illustration of Christensen's disruptive innovation theory
In Christensen's view of disruptive innovation, the concept is characterized by specific

limitations that define what disruptive innovation is and what it is not. According to the
theory there are 4 major characteristics that essentially define disruptive innovation:
It's a process: Disruption begins with small-scale experiments, focusing on refining the
business model rather than just the product. Over time, disrupters erode incumbents' market
share and profitability by targeting overlooked market segments.
Business models are often very different from incumbents: Disruptors often build
business models that are distinct from incumbents. They introduce new approaches, such as
standardized protocols in the healthcare industry, to diagnose and treat specific disorders.
Some succeed and some fail: Not all disruptive innovations succeed. Success is not
inherent in the definition of disruption, and not every triumphant newcomer follows a
disruptive path. Failures serve as boundaries for the theory's application, and winning in the
foothold market requires playing the odds and avoiding direct competition with better-
resourced incumbents.
"Disrupt or be disrupted" is misleading: Incumbents should respond to disruption

without overreacting. Instead of dismantling profitable businesses, they should invest in
sustaining innovations and establish separate divisions to capitalize on growth opportunities.

Managing distinct operations and strengthening relationships with core customers are
essential strategies.
While it allows for a more rigorous definition of disruption, the limitative nature of the theory
excludes many interesting use cases that offer a broader understanding of the notion.
c. DISRUPTION FROM ABOVE, THE BLIND SPOT IN

CHRISTENSEN’S THEORY
In opposition to Christensen’s description of a disruptor that first caters to the low-end

market. Van Orden et al. (2012) describe a new form of disruption. High-end disruption
occurs when a new product strategically targets and appeals to customers in the upper market
segment with the highest willingness to pay, gradually expanding its reach to lower market
segments. Vazquez (2016) defines high-end disruption as the introduction of a superior
product or platform, exemplified by the Tesla Model S, that demands substantial upfront
investment and directly challenges established incumbents right from the start, without
initially establishing a foothold as observed in low-end disruption. Illustratively, Gans (2016)
suggests that had Apples's iphone entered the market with a higher price and focused on the
high-end market, incumbents would have been better positioned to defend against the
disruption. The fact that the Iphone managed to make the product more affordable and
successfully transitioned from the high-end to the mainstream market, incumbents struggled
to respond.
To deepen the understanding behind this customer behavior, Christensen et al. (2015) seems
to make 2 major assumptions that have been challenged repeatedly in recent literature,
particularly for the B2C market. The first assumption is that the customer is completely
rational in their purchasing decision, they wouldn't buy a higher price product with
"superfluous" features, the second reason is that all the dimensions of a product/service
performance are tangible and measurable. With the iPhone example, one might argue that the
ease of use and brand value cannot be accounted for in Christensen's disruptive innovation
framework.
d. BIG BANG DISRUPTION, A PARADIGM SHIFT

According to Downes and Nunes (2013), the accepted wisdom in the traditional playbook for
disruptive innovation revolves around the assumption that disrupters start with a lower-priced,
inferior alternative, gradually chipping away at the least profitable segments of the market,
which allows the incumbent businesses time to develop their own next-generation products. In
their eponymous HBR article, they discuss the emergence of big-bang disrupters which
challenge this accepted wisdom by entering the market unexpectedly, without following
conventional strategic paths or normal patterns of market adoption. These disrupters swiftly
attract customers from all segments, creating or destroying markets overnight, and making it
difficult for incumbents to fight against such disruptive forces.
Big-bang disruptions represent a departure from conventional innovations, characterized by
their significant differentiation in terms of magnitude and nature. These disruptions not only
offer cost advantages but also exhibit higher levels of inventiveness and seamless integration
with other offerings in the market. The rapid acceptance of emerging products and services,
facilitated by the abundance of precise market information, has caught incumbents across
diverse sectors off guard, leaving them grappling to adapt. Big-bang disrupters emerge
unexpectedly, amalgamating seemingly disparate technologies to deliver a substantially
superior value proposition, often drawing customers toward entirely novel business models.
ig-bang disrupters bring a unique set of features that set them apart from traditional
innovations. Their unencumbered development allows for rapid experimentation and the use
of existing components to create groundbreaking products. Unconstrained growth replaces the
traditional product life cycle with a linear adoption curve, enabling simultaneous marketing to
all customer segments and rapid expansion.
Big-bang disrupters defy the traditional notions of competitive strategy, disregarding the
generic approach outlined by Porter in 1980, which emphasizes cost leadership, focus, or
differentiation. Instead, they possess the remarkable ability to compete on multiple fronts
right from the start. By harnessing the advancements in technology and leveraging global
scalability, these disrupters excel in all value disciplines simultaneously. Their undisciplined
yet highly effective approach challenges the conventional norms and propels them to redefine
the rules of the game.
e. DISRUPTIVE FORCES IN THE MANAGEMENT CONSULTING

