Summary – Risk and crisis consulting is on the brink of its ‘Kodak moment’. As AI streamlines tasks by over 90%, firms face a dilemma: adopt AI and disrupt the business model or resist and risk obsolescence. Small teams have the edge, but all must adapt. Dive in to discover the industry’s future.

Why the Industry is in Trouble

Despite being the inventor of the first digital camera in the late 1970s, Kodak famously ignored the switch to digital photography, losing the company its commanding market lead and significantly hurting the business.

Risk and crisis consulting is currently facing its own Kodak moment.

AI and machine learning tools reduce the effort, time, and cost of routine risk and crisis tasks by well over 90%. Consultancies believe they can harness these efficiencies to improve their profit margins and assume that only the largest firms will want, or be able, to develop their own tools.

Both assumptions are incorrect

First, clients are keenly aware of the tendency of consulting firms to pad the billing hours. Therefore, it is inconceivable that clients won’t question why they are being billed the same number of hours for work that a consultancy boasts is mainly being done by AI.

Second, these tools are readily available to anyone to build their own services. Plus, a small development team is faster and more agile than a big consultancy’s IT department.

So this is the industry’s Kodak moment: the consultancies believe that they can continue with business as usual, missing or ignoring the changes that are taking place around them.

However, even if these firms did want to take advantage of these opportunities, they can’t because a switch to digitization breaks a dollars-for-hours business model.

Just to be clear, I don’t mean that everything is replaced by an AI: you still need judgement, expertise, and empathy, particularly in times of crisis so those roles will continue. But that’s not enough to keep some of the big firms running – they need the busy-work dollars to keep the ship afloat.

So What?

If you’re a consultant – at a large or small firm – you need to think about how you’re going to manage this tension.

• Either you use AI to be more efficient but it breaks your business model.
• Or you don’t use AI and your business gets left behind.

I don’t think there’s an easy answer for the big firms and some hard decisions lie ahead.

However, small, nimble firms and teams-of-one are in a great position to take advantage of these technologies. You just have to bite the bullet and start embracing the technology.

(If that’s something you’re interested in, sign up here to join the RiskTech group. That’s where I’ll share all the tips and tricks I’ve picked up for building technology – including AI – into your systems and processes.)