AI ‘Consulting’ Services Can Help Smaller Businesses, but Risks Persist

Consultancy firms can be very useful for growing businesses, giving new companies guidance or financial or management advice when needed, backed by experience and expertise. But for smaller enterprises with narrow margins, the cost of hiring top-rank consulting firms can be financially out of reach. Enter AI, according to a new report on Business Insider. In much the same way that generative AI tools promise to add, say, coding expertise to a small team or free up workers from mundane tasks to engage in more productive work, AI-powered “consultant” apps are emerging from a suite of Silicon Valley startups, with the goal of helping small firms carry out market research, analyze data, or smooth and optimize their business operations. Business Insider quotes Thomson Nguyen, co-founder and managing partner of Wyoming-based venture capital outfit Saga, on the phenomenon. These new AI consultancy players won’t be challenging big consulting firms any time soon, he thinks, simply because if you’re a “Fortune 500 company building AI infrastructure for your call center, you’ll still hire the Big Four,” because you’ll have the budget set aside and experience in working with third-party consultancies. So the real target for these startups is smaller companies, making under $100 million a year, which are too small to hire a McKinsey or Deloitte. Business Insider notes that AI apps like PromptQL, from Bangalore-based AI unicorn Hasura, are directly set up to tackle typical consultant roles—including analyzing a company’s internal data, and continually adapting over time. PromptQL even has a team of engineers that’ll help craft an AI analyst agent specifically to meet the needs of a client company. Hasura co-founder and CEO Tanmai Gopal admitted to Business Insider that it’s “not as good as a McKinsey consultant,” but it has the benefits of being “instant.” That’s the very opposite of the sometimes protracted process during which a consultant learns about their client company before tackling an analysis, since an AI can just be switched on and immediately wrestle with data. Among the top tasks being assigned to AI consultancy startups are starting and managing call centers and customer service automation, integrating software and AI into the client company’s operations, and building management and operational AI systems. There are even AI tools targeting executive coaching. This may not be a surprise, considering that big tech names like Salesforce are already selling their own agent-based AI services aimed at automating the sales process and call center operations. AI startups offering similar options and targeting smaller companies as clients is natural. Gopal told Business Insider that, for now, these AI consultancy tools aren’t really replacing human workers—echoing many an AI evangelist’s arguments about the role of AI in the workplace. Human workers have more diverse skills, and for the moment such services depend as much on the “network” of colleagues that a human worker can access as on their advice. What’s the takeaway for your company? If you find yourself struggling with an expertise gap, you may find that there’s an AI-powered consulting tool out there that will fit your needs. But as with most AI tools, perhaps the thing to remember is that (just as with human consultants, though perhaps less obviously) AIs are not infallible. AI systems regularly make mistakes, and can hallucinate analysis and advice that they then pass off just as if it was real advice. You’ll have seen this by now, perhaps when you asked an AI to write a snippet of code for you. The AI may insist the code works, but when you say “No, it doesn’t,” the AI may say “Oh! You’re right!” and offer a fix. Whenever you’re using AI it’s best to run the results past a human worker before making a critical decision based on an AI consultant’s analysis. BY KIT EATON @KITEATON