INDUSTRY
In this paragraph, literature provides us with evidence supporting that technology, through
digitization, and social change, through the gig economy are 2 important drivers of disruption:

Digital transformation: The management consulting industry is undergoing a
significant disruption driven by the forces of digitization. Reddy and Reinartz (2017) and
Schwertner (2017) argue that the digital transformation, characterized by the proliferation of
technologies such as cloud computing, big data and analytics, mobility, e-commerce, social
media, and the Internet of Things, has profoundly impacted all aspects of the economy. This
transformation has not only brought changes to economic systems and commercial players but
has also influenced the lives of individuals and society as a whole. In the context of the
management consulting industry, digitization has led to the emergence of new business
models, processes, and systems. Schwertner (2017) defines digital business transformation as
the use of technology to create innovative solutions, resulting in increased revenue, enhanced
efficiency, and competitive advantage. Consequently, consulting firms are compelled to adapt
and incorporate digital technologies across their entire operations. The digital revolution has
accelerated the pace of change, shortened planning times, and necessitated continuous
adaptation. The democratization of data and the rise of specialized digital providers have
challenged the traditional consulting model (Christensen et al., 2013). It is evident that
digitization is a driving force of disruption in the management consulting industry, reshaping
the way consulting firms operate, interact, and deliver value to clients, as well as demanding
strategic adaptation and leadership (Reddy & Reinartz, 2017; Schwertner, 2017).
The gig-economy: The gig economy is rapidly expanding and has emerged as a
potential factor of disruption in the business landscape. According to Cambridge University,
the gig economy is characterized by temporary jobs and independent work arrangements
(Cambridge Dictionary, n.d.). The rise of digitized platforms has fueled the popularity of this
new way of working, allowing individuals to have greater control over when, where, and how
they work (Kässi and Lehdonvirta, 2018). Companies like Uber and Airbnb have become
synonymous with gig work, but the gig economy is not limited to these examples (Lau, 2020).
In fact, highly experienced professionals, including management consultants, are increasingly
being hired as gig workers to provide specialized expertise and advice (Lau, 2022). The gig
economy offers flexibility and freedom for workers, which has become highly valued in
today's business landscape (Tadros, 2021). COVID-19 further accelerated the importance of
remote work, making it possible for jobs to be performed regardless of physical location
(McKinsey, 2020). However, it is important to note that the gig economy also presents
challenges, such as limited customer base and potential restrictions imposed by on-demand

platforms (Donovan, 2016). As the gig economy continues to grow and reshape work
dynamics, its impact on industries like management consulting cannot be ignored.
4) BUSINESS MODELS IN MANAGEMENT CONSULTING
a. WHAT IS A BUSINESS MODEL?
Academic literature provides several definitions and frameworks to describe what a business
model is. At its core, a business model covers three main areas structured around the notion of
value: Creating, proposing and capturing value (European Journal of Innovation Management,
March 2021). It serves as a structural framework that outlines how an organization operates,
taking on various interpretations. Some view it as a cognitive and linguistic schema,
resembling a narrative that describes how the firm functions (Magretta, 2002; Casadesus-
Masanell and Ricart, 2010). On the other hand, some consider Business models as formal
conceptual representations, explicitly documented in mathematical models or visual
representations (Teece, 2010; Massa et al., 2017). In this context, we can take interest in the
interpretation that views Business models as real attributes (Casadesus-Masanell and Ricart,
2010). This view comprises an array of resources and activities that are leveraged with or
without partners (Zott and Amit, 2010) to deliver value to the client. Therefore, the business
model concept comprises the solutions offered by the firm, the activities and processes
employed to deliver the promised value, and the underlying earning logic that covers costs
and generates profits (Bouncken and Aslam, 2019; Clauss, 2017).
The elements of this definition are fairly similar to the visual representation by (Osterwalder
& Pigneur, 2010) in their now famous business model canvas.
Otswalder &
Description
Pigneur, 2010
The unique service or product offered by the company and how it
Value Proposition delivers value. It encompasses performance, design, brand, price,
accessibility, and usability.
The essential tasks required to achieve and deliver the value
Key Activities proposition. They encompass manufacturing, sales, advertising,
VALUE
marketing, and any activities aimed at generating profits.

