As 2025 approaches, technology leaders face a crossroads, navigating a mix of economic, technological and geopolitical uncertainties. Given these challenges, the ability to plan and adapt for the year ahead is paramount.

Despite the challenges we face, the strategic role of technology continues to grow in importance. Accordingly, Forrester’s study shows that optimism prevails among technology decision makers. A remarkable 91% of these decision makers expect to increase IT budgets in the coming fiscal year, leading to a projected 5.3% growth in global technology purchases in 2024. This optimism is rooted in four strategic priorities: 1) improving workforce 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 close skills gaps and increase resilience.

Invest in your pragmatic AI future

Last year, there was a lot of talk about the AI ​​revolution (and even more questions). This year, while we still firmly believe in an AI future, the pace is slowing as tech leaders recognize they need to address concerns about AI capabilities, governance, security, and ROI. Forrester’s 2024 Budget Planning Survey shows a strong commitment from tech leaders to improve their AI capabilities, with 92% planning to increase their budgets in areas like data management and AI. But without a strategic approach grounded in high-performance IT principles, these investments risk being wasted. Key investment areas to prepare for your AI future include investing in high-quality, well-managed data, establishing robust AI governance frameworks, creating a scalable and secure architecture, and developing a dynamic skills mix. Additionally, prioritizing knowledge management can significantly increase employee productivity by optimizing access to information and encouraging innovation.

Avoid cloud sprawl and consistently automate manual processes

We have already mentioned the hefty budget increases for technology, but we must also remember that global inflation is averaging 5.9% and will force technology managers to strategically reallocate their IT budgets. Key strategies include adopting FinOps practices to effectively manage cloud spend, leveraging cloud cost management and optimization tools for better visibility and cost optimization, and managing the rise in VMware costs following the Broadcom acquisition by right-sizing and optimizing resources. In addition, it is imperative to combat technology sprawl and technical debt by rationalizing bespoke applications and siloed technology stacks, with leading IT organizations allocating 10-30% of their budgets to reducing technical debt.

Experiment to break down silos and reduce time to market

Every great strategy (and budget) requires new ways of thinking. Technology is no exception. Technology managers should experiment with numerous technologies and organizational constructs to create future value. For example, by breaking down silos and improving tools and infrastructure, platform teams are paving the way for more cohesive and efficient application development. Multimodal generative AI promises to unleash creativity and design more personalized user experiences by processing different types of data, enriching content creation and customer interactions. Synthetic data is emerging as a key resource for AI training, offering privacy-compliant, high-quality data while addressing ethical concerns. Application generation platforms combine AI-powered development with low-code approaches, significantly reducing software development time and costs. Additionally, with quantum computing on the horizon, it will become critical to invest in post-quantum security to protect against future data leaks and ensure sensitive information remains safe from quantum computing attacks. These innovations promise not only to break down existing operational silos, but also to enable companies to lead in their respective markets through speed and adaptability.

Take a closer look at these recommendations and learn where to invest your technology spend to improve performance, drive growth and gain competitive advantage with the 2025 Budget Planning Guides. Here.

This article was written by VP, Research Director Matthew Guarini and originally appeared Here.