Artificial intelligence (AI) is no longer the domain of science fiction. Instead, it’s rapidly becoming a dominant force in the Fourth Industrial Revolution – that of digital transformation.
It’s likely that many owners of knowledge-intensive services businesses, such as IT services, media and marketing agencies or consulting firms, will be considering how AI fits into their strategy.
Further, those looking to sell their business in the future would do well to consider how AI might enhance their market position. Buyers are increasingly interested in acquiring knowledge-intensive businesses with these capabilities, which means those demonstrating the foresight to embrace AI sooner rather than later could expect to command a premium valuation.
Entering the AI game
Broadly recognized as a ‘game-changer’ for multiple reasons, AI eliminates the risk of human error, improves efficiencies, leads to cost savings and improves levels of job satisfaction.
Accenture finds AI has the potential to boost performance across all sectors, with average profitability expected to rise by 38%, leading to an economic boost of $14trn by 2035 across various industries.
While industries such as retail, manufacturing and healthcare have long been embracing AI and robotics, people-based businesses are still playing catch-up.
Knowledge-intensive services businesses are able to use AI to help deliver faster, more cost-effective solutions to their clients.
These technologies complement and support human input, rather than seek to replace it – consulting firms need not fear that the robots are here to steal their lunch.
AI relies on data, be that structured or unstructured. And while structured data is easier to read and organize, the human element required to interpret unstructured data is still worth its weight in gold.
Not an either/or scenario
Yseop is an AI software developer based in Dallas and the consulting businesses using its software spend a large proportion of their time producing reports for clients – analyzing performance, making assessments for acquisition purposes or carrying out some form of due diligence.
Arden Manning, senior vice president of global marketing at Yseop, says: “All these things are data driven; the tasks they are carrying out are highly repetitive and yet highly paid consultants are basically chained to their desks to write these reports. They’re rarely enjoyable to write, are time consuming and expensive.”
If an AI solution were used, said reports could be produced automatically at the click of a button.
More customized solutions
Due to its agile nature, allowing for real-time evolution, instant reactions and personalization, the ability to improve customer engagement with brands means media, advertising and marketing seem a logical sector to exploit AI – and one of the fastest growing.
According to MarketsandMarkets, the AI technology sector for media and advertising alone was valued at $141.8m last year and is expected to grow to $2.8bn by 2022.
Recent press coverage reported that Publicis Groupe announced at Cannes they would be withdrawing from all marketing activity for the next year, diverting their efforts instead to build ‘Marcel’, an AI platform that will collate profiles of all 80,000 employees across 130 countries and use predictive technology to match staff up with client briefs.
Businesses ready and willing to embrace innovative and technology-enabled solutions for their clients will inevitably be more attractive to buyers. For business owners considering a future sale, and seeking to achieve a premium valuation in the process, consider the following:
- Does your strategy consider how the development of AI will impact your industry?
- Could your business benefit from hiring AI specialists to champion evolution?
- Would a staff training program help build understanding and develop an innovation culture?
- Are you developing proprietary AI tools to enhance your services and business performance?
The time for integrating AI into your propositions is now. This includes internally, improving service to clients, as well as incorporating it into a future exit strategy. For those seeking the next phase in their evolution, reaching for the supportive hand of the robots might not be such a bad idea.
This blog is a condensed version of a more in-depth article. Click here for more information on the disruptive nature of AI to consulting firms.
If you are preparing to sell your consulting firm and would like to discuss your plans, please get in touch.
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