As we edge closer to 2025, technology leaders find themselves at a crossroads, navigating through a mix of economic, technological, and geopolitical uncertainties. These challenges make the ability to plan — and adapt — paramount for the year ahead. Forrester’s high-performance IT model emerges as a beacon, advocating for a strategic mix of investments, divestments, and innovations tailored to each organization’s unique needs and aspirations and tightly aligned to the business strategy.
Regardless of the challenges we face, the strategic role of technology continues to march on. Accordingly, Forrester research reveals a current of optimism among technology decision-makers. A striking 91% of those decision-makers anticipate an increase in IT budgets for the upcoming fiscal year, resulting in a forecasted 5.3% growth in global tech purchases in 2024. This optimism is rooted in four strategic priorities: 1) enhancing personnel capabilities to meet future work demands; 2) expanding software investments to drive innovation; 3) ensuring infrastructure stability to support business performance; and 4) leveraging outsourcing to bridge skills gaps and enhance resilience.
Forrester’s Budget Planning Guide 2025: Technology Executives provides specific guidance on where to invest in these areas and where you may deprioritize spending.
Invest In Your Pragmatic AI Future
Last year, there was a lot of talk (and even more questions) about the AI revolution. This year, while we still firmly believe in an AI future, the pace is moderating as tech executives realize that they must navigate around concerns for AI skills, governance, security, and ROI. Forrester’s Budget Planning Survey, 2024, indicates a strong commitment among technology leaders to enhance their AI capabilities, with 92% planning to increase their budgets in areas such as data management and AI. Without a strategic approach rooted in high-performance IT principles, however, these investments risk being squandered. Key areas for investment to prepare for your AI future include investing in high-quality, well-governed data, establishing robust AI governance frameworks, creating a scalable and secure architecture, and developing a dynamic mix of skills. Additionally, prioritizing knowledge management can significantly boost employee productivity by streamlining access to information and fostering innovation.
Avoid Cloud Sprawl And Ruthlessly Automate Manual Processes
We’ve already mentioned the healthy budget increases for tech, but we must also recognize that global inflation is averaging 5.9% and will force tech executives to strategically reallocate IT budgets. Key strategies include establishing FinOps practices to manage cloud expenses effectively, utilizing cloud cost management and optimization tools for better visibility and cost optimization, and addressing the surge in VMware costs post-Broadcom acquisition by right-sizing and optimizing resources. Additionally, tackling technology sprawl and technical debt by rationalizing bespoke applications and isolated tech stacks is essential, with leading IT organizations allocating 10–30% of their budgets to reduce technical debt.
Experiment To Break Down Silos And Speed Time To Market
Every great strategy (and budget) requires new ways of thinking. Technology is no exception. Technology execs should experiment with numerous technologies and organizing constructs to build future value. For example, platform teams, by breaking down silos and enhancing tooling and infrastructure, pave the way for more cohesive and efficient application development. Multimodal generative AI promises to unlock creativity and tailor more personalized user experiences by processing diverse data types, thereby enriching content creation and customer interactions. Synthetic data is emerging as a pivotal resource for AI training, offering privacy-compliant, high-quality data while mitigating ethical concerns. Application generation platforms blend AI-assisted development with low-code approaches, significantly reducing software development time and costs. Additionally, as quantum computing looms on the horizon, investing in post-quantum security becomes crucial to protect against future data breaches, ensuring that sensitive information remains secure from quantum-computing attacks. These innovations not only promise to break down existing operational silos but also position organizations to lead in their respective markets through speed and adaptability.
Learn More
Forrester stands ready to help as you plan for 2025. Download the 2025 Budget Planning Guide for technology executives here, and register for our webinar on September 24, where a panel of analysts will address your questions and discuss these trends in more detail.
