The consulting industry is facing a significant shift as companies increasingly use artificial intelligence to perform tasks that previously required external advisers.

Businesses are bringing more technology projects in-house, including coding, software implementation, cybersecurity and research. The change is putting pressure on consulting firms to demonstrate clearer value and adapt their commercial models.

For decades, large consulting companies benefited from their ability to provide specialised expertise at scale. Businesses could bring in external teams when they needed help with technology transformation, strategy or complex implementation.

AI is changing the economics of some of those assignments.

Tasks that once required large teams can increasingly be supported by software tools, allowing internal employees to complete certain projects more quickly.

That does not necessarily mean consulting is disappearing.

Instead, the industry may be moving toward a different model.

Consulting firms could increasingly compete on specialised expertise, strategic judgement, complex implementation and high-stakes decision-making rather than routine analytical work.

The shift is already creating tension between consulting firms and their clients. Businesses are demanding stronger evidence that external services deliver measurable value, while consulting companies are being pushed toward new pricing structures and technology-led offerings.

This transformation is particularly relevant for large consulting organisations because their traditional business models depend heavily on professional hours.

If technology allows clients to complete certain tasks with smaller internal teams, the amount they are willing to spend on external labour could decline.

That creates an important leadership challenge.

Consulting executives must decide which parts of their business should be automated, which capabilities need deeper investment and how employees should be trained for a market where routine analytical work is becoming less valuable.

For clients, meanwhile, the shift creates an opportunity to build stronger internal capabilities.

Rather than outsourcing every technology challenge, companies can increasingly combine internal teams with advanced tools and selectively bring in external specialists for the most complex problems.

The future of consulting may therefore be less about the number of consultants assigned to a project and more about the quality of expertise brought to the most difficult decisions.

This could create a more specialised industry.

The firms that adapt successfully will likely be those that can combine technology with human judgement, industry knowledge and implementation expertise.