Key Resources The fundamental assets and resources necessary for the company's
operations and sustainability. These encompass all the elements
required to keep the company functioning smoothly.

CREATIO This involves establishing buyer-supplier relationships, strategic
Key Partners alliances, and other collaborations that mitigate risks and allow the
company to focus on its core activities. It encompasses partnerships
with competitors/non-competitors.
The grouping of customers with similar needs, behaviors, or
Customer Segment characteristics. Different types of segments include mass market,
VALUE DELIVERY
niche market, segmented, diversified, or multi-sided platforms.

The means through which the company reaches and delivers the value
Channels proposition to its customer segments. These channels should be
efficient and cost-effective. They can be the company's own channels
or partnerships with other entities.
Includes acquiring new customers, retaining existing customers, and
Customer Relations growing revenue from existing customers. It focuses on how the
company manages customer relationships throughout their lifecycle.
The financial model of the company, including how it charges for its
Cost Structure products or services. It encompasses the overall monetary structure
CAPTURE
VALUE
and pricing strategies.

How the company generates income, including the inflow of money
from customers and customer segments. It refers to the various
Revenue Streams
revenue sources that contribute to the company's financial
sustainability.
As one can see in the table compiled above, the business model canvas is transposable to the
European journal of management and innovation’s description of a value creation, value
delivery and value capture. In literature, all aspects of the business model are not always
treated equally in terms of depth. We will focus on the descriptions provided in the following
chapters of this thesis.
b. TRADITIONAL BUSINESS MODELS IN MANAGEMENT

CONSULTING
In management consulting, Christensen et al. (2013) in his HBR article has identified 3
traditional business models for management consulting and highlighted the main differences:
Solution Shop: Which aims to investigate and solve an issue with an undefined perimeter.
The main value driver is the consultant’s judgement process is not repeatable. This type of
business model aligns well with strategy dominant firms and the fees tend to be high.
Value-Added Process: The scope of the engagement is defined, and the intervention of
the consulting firm usually follows a repeatable process. This aligns well generalist type of
firms, and the fees are paid for a specific output.
Facilitated Network: which is essentially a network that enables product and service
transactions. Fees are usually paid to the network by the client.

In an industry where the revenue model is essentially billable hours/days, a key aspect of
business models in management consulting firms is the leverage model. Maister (2004)
explains that consulting firms “may be viewed as the modern embodiment of medieval
craftsman’s shop[s], with its apprentices, journeymen and master craftsmen”, he argues that
every consulting project has its own mix of the three kinds which he coins “finders, minders
and grinders”. Finders, which are generally partners and principals, are in charge of bringing
business and scoping it. Minders (managers), on the other hand, manage the consulting
engagement and the case team to ensure work that the deliverables are satisfactory in terms of
quality and timing. At last, the grinders (analysts and junior consultants) perform low-level
tasks such formalization and data crunching. Although, this vision is simplistic, the mix of the
three kinds defines the leverage structure. This structure is key for partners (shareholders) as
the difference between the costs and the billable time for grinders is substantial, it allows
them to project the experience and expertise of their most senior staff at a large scale with
lower costs.
c. NEW BUSINESS MODELS IN CONSULTING
Christensen et al. (2013) identifies a variety of trends indicating disruption in the consulting
industry, he argues that the management consulting business model has remained virtually
untouched ever since its creation at the turn of the 20 th century. Christensen suggests that the
opacity of the value creation process as well as the agility of major players in the industry are
the reasons why the industry has been spared by disruption. However he identified back in
2013 trends that are gaining momentum and affecting the consulting industry:
Internal strategy groups in the client’s organization: By drawing a comparison with

