Making the case for AI in professional services: Stats, use cases, tips
AI in professional services promises to help firms innovate and drive growth. We've got potential use cases and best practices for you to consider.
Consultants get paid big dollars to scrutinize their clients’ operations for opportunities to capture new efficiencies, develop new revenue streams, implement new technologies, and win new business. Now, following a wave of contract terminations by the U.S. government, it’s time they began looking inward for those kinds of opportunities.
The federal belt-tightening could cost some of the world’s largest consulting firms hundreds of millions of dollars in business, according to an analysis by Fortune Magazine. Deloitte could be the hardest hit, with at least 124 contracts reportedly terminated or modified thus far during the second Trump Administration, resulting in more than $371 million in potentially lost revenue for the firm.
Also losing big with the federal contract cutbacks, according to Fortune, was Booz Allen Hamilton, with 61 of its government contracts terminated or modified, at a potential cost of $207 million to the firm, and Accenture, which is projected to lose $240 million in potential revenue from cuts impacting 30 contracts.
Filling the void after federal contract cutbacks
Losing chunks of revenue as sizable as that hurts, even for massive consulting firms like Deloitte, which reported revenue north of $67 billion in 2024.
As much uncertainty as the government austerity measures have created among firms that do business with Uncle Sam, and with additional cutbacks possible if not probable, these firms have little choice. They must find ways to maximize whatever government contracting work they still have, while also working to fill the void left by the work they lost in the reshuffling.
That’s going to require them to do what they’re accustomed to doing for their own clients (including, of course, the U.S government): create value by thinking creatively, executing methodically, and using technology strategically.
Let’s drill down into some of ways consulting firms can strengthen their business as the US government cuts back on contracts.
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Reimagine contractual and project structures
One likely result of the contractual reckoning is a shift to outcome- or performance-based pricing structures that better align the interests of firm and client, where the fees a firm charges the customer are based on actual project outcomes, as measured by pre-established targets and metrics.
If one of the federal government’s goals in targeting contracts with consulting firms is to get more value from consulting services, then moving to performance-based pricing is one way to do so.
Firms will need to ensure their accounting, finance and project-management systems can adapt to and support performance-based contractual structures. They’ll also need to make sure their systems are equipped to accurately and transparently track and report on the KPIs by which their performance will be measured.
Given GSA’s push to consolidate contracts and eliminate duplicative procurement across agencies, consulting firms should also be ready to pursue project opportunities that cut across multiple agencies or departments, with the ability to structure and price contracts accordingly.
Explore new business models + revenue streams
To fill the revenue void left by downsized or canceled government contracts, consulting firms should be looking to innovate on the product and service front. That could include developing new offerings that monetize their intellectual property and expertise.
For example, a firm with cybersecurity expertise could roll out new as-a-service offerings that give clients access to managed, cloud-based security strategies, for example. Or, a firm with expertise in supply chain management could develop predictive modeling and analytics services to reduce client revenue leakage, with fees based on the actual savings the service provides.
Intelligent modeling tools can help a firm structure and price these kinds of services.
Facing heightened pressure to demonstrate value to government agencies and other clients, firms also need to find ways to enrich the services and experiences they provide to them. They could, for example, embed intelligent, interactive tools within the IT services they provide clients so users can query and quickly get insight and personalized recommendations from the system.
Intelligent workforce + talent management
The potential loss of large chunks of government business puts the onus on consulting firms to more closely manage staff and contingent/contractor resources. AI-powered workforce management capabilities can forecast resource needs and costs based on new contract parameters.
And in a fluid contractual environment, it can help firms skill-match, optimize team make-up, and identify potential skill and resource surpluses before they become problematic.
All the contractual uncertainty means capturing efficiencies and boosting productivity across the business and within specific projects are more critical than ever. AI and machine learning can help by automating and speeding processes like data collection, report generation, document review, invoicing and more. Generative AI-driven assistants can help people within your firm access information, create content and perform other tasks more efficiently.
Beyond federal contracts
With the federal contract cutbacks, consulting firms need to cast a wider net for new business opportunities.
Now’s the time for firms to lean more heavily on market intelligence capabilities that scour the landscape and provide a steady stream of public and private opportunities (bid solicitations, RFPs, etc.), some that they might otherwise overlook, and that their competitors might miss.
