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"Buyers are calling AI consulting a scam. I think they're mostly right."

A state government agency just published a page telling Victorian small businesses how to protect themselves from AI scams. In the same week, a thread asking whether AI consultancy services are a scam blew up on an Australian corporate forum, and a post calling AI consulting "a scam" got real traction. The post that spread named the tell: consultants quoting 9 to 12 months to "set something up". I don't think buyers are being paranoid. I think the market trained them to be.

A state government agency just published a page telling Victorian small businesses how to protect themselves from AI scams. In the same week, a thread asking whether AI consultancy services are a scam blew up on an Australian corporate forum, and a post calling AI consulting "a scam" got real traction. The post that spread named the tell: consultants quoting 9 to 12 months to "set something up". I don't think buyers are being paranoid. I think the market trained them to be.

Why the fear is rational

I'll be straight with you. A lot of what gets sold as "AI consulting" in Australia right now is a packaging job. A 90-day engagement that delivers a deck. A 9 to 12 month "transformation" with no milestones anyone can check. An hourly rate with no idea what you'll actually own when it ends. If someone has been burned by that once, you can't blame them for reaching for the exit the moment a proposal says AI.

The sharpest version of this landed on Hacker News this month. A CFO said he was replacing a $100k/yr niche ERP/CRM. The consultant who had built it was, in his words, "not even a programmer". And the room agreed with him. That isn't a forum being cynical. That's the C-suite starting to price the risk of the relationship itself.

The bar should be simple, and most offers fail it. Show me the working: fixed scope, fixed fee, a named person, and evidence of something that shipped.

What the fear is actually hiding

Here's the part that bugs me. The scepticism is doing real damage, because the people walking away from AI consulting after one bad story are exactly the businesses where AI pays off most.

The numbers from this week's research: about 62% of Australian SMEs have not meaningfully adopted AI. Among micro businesses, only about a third have. Deloitte puts the opportunity at roughly $44B a year to the Australian economy, and of the SMBs that have adopted, only 5% are "fully enabled" to capture it. The 61% of adopters who report improved efficiency are the proof it works. The rest are the trust gap, priced in.

So the real question for a Melbourne SME isn't "is AI consulting a scam?" It's "how do I find the vendors who'll put a fixed fee on it and show me the working?"

What a real engagement looks like

This is how I'd buy it, and it's how we sell it at iotasol.

1. Fixed fee, fixed scope, weeks not months. A 2 to 3 week readiness pass: maturity score, data readiness gap, 5 to 15 use cases ranked by payback, an ROI model. You know the price before we start. The AU market already anchors this: fixed-fee SMB audits run $2.5k to $15k, boutique hours $250 to $500/hr. Anything that can't be scoped is a red flag.
2. Quick win first. The first thing built should be something you can use within a month, not a 12-month roadmap. If a vendor can't point to a shipped example in your industry, ask why.
3. The data stays home. For a professional services or regulated firm, local-first isn't a preference, it's the architecture. The model runs on your hardware, your documents don't leave the building, and there's no per-token bill following you forever.
4. You own the outcome. The roadmap, the code, the configuration. It's yours when it ends, not a licence to their IP.

The scam test is three questions: what exactly do I get, for how much, by when? What do I own when it ends? Where does my data live? A real vendor answers all three before you've finished asking.

The question to ask this week

If you've been sitting on AI because every quote you've seen smelled like a 12-month invoice, that was a rational decision. But the cost of waiting is now measurable: $44B a year in the economy, and your competitors' efficiency gains compounding every quarter.

We do a fixed-fee readiness pass for Melbourne SMEs. Two to three weeks, a roadmap ranked by payback, the first quick win scoped. No deck, no twelve months. Happy to walk you through it in 30 minutes. Bring the last AI quote you got, and I'll tell you where it's broken.

You Dream, We Build.

Sources

Ravijeet Dang — AI-first business leader. This piece also appears on Substack and LinkedIn.

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