law firms and the creation of legal corporate division within large organizations. Christensen
et al. (2013) suggests that historic clients are hiring former consultants and business school
graduates to create internal strategy divisions within their organization. This trend turned out
to be true specifically in the banking industry in France, where BNP PARIBAS, CREDIT
AGRICOLE and SOCIETE GENERALE created their internal “strategy firms” to reduce
their outsourcing expenses. These units were created by hiring ex consultants from top
strategy firms.
Service modularization: With the reduction in information asymmetry, clients are prone
to asking specific services from a consulting firm and understanding the funnel and analyses

required to deliver the service. This strongly affects the solution shop model as the clients
tend to be much more aware of both the required work to reach the desired deliverables and
the associated costs.
Competition from tech giants: As a knowledge-based industry, the digitization of
business opened the door for a new kind of competitors. Data-driven companies, through an
“asset-based” approach of consulting, formalize the knowledge, expertise, methodologies and
frameworks into software solutions that can provide data driven insights to the clients much
faster than traditional consulting firms. Incumbents such as McKinsey or BCG have
respectively created their software powered solutions for consulting.
Availability of qualified talent on demand: With large alumni networks, the job market
is filled with ex-consultants from the most prestigious management consulting firms capable
of delivering a similar value proposition on demand and for a portion of an established
management consulting firm’s price
Putting these factors in perspective with the French market, we have identified 3 emerging
business models that align with these predictions.
Figure 6 - Illustration of 3 new types of consulting BMs
5) CONCLUDING THE LITERATURE REVIEW
In conclusion, this comprehensive literature review provides valuable insights into the
fundamental characteristics and dynamics of the management consulting industry as well as
the emerging potential of generative AI within the business landscape. While the existing
literature offers limited direct connections between generative AI and management
consulting, the examination of both fields offers a unique opportunity to explore the resilience
of consulting business models amidst technological and societal disruptions, as well as the
implications of generative AI for the future of consulting.

The findings highlight the adaptability and enduring nature of management consulting
business models. Despite the ever-evolving technological landscape and competition from
new entrants, consulting firms have showcased their agility by continually refining their
approaches, fostering nurturing networks, and leveraging their intangible assets. This
adaptability positions the consulting industry favorably to navigate future disruptions,
including those potentially introduced by generative AI.
On the other hand, generative AI holds significant transformative potential that warrants
attention. The reviewed literature emphasizes the need for further exploration into how
generative AI might disrupt and reshape the business landscape. The easy access and use of
LLMs has the potential to commoditize data analysis, deliverable formalization, and the
production of personalized solutions showcasing a capacity to redefine the consulting
landscape. It is imperative to understand how any industry can effectively leverage generative
AI to redefine its value proposition, identity and “raison d’être”.
As the consulting industry explores the implications of generative AI, it becomes evident that
a thoughtful approach is crucial. The adoption of generative AI raises essential questions
regarding the evolving role and identity of consultants in delivering value to clients and
harnessing AI technologies to optimize solution efficiency and customization.
This research offers a valuable opportunity to further explore the resilience of consulting
business models in the face of disruptions and the potential impact of generative AI on the
future of consulting. By embracing technological advancements, responsibly leveraging
generative AI, and fostering a culture of innovation, management consulting firms can
position themselves at the forefront of industry transformation, consistently delivering
exceptional value to clients within a rapidly evolving business environment. Future research
should delve deeper into the practical implications of generative AI in management
consulting, with a specific focus on strategic decision-making, successful integration, ethical
considerations, and the evolving role of consultants in an AI-driven era.
II – RESEARCH METHODOLOGY
1) INTRODUCTION

