Enterprise AI
June 13, 2024

Generative AI Consultants vs. Vendors: Finding the Best Fit for Your Business

Wondering if you should go with an AI consultant or software vendor? Discover the pros and cons of both to see which one is right for your business.
Generative AI Consultants vs. Vendors: Finding the Best Fit for Your Business

Healthcare, insurance, and banking companies struggle to manage large volumes of data and ensure compliance. Although generative AI is a promising solution, it adds another layer of complexity

The key lies in choosing between generative AI consultants and software vendors. 

Consultants provide strategic advice for AI implementation, offering short to medium-term engagements. They help identify AI opportunities and develop strategies but don't create or maintain AI systems.

AI software vendors offer more comprehensive, long-term solutions. They provide customizable AI tools and platforms, along with ongoing development, implementation, support, and updates. 

Key Takeaways

  • Generative AI consultants offer strategic advice and short to medium-term engagements but don't develop or maintain AI systems.
  • AI software vendors provide comprehensive, long-term solutions, including AI tool development, implementation, and maintenance.
  • Consultants provide industry insights and strategic planning but lack the technical implementation and long-term support offered by vendors.
  • AI software vendors offer scalable, customizable solutions that integrate seamlessly into existing systems and support ongoing updates.
  • Choosing between consultants and vendors depends on whether your business needs strategic planning or long-term, scalable AI solutions.

Generative AI Consultants vs. Software Vendors: What’s the Difference?

5 differences between consultants and software vendors

Our potential clients are often not sure if they need a generative AI consultant or an AI software vendor.

To better understand which one fits your needs, we’ve compiled a list of differences between the two.

  • Customization and development: Software vendors like us develop and maintain AI solutions tailored to specific industry needs. Consultants provide advice on AI strategy and implementation but typically don't develop or maintain the actual software.
  • Strategic guidance and expertise: While consultants offer strategic advice, software vendors often provide both technical expertise and strategic insights specific to their AI solutions. For example, we offer consultative services to help businesses develop their AI strategy.
  • Long-term support: Software vendors usually offer ongoing support, updates, and maintenance for their AI solutions. Consultants typically have shorter-term engagements focused on initial strategy and implementation planning.
  • Industry-specific solutions: Leading software vendors develop AI solutions with deep industry knowledge, addressing specific challenges in sectors like healthcare, insurance, and banking. Consultants may have broad industry knowledge but often lack the specialized technical expertise of focused software vendors.
  • Cost-effectiveness and ROI: While consultants may have higher initial costs for strategic planning, software vendors often provide more cost-effective solutions with quicker deployment and clearer long-term ROI.

Artificial Intelligence Consulting Companies

5 examples of AI consulting companies

If you’re considering partnering with an AI consulting company, here are some good options in the US:

  1. McKinsey & Company: Known for their AI and analytics consulting services, they help businesses develop AI strategies and implement AI solutions across various industries.
  2. Accenture: Accenture provides comprehensive AI services, ranging from strategy formulation to implementation and maintenance. 
  3. Bain & Company: Bain offers consulting services focused on using AI to help companies achieve their goals by combining business strategy and technical expertise.
  4. Deloitte: Deloitte provides AI consulting services, helping organizations develop AI strategies and implement AI solutions across different business functions.
  5. PwC: PwC offers AI consulting services to help businesses understand and implement AI technologies to drive growth and efficiency.

What Does a Generative AI Consultant Do?

Generative AI consulting companies primarily provide strategic advice and guidance to businesses looking to integrate AI technologies.

Here are the main functions of a generative AI consultant:

Strategic Planning and Assessment

AI consultants analyze a business's goals, challenges, and infrastructure to identify opportunities for AI to provide value. 

This involves:

  • Analyzing current processes
  • Assessing the availability and quality of data
  • Estimating potential ROI from AI investments

Recommendation of AI Solutions

Instead of developing custom AI models themselves, consultants typically recommend existing AI solutions or suggest partnering with AI software vendors. They help businesses understand which AI technologies might best address their specific challenges.

