A new, AI-native consultancy firm has launched to address what its founders call the “broken” model of traditional consultancies, which they argue is costing businesses billions for ineffective AI projects.
Backed by $15m (£11.4m) in private equity funding from NY-based Siguler Guff, UK-headquartered Valliance launches its “radical new model” of charging based on value delivered, not billable hours.
One of the founders, Tarek Nseir, stated: The world is in an AI arms race”, adding, “The big firms rely on outdated practices that drive up business AI spend and create waste, rather than value. Billions are being spent on science projects and initiatives that will never work in production, and that’s costing enterprises and the economy.”
This is accompanied by a survey of 1,000 senior leaders at large UK enterprises, which revealed that half of consultancy-led AI projects are falling short of expectations.
The data, provided by Valliance, stated that 30 per cent of respondents’ most common reason for AI project failure is being too focused on technology over business outcomes.
The research also noted that over one-fifth of businesses’ AI spend is attributed to external consultancies.
With the biggest firms, those spending over £100m on technology allocate an average of £53.08m towards AI projects alone, meaning they spend more on consultants (£11.30m) annually than a third (31 per cent) of enterprises do on any technology at all.
Board member, Shaun Khubchandani, stated: “Enterprises are under increasing pressure to realise measurable returns on their AI investments, and legacy models built around billable hours simply aren’t fit for that purpose.”
This comes as the professional services sector is currently in crisis mode, struggling to keep up with the new AI-driven world. There has been a lot of noise lately about job cuts at the Big Four firms, the graduate recruitment ladder being pulled up, and the firm’s struggles with its pricing, while certain firms struggle with profitability.