Less than half of digital initiatives are meeting or exceeding their business outcome targets, indicating a significant gap between investment and return on digital transformation.
The Gartner survey found more than 80% of CIOs report plans to increase investments in key technologies including cybersecurity, AI, GenAI, business intelligence, data analytics and integration technologies like APIs.
These areas are considered foundational to building a robust digital infrastructure and are expected to play a central role in organizational growth and resilience.
Rakesh Jayaprakash, chief analytics evangelist at ManageEngine, explained in recent years, organizations have aggressively increased spending.
However, with growing economic uncertainties, companies are now adopting a more cautious approach, shifting their focus toward maximizing value from existing investments.
“Business leaders recognize that significant automation and value can be unlocked from current tools if systems are better integrated,” he said.
He added CIOs are increasingly aware of the untapped potential in the data within their IT applications and are looking to leverage it for informed decision-making and automation.
This integration is a low-hanging fruit for CIOs because it requires minimal additional financial investment; the main cost is the human effort needed to understand and connect these systems.
“By enabling communication between applications, organizations can expand the capabilities of their existing products, achieving greater efficiency and value without making new investments,” Jayaprakash said.
A third of CIOs plan to increase investment in legacy systems, often to support experimental GenAI projects with on-premises infrastructure, and just 16% of CIOs said they plan to focus on building an enterprise-wide technology workforce outside of their IT departments.
The survey cautioned this limited prioritization could restrict organizational capacity to fully leverage digital investments and potentially keep the success rate of digital initiatives low.
Additionally, just 18% of CIOs indicated they will prioritize sharing technology leadership with other business units.
Rethinking Cloud First Strategies
The report found 43% of CIOs indicated they would cut spending on legacy infrastructure and data center technologies, reflecting a continued shift towards cloud-based solutions.
Haseeb Budhani, CEO and co-founder of Rafay Systems, said although many enterprises have been cloud-first for a while, AI is making CIOs rethink their “cloud first” stance.
“In the world of AI, data is an enterprise’s most important asset, and enterprises seem to want to keep their data in private data centers,” he said.
As a result, many enterprises are looking at alternative options to the traditional public cloud option.
“In my estimation, the market has shifted from cloud first to hybrid,” Budhani said.
Rich Waldron, CEO and co-founder of Tray.ai, pointed out the overwhelming complexity of modern enterprise software stacks has made integration technology a top priority for CIOs heading into 2025.
He said the traditional approach of departments operating independent tech stacks and point solutions has created a critical challenge.
“Organizations must now manage hundreds of disconnected applications and data services while simultaneously tackling ambitious AI initiatives requiring petabytes of unstructured data,” he said.
This means the focus has moved from simple data collection to meaningful action through integration.
He added legacy IT infrastructure continues to burden enterprise transformation efforts.
Departments have accumulated numerous point solutions over time, fragmenting data and limiting cross-functional collaboration, and the challenge intensifies as organizations push to harness AI capabilities amid this technical sprawl.
“The most successful organizations have taken a fundamentally different approach,” Waldron said. “They’ve embedded innovation into their culture while streamlining their technology foundation.”
From his perspective, the speed of adapting to change has become the key differentiator, and those organizations that can rapidly prototype, measure results and scale initiatives are the ones hitting their business targets.
“For those falling short, it often comes down to an inability to move quickly enough or having to navigate extremely complex environments,” he said.
