{"id":5669,"date":"2024-01-29T16:31:34","date_gmt":"2024-01-29T16:31:34","guid":{"rendered":"https:\/\/www.horsesforsources.com\/?p=5669"},"modified":"2024-09-11T11:38:29","modified_gmt":"2024-09-11T11:38:29","slug":"big4-lunch-eaten-genai_121723","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/big4-lunch-eaten-genai_121723\/","title":{"rendered":"Are the Big 4 about to get their lunch eaten by GenAI?"},"content":{"rendered":"
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Time running out for legacy Big 4?<\/em><\/span><\/p>\n Nothing has disrupted the cozy status quo of big enterprise technology transformations more than GenAI.\u00a0 It has been a true leveler <\/em>across the industry where suddenly everyone is operating on a level playing field, trying to convince the world they have a better GenAI story than their competitors.<\/p>\n Up until November 30th,<\/sup> 2022, the Big 4 consultants dined on the ineptitude of large enterprises to move bad processes into the cloud, while the Indian heritage outsourcers fed on the tasty scraps of supplying armies of low-wage talent at scale to keep these hulking institutions somehow functioning.<\/p>\n The legacy software companies sold their licenses through these services firms to maintain the flow of insane amounts of money and maintain the veneer of competence as these clunking enterprises kept up with the latest versions of SAP, Oracle, Workday, and Salesforce, with smatterings of UiPath bots to knit together broken workflows and poorly integrated systems.<\/p>\n And to cap it off, the hyperscalers profited from everyone as they sought to force a cloud narrative for CIOs to desperately follow to sound credible.\u00a0 In short, everyone has been on the enterprise technology gravy train, and it\u2019s taken a genuinely credible new technology<\/a> that business leaders can understand<\/em> to redirect the train.<\/p>\n As Henry Hill famously said in the classic movie Goodfellas: \u201cWe ran everything. We paid off cops. We paid off lawyers. We paid off judges. Everybody had their hands out.\u00a0 Everything was for the taking. And now it’s all over.\u201d<\/p>\n A senior partner in a Big 4 consulting org literally declared to a major enterprise leader this past week: \u201cGenAI is just another technology tool and nothing more\u201d.\u00a0 Many of these (previously) highly respected and handsomely paid consultants have been caught flatfooted and are dismissing GenAI because they don\u2019t understand it and can\u2019t divert extra millions of dollars out of their clients’ budgets to \u201chelp\u201d them.\u00a0 The harsh reality is smart clients can smell the bullshit and aren\u2019t going to get burned like they have so many times in the past with consultants wielding shiny new tech.\u00a0 And you only need to look at the sheer scale of layoffs<\/a> in these firms to comprehend that the gravy train is screeching to a halt.<\/p>\n Net-net enterprise perceptions are changing fast, and our latest pulse survey of 425 global 2000 enterprises shows the Big 4 did no better than other IT and business service providers when rated as strategic partners for emerging technology capabilities.<\/p>\n Services partners need to win their clients\u2019 hearts before they can attack their wallets<\/strong>. No one budgeted for GenAI, and two-thirds of major enterprises are still recovering from overspending on bad cloud migrations<\/a>.\u00a0 However, most ambitious C-Suite leaders are infatuated with the potential of GenAI<\/a> to make their companies more competitive and improve their own<\/em> capabilities to be smarter and slicker at their jobs.\u00a0 Partners who understand their clients’ institutional issues and are willing to invest time at no cost to figure out a GenAI roadmap will reap a lot of fruit next year.<\/p>\n Enterprises want to explore solutions that are fast and uncomplex.<\/strong> The big challenge with GenAI is to clean up enterprises\u2019 messy data so they can benefit from the tools. Otherwise, GenAI becomes lipstick looking for a pig.\u00a0 Enterprise leaders want no-nonsense partners which can understand the business context<\/em> behind their data needs, as opposed to teams of highly expensive technical and domain consultants who\u2019ll charge $2 million just to show up and document the problems.<\/p>\n The winners will be the partners which can quickly understand what needs to be done to fix and scale the data without charging the earth, with the ability to work fast and smart.\u00a0 When you look at the deep institutional relationships the likes of Cognizant, HCL, Infosys, TCS et al. have with their clients, many of whom are into 4th<\/sup> or even 5th-generation\u00a0contracts, surely these firms have a huge opportunity to convince enterprise leaders to take a risk with them to make the painful changes necessary to capitalize on GenAI tech?<\/p>\n As the HFS Pulse study showed this year, tech spending plummeted from 11% growth in 2022 to barely 2% in 2023.\u00a0 While a lot of the pullback has been a result of difficult economic conditions earlier this year, there has also been a backlash as our research has shown only 32% of enterprises consider they have achieved their strategic priorities with their Cloud investments.\u00a0 Net-net, enterprises are being careful shelling out more millions on new technologies after such heavy disappointment with Cloud.<\/p>\n However, the good news is that our latest Pulse data of 600 Global 2000 enterprises reveals 2024 tech budgets are rebounding and the core driver is AI (both Machine Learning and GenAI).\u00a0 So the big question now is which services firms enterprises will choose to partner with to embed GenAI into their data and processes:<\/p>\nOur industry has been equalized, and a new set of winners are going to emerge<\/strong><\/span><\/h3>\n
Why the legacy Big 4 approach and mentality will fail with GenAI<\/span><\/h3>\n
Tech spend is rebounding in 2024, with AI as the main driver.\u00a0 The battle is on to partner with ambitious enterprises<\/strong><\/span><\/h3>\n
AI-driven technology spending is expected to increase by 10% in 2024<\/strong><\/span><\/h3>\n