Summary: IBM Consulting’s Mohamad Ali says firms must start thinking like software companies to survive the AI era. Consulting is moving from human leverage to digital leverage – where code, data, and reusable systems drive value.
The new consulting model?
Consulting is being rewritten in code and data.
What used to be delivered through people and PowerPoint is now being built as software. IBM Consulting’s Mohamad Ali says firms must start acting like software companies if they want to stay relevant.
This is already underway. IBM has developed more than 5,000 digital “agents” that automate tasks once handled by consultants – and plans to sell them as standalone products.
Ali calls it “service as software.”
It’s not a buzzword. It’s a redefinition of consulting’s economics.
Consulting is moving from advice to systems
The traditional consulting model was built on human leverage: analysts at the bottom, partners at the top, and margin in between.
That model is now under pressure.
AI can handle routine analysis, benchmarking, and slide production at scale. What remains valuable is judgment; the ability to frame, interpret, and apply insight.
Partners will lead smaller, more specialised, tech-augmented teams. The new leverage will come from systems, not staff.
Firms are racing to codify their IP
Large language models (LLMs) have levelled the playing field. Every firm can access the same base models, OpenAI, Anthropic, or Gemini. The differentiation now lies in what firms build on top: proprietary datasets, reusable workflows, and embedded tools.
McKinsey has Lilli, BCG has BCG X, Deloitte has CortexAI, and IBM has its own agentic platform. Each aims to make knowledge repeatable and monetisable.
The real IP is no longer the slide deck. It’s the system behind it.
Pricing is shifting to software logic
Consulting has always billed by time and utilisation. That’s changing.
Recurring, access-based, or outcome-linked pricing is becoming the norm, particularly for work tied to proprietary platforms or AI-driven tools.
Margins increase, but so does accountability.
IP replaces utilisation as the key performance metric.
Firms that can productise their expertise will scale faster and attract better valuations.
The talent equation is changing fast
McKinsey now talks about hiring “geeks and grizzled executives.”
That mix says a lot about the direction of the industry.
Expect fewer generalists and more hybrid profiles: data engineers who understand strategy, or consultants who can code, test, and integrate AI into delivery.
The apprenticeship model — once the foundation of consulting — is being replaced by project ecosystems that pair judgment with technology.
The real competition is no longer other consultancies
Software vendors are moving in.
IBM, Palantir, SAP, and others are embedding advisory tools directly into their platforms.
If clients can access data-driven recommendations instantly through AI-powered systems, the value of hiring large consulting teams declines.
The challenge for consulting firms is to evolve before the software companies fully cross the advisory line.
Final thoughts
Consulting’s leverage used to be people and frameworks.
Now it’s people, AI, code, and data.
The firms that learn to build and sell systems, not slides, will define the next decade.
This post comments on:
The Financial Times: Consultancies must become software companies to survive AI boom, IBM executive says
7 October 2025
Ben Appleton is the founder of Strat-Bridge, a specialist executive search partner to the strategy consulting industry. He works with global consulting firms and senior leaders across the UK, Germany, Switzerland, and beyond — helping them build capability at the Partner and Director level.