To investigate the potential impact of AI on management consulting business models, a
research methodology that fosters exploration will be employed. Given the relatively limited
existing research in this area, an exploratory approach is deemed most suitable to gain insights
into a relatively recent subject. The primary objective of this study is to familiarize oneself
with new concepts and phenomena, consequently paving the way for more focused and
refined future research inquiries (Dufour C., n.d.).
2) RESEARCH APPROACH
In line with this exploration, quantitative and qualitative data will be collected through one-
on-one semi-structured interviews. This method facilitates a direct correlation between the
theoretical concepts outlined in the preceding chapters and the practical realities observed
within consulting firms (Aubin-Auger I. & al., 2008). Notably, these interviews will include
not only factual information but also subjective opinions from the participants, underscoring
the need for careful analysis and interpretation (Jacquemin A., 2019; Aubin-Auger I. & al.,
2008). The richness of qualitative research enables a more nuanced understanding of the
impact of research questions, while acknowledging potential bias in the responses provided by
the interviewees.
The qualitative nature of this research methodology allows for flexibility and openness to
unexpected findings (Jacquemin A., 2019). The interview data will be meticulously examined,
seeking emergent themes and patterns that contribute to a comprehensive understanding of
how AI influences consulting firms. This analytical process necessitates continuous
interpretation and an open-mindedness towards unforeseen insights that may arise.
These interviews will inform the practical analysis conducted in this study. By delving into
the collected information, a deeper appreciation of the practical implications of AI in the
context of consulting firms will be garnered. Through qualitative exploration, the diverse
perspectives and experiences of the participants will be considered, allowing for a holistic
exploration of the thesis subject.
3) RESEARCH HYPOTHESES & QUESTIONS

We use a hypothesis-driven approach which will be confronted to the thought leadership of
our interviewees in the form of both quantitative and qualitative questions.
Based on our literature review, we formulated three main hypotheses that we aim to test
through our experimental process.
H1 – The mainstream access to generative AI technology will have a significant

impact on the business model of management consultancies.
H2 – The successful integration of generative AI technology will require active

strategic decision-making to reshape the value proposition and operating model
within management consultancies.
H3 – Adjacent disruptive trends in the management consulting industry are

going to be compounded by Generative AI
4) DATA COLLECTION
a. SAMPLING CRITERIA
The sampling criteria for this study will encompass individuals from established management
consulting firms who meet specific requirements. Participants will be required to have a
minimum of three years of experience within the consulting industry to ensure a sufficient
level of professional expertise and familiarity with the industry dynamics.
This study will incorporate interviews with both middle managers and top-level executives
within management consulting firms. Middle managers will be included in the study as they
are actively involved in the operations of consulting engagement, possessing hands-on
experience and insights into the practical application of generative AI. Their perspectives can
provide valuable insights into the day-to-day implications associated with integrating
generative AI into consulting projects. On the other hand, interviews with top-level executives
will be conducted to gain insights into the strategic vision and high level decision-making
regarding the adoption and implementation of generative AI technologies within their firms.
This dual perspective from middle managers and top-level executives will provide a

comprehensive understanding of the implications and potential of generative AI in the
management consulting industry.
Furthermore, participants will be selected based on their expressed interest in Generative AI

when specifically queried during the recruitment process. This criterion aims to identify
individuals who have actively engaged with the concept of Generative AI, potentially
possessing insights, opinions, or experiences relevant to the research objectives. By
incorporating these additional criteria, we aim to gather a focused and knowledgeable group
of participants who can contribute valuable perspectives on the impact of Generative AI
within the consulting industry.
b. DATA ANALYSIS
Content analysis is a widely utilized qualitative research methodology that entails the
identification of themes, patterns, words, and concepts within qualitative data. In the context
of our research on the impact of generative AI on management consulting business models,
content analysis provides a valuable framework to glean insights from industry stakeholders.
By quantifying and examining the meanings and relationships inherent in the data, our goal is
to obtain a comprehensive understanding of how professionals perceive and navigate the
evolving landscape of management consulting. Our data sources encompass a range of
interviews, industry reports, articles, and pertinent publications, enabling us to employ a
relational analysis approach that explores interconnections between various concepts. For
example, we may explore how the integration of generative AI influences service offerings,
client engagements, or overarching business strategies. Through the implementation of
content analysis, we seek to unveil valuable insights into the implications and opportunities
that arise from the incorporation of generative AI within the management consulting domain.
5) RESEARCH ETHICS
The study adhered to ethical principles of anonymity and confidentiality to safeguard the
privacy of human participants throughout the research process, including data collection,
analysis, and reporting (Allen, 2017). Measures were taken to remove personally identifying
information provided by the interviewees, ensuring the preservation of confidentiality.

Furthermore, the data collection approach prioritized anonymity, collecting information
without disclosing personally identifiable details.
This research was conducted with confidentiality (Allen, 2017). Both instances involved the
collection, transformation, and examination of information from participants. Rather than
exposing individuals' experiences and behaviors, the focus of this study centered on
understanding their actions and experiences. As responsible researchers, it is essential to
respect the respondents' wishes, particularly when they express a desire for anonymity.