Implementation Planning

Consultants create plans for implementing AI solutions, but they usually don't handle the technical details themselves. 

This may include:

  • Outlining necessary infrastructure changes
  • Suggesting ways to integrate AI tools with existing software
  • Advising on data pipeline setup

Training and Support

To maximize AI's benefits, consultants sometimes provide training and support to your internal team. This helps your employees understand how to use AI tools effectively and make data-driven decisions.

Performance Evaluation Framework

Consultants may suggest metrics and methods for evaluating AI performance, but they typically don't perform ongoing monitoring or system improvements.

While consultants can provide valuable strategic advice, they often lack the technical expertise and long-term commitment that AI software vendors offer.

How Much Do Generative AI Consultants Charge?

The cost of hiring generative AI consultants varies widely depending on several factors:

  • Project complexity
  • Consultant's expertise
  • Duration of the engagement
  • Scope of services

“The cost depends on the project. They start at $500,000 and go to $2 million to $5 million,” Goetz said. “For a three phase project, the cost can range from $10 million to $50 million.” - Michael Goetz, Vice President and Principal Analyst at Forrester Research

Large consulting firms often charge significant fees, potentially reaching millions of dollars for comprehensive AI strategy and implementation advice. Note that these high costs typically don't include the actual development or long-term maintenance of AI solutions.

What to Love and Hate About AI Consultants

AI consultants advantages and disadvantages

When considering working with AI consultants, weighing the benefits against the drawbacks is important.


Some of the main reasons why businesses work with AI consultants include:

  1. Strategic guidance: AI consultants offer specialized knowledge and experience in AI strategy. They deeply understand AI technologies, implementation best practices, and potential pitfalls. This expertise helps businesses develop comprehensive AI roadmaps aligned with their overall business objectives. 
  2. Industry insights: Consultants often have experience working across multiple companies within specific sectors. This broad exposure allows them to provide valuable perspectives on AI trends and applications within particular industries. They can share case studies, benchmarks, and lessons learned from similar implementations.
  3. Flexibility: AI consultants adapt their approach to different client needs and projects. Consultants can tailor their services accordingly if a company needs help with initial AI strategy development, specific use case implementation, or scaling existing AI initiatives. This flexibility allows businesses to engage consultants for targeted support without committing to a full-scale, long-term engagement.


A few reasons why businesses might avoid this option include:

  • Limited technical implementation: While AI consultants excel at strategy and planning, they typically don't develop or maintain actual AI software, which creates a significant gap between strategic recommendations and practical implementation. This means businesses need to find separate partners or build in-house teams for actual development, leading to additional costs and time requirements.
  • Dependency on external expertise: Relying heavily on external consultants can create a problematic dependency for businesses, potentially hindering their ability to independently develop and maintain AI solutions. Businesses might struggle to maintain or update AI solutions without ongoing consultant involvement.
  • Short-term focus: AI consultants often provide only initial strategy rather than long-term support, leading to a range of challenges in sustaining AI initiatives. This short-term focus leads to a lack of continuity in AI projects.

AI Software Vendors

5 examples of AI software vendors

AI software vendors might be a better alternative for your business than AI consultants.

Some examples of AI software vendors in the US include:

  1. Multimodal: We provide tailored AI solutions that automate business workflows using AI Agents, such as Decision AI. Our solutions help healthcare, insurance, and banking businesses make faster decisions while complying with new regulations. It’s worth noting that we can also develop strategies if clients explicitly request them.
  2. Google Cloud AI: Provides a comprehensive suite of AI and machine learning services that help businesses build, deploy, and scale AI models. Google Cloud AI supports many applications, from image and speech recognition to predictive analytics. 
  3. Microsoft Azure AI: Offers robust AI services, including pre-built models and customizable machine learning capabilities. Azure AI is known for its seamless integration with existing Microsoft products, providing solutions for cognitive services, bot services, and AI infrastructure.
  4. Salesforce Einstein: Embeds AI into the Salesforce platform, providing predictive analytics, natural language processing (NLP), and ML capabilities. It helps businesses automate customer service and marketing efforts to make data-driven decisions more accessible. 
  5. H2O.ai: Specializes in AI and machine learning platforms that democratize AI across organizations. Their open-source and automated ML platforms let businesses build and deploy AI models quickly and efficiently. 

