"If GenAI enhances or speeds things up, they should get more value faster and shouldn't pay the same rates. Our customers' buying patterns shifted to favor agile, outcome-based, AI-powered engagements with faster time to value and clear ROI, creating a significant revenue and workload concentration risk in our top revenue cohort."
"Consulting has long operated on a straightforward equation: revenue scales with headcount and hours worked. Projects are often priced on an hourly basis, with teams of engineers, architects, and project managers assigned to client engagements. But generative AI tools are now accelerating coding, documentation, and software development."
Consulting clients, including major companies like Booking.com and Danske Bank, are demanding renegotiated contracts that reflect AI-driven productivity gains. Amazon's ProServe consulting arm, which influences over $10 billion in annual revenue, is experiencing significant pressure to adopt "AI-delivered pricing" with faster results at lower costs. Internal documents reveal Amazon is reorganizing ProServe around AI agents described as "digital employees" while moving away from traditional billable-hour models. This shift reflects broader industry changes as generative AI accelerates coding, documentation, and software development. Consulting firms face a fundamental challenge: the traditional revenue model based on headcount and hours worked no longer aligns with AI-enhanced productivity, forcing adoption of outcome-based pricing that charges for results rather than time-based labor.
#ai-pricing-models #consulting-industry-transformation #outcome-based-pricing #generative-ai-automation #billable-hours-disruption
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