Optimizing Your AI Budget for 2025: Key Tips and Strategies

In 2024, 60%* of enterprise Generative AI investments are drawn from innovation budgets. As you plan, will these costs still be considered innovation, or will they shift to OPEX?

If your aim is to include Generative AI in your OPEX, it suggests a focus on proven ROI—while innovation budgets often allow more flexibility regarding returns.

In this newsletter, we provide key considerations before integrating enterprise Generative AI costs into your 2025 OPEX budget.

Assessing Your Stage of Adoption

Early Stage? In the short term, select a use case with a clear business impact. Medium term: set up a pilot project to launch quickly. Test the use case and measure user adoption.

Key element to remember: Scaling up a pilot may seem straightforward initially, but the final stretch can be complex. The first 80% of development appears manageable; the remaining 20% consumes 80% of the effort.

To prepare, stress-test potential vendors by asking how they would handle more than six critical issues that we identified in 90% of projects. Find these questions in our Mastering AI Adoption recap by Squirro CEO Dorian Selz

Ranking the Most Valuable Use Cases

Organizations typically identify 10 potential use cases, reflecting ambitious goals. When considering OPEX, prioritization hinges on tangible ROI—through enhanced productivity and operational efficiency.

According to the Menlo VC report*, the dominant use cases for Generative AI include:

• Support chatbots
• Enterprise search and retrieval
• Data extraction and transformation.

What does this mean for organizations concretely in terms of tasks?

• Unlock and harness knowledge hidden within data silos scattered across organizations
• Connect emails, messaging apps, and document stores
• Deploy unified semantic search across systems for AI-powered knowledge management
• Provide knowledge-based support for employees and customers
• Support contact center agents with real-time guidance

ROI Expectations

Last week, we shared five real-world Generative AI use cases from highly regulated industries. Spanning finance to government, these examples demonstrate impactful change and enhanced efficiency. Select your use cases and access our detailed ROI data in our case studies.

• Banking: Save Hours in Minutes with AI-Powered Enterprise Search
• Wealth Management: Streamlining Client Advisory Services with GenAI
• Banking: Saving Millions in OPEX with AI-Driven Ticket Classification
• Development Finance: Investment Analysis & Due Diligence with AI
• Government: Enhance the Accessibility, Accuracy, and Cost of Information Retrieval for legal Research

FAQ: Build vs. Buy?

Deciding whether to build in-house or source from vendors? In 2024, companies are almost evenly split: 47% build, while 53% buy.

A few years ago, our approach for companies deciding to build their own solutions was to suggest they go ahead and gain firsthand experience with their engineering teams. In most cases, these companies contacted us a few months later, having consumed numerous engineering hours and resources, seeking support for the six specific challenges we mentioned earlier. Remember? The first 80% of development may seem straightforward, but the remaining 20% consumes 80% of the effort. That’s why we recommend stress-testing potential vendors—or your team—by asking how they would handle these six issues we at Squirro have identified in 90% of cases.

Today, our approach has evolved, and we strongly suggest considering the buy approach. Your perspective might change too:

• Is it part of your OPEX (focused on ROI) or your innovation budget?
• AI brings transformative change and competitive advantages—do you have the luxury of time in your market?
• Consider your total cost of ownership (TCO), including maintenance costs, technology evolution (like LLM model updates), deployment timelines, and whether you have sufficient in-house expertise

FAQ: Technical Considerations for Enterprise AI

Retrieval-Augmented Generation (RAG) now dominates AI design patterns, with 51% adoption. However, basic RAG isn’t sufficient for enterprise needs. To build robust, trustworthy AI that employees can rely on, you need to implement the following:

• Integrate guardrails at both the prompt and response levels to ensure corporate compliance
• Deploy access control lists across document management systems at scale
• Enhance RAG with knowledge graphs to deliver precise, accurate, and trustworthy answers

Get Your Free Technical Guide on GenAI for Knowledge Management! You'll discover the key tech foundations that make it all possible ??

Looking Ahead

These insights aim to support your budget planning for 2025. Still have questions? Contact our expert team—we’re here to help you navigate this exciting period with confidence.

*Data sources: Squirro’s experience and "Menlo VC 2024: The State of Generative AI in the Enterprise" - Non-exhaustive list of recommendations

Squirro listed among Top 100 Financial Technology Companies of 2024

Every year, The Financial Technology Report announces its selection of the top 100 financial technology companies, highlighting firms that deliver technological excellence across fintech categories, including digital banking and wealth management.We are proud to be included this year, highlighting our impactful work.

As our CEO, Dorian Selz, noted:"We have repeatedly demonstrated our platform’s ability to deliver value at scale – enhancing banking supervision, streamlining compliance, empowering client advisors with insights, and accelerating complex workflows like cross-border transactions."

Thank you to our team and clients for making this achievement possible!Read the full press release here: https://squirro.com/news-and-events/squirro-100-top-technolology-companies-2024

Next Week's Topic: Have It AllWhy compromise when you can have the right AI solutions that perfectly fit your needs?

Recognized by Gartner as a visionary company, Squirro stands at the forefront as an enterprise-ready generative AI solution for search, insights, and automation. Our clientele includes prestigious organizations such as:? the European Central Bank, the Bank of England, Henkel, Mubadala.

Thank you for being part of our journey. Stay tuned for more updates as we continue to bridge the AI reality gap!