Companies are making AI a core business strategy - here’s why - Blog

AI has come a long way from being an experimental novelty. It’s becoming an integral part of business strategy.

If the latest data is anything to go by, the shift from "nice-to-have" to "must-have" is not just happening - it’s accelerating. According to Ramp’s Summer 2024 Spend Report, we’re seeing more businesses not only adopting AI but committing to it long-term.

A year ago, less than half of the companies that purchased AI products were still using them a year later. Today, that retention rate has jumped to over 70%. This is no small feat. It signals a broader shift in how businesses view AI: not as a risky experiment, but as a reliable partner in driving growth, efficiency, and innovation. And it’s not just about keeping the lights on. Companies are doubling down on AI, with spending skyrocketing across the board.

This post dives into the key insights from Ramp’s report, exploring how AI is transforming from a tool of experimentation to a cornerstone of business operations, and what this means for companies moving forward.

From experimentation to long-term commitment

The numbers in Ramp’s report are telling. AP spending with AI vendors has surged by a staggering 375% year-over-year. What this suggests is that businesses are no longer just dipping their toes in the AI waters - they’re diving in headfirst, and they’re making it a long-term investment.

Case in point: Walmart has integrated AI into its supply chain management, reducing costs and improving efficiency. It’s a move that has turned AI from an experimental tool to a core component of its operations.

This kind of spending reflects a growing confidence in AI’s ability to deliver real, measurable value, far beyond the initial hype.

__wf_reserved_inherit — Source: Ramp Summer 2024 Spending Report

But why this shift? It seems to be more than just about chasing the latest tech trends. Companies are starting to see tangible returns on their AI investments. AI is proving its worth, whether it’s:

automating routine tasks
enhancing decision-making processes
or driving innovative new solutions.

According to Google’s recent The ROI of Gen AI report, 74% of enterprises using generative AI report achieving ROI within the first year, with 86% of those reporting increased revenue noting a 6% or more increase in revenue.

AI technology has matured, and with it, the ways in which businesses are integrating AI into their core operations.

For companies looking to stay competitive, the message is clear: it’s time to move beyond the pilot projects and start thinking about how AI can be woven into the fabric of your business.

This means identifying key areas where AI can make a difference, whether that’s in customer service, supply chain management, or product development. Then, commit to the tools and processes that will help you achieve long-term success. The companies that are making these moves now are the ones that will be leading their industries in the years to come.

Take Databricks, for example, who are making various processes more efficient by integrating Perplexity:

Anthropic’s rapid rise in market share

Anthropic has quickly become a standout in the AI space. Its market share has jumped from just 4% at the beginning of 2024 to a remarkable 17% in Q2.

This kind of growth is a clear indicator that businesses are not only aware of but actively seeking out alternatives to dominant players like OpenAI. Yes - OpenAI remains the leader. But Anthropic’s rapid rise suggests that the AI landscape is becoming more competitive, particularly in the realm of foundation model inference.

What’s driving this adoption? A few likely things:

Safety and ethics: In a world where concerns about AI bias and decision-making transparency are growing, businesses are increasingly looking for AI solutions that align with their values of responsible innovation. Anthropic’s models are designed with these concerns in mind, making them particularly appealing to companies that prioritize ethical considerations in their AI deployments.

Quality and usability: Anthropic’s AI assistant, Claude, is growing in popularity. Users praise it for its ability to understand complex queries and provide insightful, contextually relevant responses. With new Claude features being added at a rapid pace, it’s easy to see why it’s becoming popular for productivity and decision-making processes.

Developer-friendly: Anthropic’s platforms are designed to be accessible and easy to integrate - a particularly appealing feature for businesses that want to quickly deploy AI without extensive customisation.

For businesses, the takeaway is clear: it’s worth keeping an eye on emerging players like Anthropic, who are not only gaining traction but also pushing the boundaries of what AI can do in a responsible and sustainable way. Exploring these options could lead to more aligned and forward-thinking AI strategies, especially in industries where trust and ethics are critical.

Fastest-growing AI vendors

The AI vendor landscape is shifting rapidly, and the fastest-growing players are offering solutions that resonate with businesses of all sizes. According to the Ramp report, vendors like Perplexity, Framer and Instantly are among the top performers, each making significant strides in different segments of the business world.

Perplexity

The AI-powered search engine seems to have found its sweet spot in the large SMB and mid-market sectors. These companies are likely drawn to Perplexity’s advanced data processing capabilities and insights - which give them the edge they need to stay competitive - plus its focus on customer data protection and security.

Framer

Framer’s seeing rapid growth, particularly with businesses looking to streamline their design and prototyping workflows. Its tools are user-friendly yet powerful, allowing teams to create interactive designs without the need for extensive coding skills. It’s becoming a go-to choice for businesses aiming to speed up their product development cycles.

Instantly

By simplifying and automating outreach and customer engagement processes, Instantly allows businesses to scale their customer interactions efficiently - in turn freeing up time and resources for more strategic activities. This has made Instantly popular with companies looking to enhance their marketing and sales efforts without adding significant overhead.

For businesses evaluating AI vendors, these trends suggest that it’s worth exploring the solutions offered by these fast-growing companies. They are clearly resonating with other businesses and could offer the innovative edge needed to stay competitive in today’s environment.

Why businesses are making AI a permanent part of the plan

One of the most telling trends in the Ramp report is the significant increase in AI product retention rates.

Just a year ago, less than half of the businesses that started using AI tools were still committed to them after 12 months. Fast forward to today, and that retention rate has surged to over 70%. This shift signals a major change in how businesses perceive and use AI.

What’s behind this jump in retention?

The core of business ops

First and foremost, AI tools are becoming more integrated into daily workflows, moving from the periphery to the core of business operations. Companies are no longer just testing the waters; they’re finding real, sustainable value in these tools.

Whether it’s through enhanced productivity, better decision-making, or innovative problem-solving, AI is proving its worth in ways that go beyond initial expectations.

Better usability

Another factor contributing to higher retention rates is the improved usability and accessibility of AI tools. Vendors are continually refining their products, making them more user-friendly and easier to implement. This reduces the friction associated with adopting new technology, leading to a smoother, more successful integration process.

Additionally, as businesses become more familiar with AI, they’re better equipped to measure its impact and adjust their strategies accordingly. This continuous improvement loop - where businesses learn, adapt, and optimise their AI usage - leads to deeper engagement and a higher likelihood of long-term commitment.

To wrap things up, the key takeaway here is: the more you integrate AI into your core operations, the more value you’re likely to extract. It’s about moving beyond experimentation and focusing on how AI can become a fundamental part of your business strategy. With retention rates climbing, it’s evident that the businesses that stick with AI are the ones reaping the most rewards.

Curious how AI could benefit your business operations? Dive into the Ben’s Bites catalog of AI courses and tutorials to learn more.