Enterprises must partner with consulting firms for Al'

IBM Consulting is crucial in the technology giant's growth. According to IBM's 2024 annual report, 80 per cent of its artificial intelligence (AI) bookings were fuelled by Consulting. The unit earned $20.69 billion as revenue in 2024, but growth has softened due to macroeconomic uncertainty. Mohamad Ali, senior vice-president at IBM Consulting, believes AI will be "net positive" despite the softness in demand. Ali, in a video interview with Shivani Shinde, talks about consulting and layoffs at IBM. Edited excerpts:

- Compiled by Shivani Shinde

Do you see the current softness in consulting getting resolved and by when?

■ It's very hard to predict what will happen with the global economy. Much of it depends on factors unrelated to AI or technology—like trade policies and other macroeconomic forces. My assumption is that it will take some time before we return to a period of strong GDP growth. Until then, many economies will remain muted, which means continued budget constraints.

I think a second scenario is more likely to happen: Companies will need to prioritise their investments, especially in AI, over other areas. And that's exactly what we're seeing in consulting.

--We are seeing tremendous growth in AI. It now represents about one-third of our business, by far the highest proportion among our competitors. But there are other areas where clients are de-investing. The net result is a muted consulting market overall, even as investment shifts toward AI.

Given reports that only about 5 per cent of companies have derived real value from AI, shouldn't consultants have been more aggressive?