III – DATA ANALYSIS AND FINDINGS
1) MAIN FINDINGS
2) QUANTITATIVE PORTION
Our semi-structured interview comprised a set of quantitative questions. The objective of this
portion is to gauge, beyond the verbatim and semantics, the magnitude of the expected impact
of generative AI on the management consulting industry. We have asked our panel of
participants 3 quantitative questions that we will, at a later stage, put in perspective with
elements such as their background, their roles and their level of experience.
1) ADOPTION
“Q1 - Do you occasionally use generative AI (more than once) in a professional context?”
Although all the participants included in this survey have already tested a generative AI
model at least once, mainly ChatGPT, it was interesting to collect data on the current use of
generative AI by these participants and correlate it other elements such as the expect impact
on the industry, their roles and their level of experience. The results show that 5 out of 12
participants use generative AI regularly in a professional context, which is impressive in
terms of adoption given that the technology has been available for roughly 6 months.
# ROLE USE
1 Manager YES
2 Senior Manager YES
3 Partner YES YES 5/12 participants
4 Director NO NO 7/12 participants
5 Senior consultant NO
6 Senior Manager NO
7 Manager YES Top-level Execs 25%
8 Partner NO Middle Management 50%
9 Principal NO
10 Senior Manager NO
11 Manager YES
12 Senior Manager NO
Figure 7 - Results 'Do you occasionally use generative AI in a professional environnement?"
When asked about the purpose of use of ChatGPT, the participants identify 3 main use cases:

- Data Synthesis – 33% of participants: Given a large volume of text, ChatGPT
provides participants with highlights and insights without the need go through the
whole volume of data. Allowing them to scope the work to be provided much faster.
- Formalization – 17% of participants: Under time constraints and when the stakes
are relatively mild such as internal communications. The participants use ChatGPT to
create drafts of paragraphs that they intend to write by communicating their ideas
using bullet-points. Although the final version is thoroughly reviewed and revised in
all circumstances, having an advanced draft allows for substantial time savings. It is
important to mention that some participants were extremely reluctant at the idea of
using ChatGPT to formalize any sort of communication even in draft form as they
identified this task as very personal and close to their identity as consultants. At least 2
of the participants argued that nuance and judgement are quintessential to the
consultant’s identity and cannot be delegated, even to more junior consultants.
- Critical eye (Miroir de réflexion) – 8%: When unsure of an approach or a

framework to address a problem in a holistic manner, 8% of participants use ChatGPT
in order to challenge their initial assumptions and identify what additional aspects
should be identified in their approach. The prompts used in such circumstances
contain a summarized recap of the problem, their objective and an explicit question
asking how they should go about the solution.
Last but not least, as stated per our sampling, we have interviewed both top-level execs and
middle managers to get both a strategic and operational view of the topic at hand. The usage
of ChatGPT by middle managers in our participant sample is higher (50%) than by top-level
executives (25%), which could be explained by the fact that top level executives are more
involved in client facing roles and acquiring business, and less involved in the operations that
would require the use of an AI-powered assistant.
2) SCALE OF IMPACT
“Q2 - On a scale from 1 to 10, how much would you rate the impact of generative AI on the
consulting industry?”
Although quantitative in nature, this question is very appreciative since it doesn’t provide a
framework for assessing each level of impact in the scale. The nature of a semi-structured

interview does not allow for a detailed framework presentation. However, these values are
complemented by comments which are consistent with the collected values:
# ROLE IMPACT
1 Manager 5
2 Senior Manager 4
3 Partner 4 Top-level exec avg 2,5
4 Director 2 Middle MGT avg 4,25
5 Senior consultant 6
6 Senior Manager 5
7 Manager 4 Generalist avg 4,33
8 Partner 1 Strategy avg 3
9 Principal 3
10 Senior Manager 2
11 Manager 4
12 Senior Manager 4
Figure 8 - Results " From 1 to 10, expected impact of generative AI on the management consulting industry"
Globally, results indicate that generative AI is expected to have a low-mild impact on the
management consulting industry with values ranging from 1 to 6 with a 3.67/10 average. The
justification provided was example-based in most cases, stating that management consulting
has existed and survived before excel, cloud computing and big data and has continued to
thrive and adapt to technological disruptions throughout its history. Furthermore, they argue
that despite being a knowledge-based industry, it is primarily human conveyed which explains
why it has remained successful despite a commoditization of knowledge. However, the
participants on the upper side of the scale justify that generative AI is different in the sense
that it does not provide just knowledge, but also reasoning, customization and know-how.
3) TIME HORIZON
“Q3 - On what time horizon do you expect the impact of generative AI on the management
consulting industry to materialize?”
After assessing the magnitude of the potential disruption, the purpose of this question is to
gauge the urgency of disruption in the management consulting industry. The participants were
given a time-frame for each mode: Short-term (1 to 3 years), mid-term (4 to 7 years) and
long-term (above 8 years).

