Should You Hire An AI Consultant? Here's When It's the Right Move, and When It's Not. No one wants to get left behind, and there's a growing industry of AI consultants who want to help. But is it worth the investment?
By Liz Brody Edited by Frances Dodds
This story appears in the November 2023 issue of Entrepreneur. Subscribe »
As generative AI rose in prominence this year, Jayesh Gadewar had a thought: We can use this to leapfrog our competitors. He's the cofounder of Scrut Automation, a startup that builds compliance and security software for businesses, but as far as AI, they just didn't have the expertise.
So he did what many other leaders are now doing: He hired an AI consultant.
"Generative AI is funny in that the basic capabilities you get for your $20 a month for ChatGPT Plus are pretty impressive," says Tom Davenport, professor of information technology and management at Babson College and a senior advisor at Deloitte's AI practice, "but to customize it is technically challenging." That's why, since OpenAI's chart-topping chatbot landed a year ago, a new breed of specialist has risen to help companies harness AI's game-changing wizardry.
Related: How AI Can Turbocharge Innovation and Help Destroy Your Competition
The consultants run the gamut. There are major players like Deloitte, IBM, and Accenture, all of which expanded their generative AI consulting practices this year. But smaller consultancies that help startups with leaner budgets are also beginning to crop up, and Scrut hired one of them called LeewayHertz.
A firm of 250 professionals with offices in the U.S. and India, LeewayHertz has built its own ZBrain, a generative AI platform that allows potential clients to share their data securely. Once that happens, LeewayHertz prompts ZBrain to come up with ideas for how to help their client. From there, says CEO Akash Takyar, the human team starts the serious brainstorming.
So what could LeewayHertz do for Gadewar? Scrut's platform is used by chief information security officers and others who are often bogged down by extensive security assessment questionnaires that can take 50 hours to finish. "Nobody wants to answer long, long Excel sheets," says Gadewar. "It's grunt work." So LeewayHertz collaborated with Scrut to build a new AI tool that can complete the process in 15 minutes. Then they expanded its capabilities to quickly answer other questions users have.
But is an AI consultant worth it for everyone? That's up for debate.
First, there's the expense: No matter what size the consultancy, the costs are significant. Even at DataRoot Labs, a smaller firm that serves startups, the average price for a customized virtual assistant can run $60,000 to $90,000. More extensive tools, like the ones created at LeewayHertz, can set you back $150,000 or more.
Then, there's the question of whether that money is worth it.
Related: AI Isn't Replacing Workers; It's Picking up the Slack. Here's How.
For Matt Higgins, it's a hard no. "I think using an AI consultant is completely unnecessary and potentially lazy," says the cofounder of RSE Ventures and an executive fellow at Harvard Business School. He suggests following AI innovators and experts on X (formerly Twitter) and experimenting with their suggestions. "In my opinion, what's already on the shelf is amazing and certainly good enough for 95% of use cases at small and midsize companies."
But Davenport, the Babson professor, thinks there are some cases where a consultant can be useful, and offers a simple distinction: "If this is something you think is really going to be important to your startup's future," he says, "you should develop an internal capability. But if you want to explore how to take your knowledge of, say, some legal market and embed it into an AI system, that could be pretty specialized, and you might want to hire a consultant." You might even find that consultant for free; he says that business schools and university AI programs are often looking for corporate projects that their students could work on.
Despite all that, Gadewar — like many startup consulting clients — is happy with his decision. Sure, he says, he could have tried to build his own AI team. But "AI talent is very hard to find, and you have to train folks," he points out. "Again, we just don't have the expertise. Working with a consultant who does helped us minimize the cost of that opportunity and get to market faster. And now we have a differentiating edge over other companies. It has given us an advantage."
