CIOs will increase technology spending, and the priorities will be AI governance, cloud optimisation, and organisational financial plan update. The 2025 guide by Forrester suggests that 91% of technology decision-makers worldwide will spend more in the coming year, reversing the tight-fistedness of this year due to economic and geopolitical factors.
The optimistic budget forecasts will be beneficial to leaders as they head into 2025, says Sharyn Leaver, Chief Research Officer at Forrester, but they must be highly considerate of investments in areas that will help their firms grow generally.
Budgets on the Rise
The 2025 State of the CIO survey finds that 65% of organisations expect increased IT spending, with an average annual growth rate of nearly 6.9%. This is mainly increased through investments in AI, cloud computing, and digital modernisation. Although 65% anticipate increased budgets, 24% anticipate no changes in funding, meaning budgets will not be reduced as much as in other economic times. It is important to note that 31% of participants cited AI and machine learning as the primary factors driving increased investment.
According to industry trends, 54% of CIOs have indicated that their budgets are on the rise, and most anticipate an average growth of 17% as more companies invest in new technologies. Moreover, surveys conducted by Business Insider show that 90% of CIOs and IT specialists intend to increase their AI spending in 2026, a significant increase compared to past years, and that more companies are already using AI in the production process.
These changes indicate a strategic shift: technology is not only about maintenance but also a major growth engine. It is critical to develop a competitive advantage, improve customer experience, and operational resiliency. CIOs are also becoming more focused on aligning digital investments with overall business results rather than only operational metrics.
Rapidly shrinking Trust
Although there is a lot of financial support, the confidence in IT to produce tangible outcomes is weak. Recent evaluations reveal that only 48% of digital initiatives meet their goals, and there remains a gap between experimentation and scaled value.
This loss of trust results from a number of overlapping problems identified in surveys by AICERT, HubSpot, and Zylo: lack of governance, skills gap, a complex ecosystem, and disproportionate value delivery. Governance loopholes in pilot projects are usually characterised by a lack of clear baselines and metrics, making ROI hard to measure. Strategic innovation is not receiving adequate attention from CIOs, who are spending disproportionate time on talent shortages and operational issues.
Multifaceted ecosystems, shadow IT, SaaS sprawl, and decentralised decision-making dilute control, making it hard for CIOs to manage costs and impacts. Although AI promises productivity, the benefits are distributed unequally and are harder to quantify, making it hard to be confident in expected returns.
The New Mandate of the CIO
Contemporary CIOs need to successfully integrate innovation, governance, and business leadership. Budgets are rising as digital strategy is now a necessity for achieving a competitive advantage. Nevertheless, to win trust, it is necessary to show a clear, quantifiable difference that justifies spending. Looking ahead to 2026, the winners will be those technology leaders who can turn massive investments into responsible value and recertify belief in the payback from digital transformation.