What Do AI Software Vendors Do?

Some AI software vendors offer off-the-shelf solutions. Others develop and maintain fine-tuned AI solutions.

Some key functions of AI vendors can include:

  1. Creating tailored AI tools and platforms for unique business challenges
  2. Integrating AI solutions into existing business systems
  3. Providing ongoing support, updates, and improvements
  4. Offering technical expertise and strategic insights for AI implementation
  5. Ensuring AI solutions follow industry regulations and data privacy standards

How Much Do AI Software Vendors Charge?

Similar to generative AI consultants, the price will depend on various factors, such as the type of solution, the scale of the deployment, and the business's specific requirements.

Some vendors charge using a subscription model. Examples include IBM Watson and Microsoft Azure, which offer subscription plans that can range from a few hundred dollars per month to several thousand. The cost depends on the level of access and the number of users.

Meanwhile, other vendors use project-based fees. Purpose-built AI solutions can range anywhere from $6,000 to $300,000, which would cover all stages of the process, including:

  • Initial requirement analysis
  • Development 
  • Testing
  • Deployment
  • Maintenance

What to Love and Hate About AI Software Vendors

AI software vendor advantages and disadvantages

AI software vendors provide more of a long-term solution compared to generative AI consultants, but they also have their fair share of disadvantages.


Three of the main advantages of AI software vendors include:

  1. Ease of integration and deployment: AI software vendors like us develop tailored AI solutions tailored to specific industry needs. While integration complexity can vary, they work closely with businesses to ensure smooth deployment into existing systems.
  2. Scalability and Flexibility: They provide scalable solutions that can grow with your business. Cloud-based AI services like Amazon Web Services (AWS) let companies scale their AI capabilities up or down based on demand. 
  3. Cost-effective solutions: Vendors often offer competitive pricing models, including pay-as-you-go and subscription plans, which can be more affordable than developing custom AI solutions in-house. This helps businesses manage costs effectively, making advanced AI technologies more accessible. 


Cons of working with AI software vendors include:

  1. Higher initial investment: Implementing customized AI solutions from software vendors might require a larger upfront investment than AI consultants. This includes the cost of the AI tools and platforms and expenses related to integration, training, and potential infrastructure upgrades.
  2. Black box nature of AI models: AI solutions are often "black boxes," where the AI models' decision-making processes aren’t transparent. This is an issue for industries that require a clear understanding of how decisions are made, such as finance and healthcare, where transparency is crucial.
  3. Data privacy and security concerns: Some vendors require clients to transfer sensitive data to their infrastructure. This raises data privacy and security concerns, particularly for industries like healthcare and finance that handle highly sensitive information. However, this isn’t always the case. Some software vendors, like us, deploy solutions on client-owned VPCs or on-premise infrastructure.

Generative AI Consultants vs. Software Vendors: Which Should You Choose?

Although both options have their merits, software vendors are usually a better choice for most businesses. 

Vendors ensure that AI solutions are seamlessly integrated and maintained over time. This is essential for long-term effectiveness, which you won’t get with generative AI consultants since they generally don’t develop and maintain the software. 

Nevertheless, it’s important to have a strategy and an understanding of how AI will fit into your organization’s existing workflows. If you’re interested in partnering with an AI vendor to provide tailored, scalable, and cost-effective solutions, book a free 30-minute call with our experts.

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