# ROLE Horizon
1 Manager Short-term Impact Horizon Distribution
2 Senior Manager Short-term
3 Partner Short-term
Long-term
4 Director Long-term
5 Senior consultant Short-term
Mid-term
6 Senior Manager Short-term
7 Manager Mid-term
8 Partner Long-term Short-term
9 Principal Long-term
10 Senior Manager Long-term 0% 20% 40% 60%
11 Manager Mid-term Short-term Mid-term Long-term
12 Senior Manager Long-term
Figure 9 - Time-Horizon for the impact of generative AI on the consulting industry
The results in this case seem quite divisive. Roughly half of the respondents (5/12) estimate
that the change is impending while the same portion estimate that the impact won’t
materialize anytime soon. Only 2/12 respondents provided a moderate answer with a mid-
term horizon. Solid arguments were presented on both sides to justify opposing positions.
Advocates of a short-term disruption argue that the adoption curve of generative AI, even
within their firms is unprecedented. Several examples have been provided such as company
wide emails sent to clarify the rules of generative AI use in a professional context to avoid
any client data leaks (interviewee #2), or spontaneous consultant initiatives to animate
workshops on the best practices of AI usage (interviewee #5). On the other hand, supporters
of the long-term impact vision argue that the technology is far from being mature enough to
justify company wide transformations on the short-term, without minimizing the importance
of local and contained experimentation with the introduction of generative AI both in
consulting engagements and

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ESSEC EXECUTIVE EDUCATION

Advanced Master Program

POTENTIAL DISRUPTION OF MANAGEMENT CONSULTING

Par MASSOUDI Ali

Defense date: July 6th, 2023

I would like to express my deepest gratitude to my professors at the ESSEC businesses

Mrs. Anne-Flore MAMAN

Titre Thèse professionnelle – Auteur - Date 3

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a. WHAT IS MANAGEMENT CONSULTING ?

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- Origins at the turn of the 20th century:

- Maturity throughout the 20th century:

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The following segmentation suggested by consultancy.org presents many recurring features

Figure 1- Consulting Industry segmentation - Source : consultancy.org

According to this segmentation, Management consulting is defined as the aggregate of

Titre Thèse professionnelle – Auteur - Date 11

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d. ROLE OF THE CONSULTANT

Expert knowledge to solve identified problems Clegg et al. (2004)

Uncertainty Consultants provide reassurance and

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Consultants add credibility to pre-made Ernst and Kieser

Consultants may be perceived as

e. KEY RESOURCES IN A MANAGEMENT CONSULTING FIRM

Knowledge and know-how: As a knowledge-based industry, it goes without saying that

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f. THE CLIENT-CONSULTANT RELATIONSHIP

In management consulting, the client-consultant relationship is a dynamic and multifaceted

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Modern AI is an interdisciplinary field that replicates or surpasses human cognitive abilities

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Notable achievements in NLP included significant strides in sentiment analysis, machine

b. WHAT IS MACHINE/DEEP LEARNING?

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c. AI RELATED RISKS & CHALLENGES

Security risk: Security in the context of artificial intelligence (AI) presents a

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Transparency and explainability: Promoting transparency and scrutability in AI

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Safety and performance: AI applications necessitate meticulous implementation and

Third-party risks: In the process of building AI models, it is common for

d. WHAT MAKES AI GENERATIVE?

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Figure 3- Time to reach 1M users per technology - Source: STATISTA

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Figure 4 - Technology stack panorama - Source: McKinsey website

f. EXPECTED IMPACT OF GENERATIVE AI ON BUSINESS

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- Office and administrative support – 46%

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Impact by qualification: In their white paper titled (McKinsey – Economic potential