A research report conducted just prior to the passing of US tariffs ) from the Boston Consulting Group (BCG) points to a notable increase in IT budgets for 2025, with a projected growth of 4.6%, a significant jump from the 3.5% growth in 2024. This surge in spending reflects a strategic shift towards emerging technologies, with artificial intelligence (AI), generative AI (GenAI), cloud computing, and security infrastructure leading the charge. Conversely, traditional IT components such as server infrastructure and personal devices are experiencing a decline in investment.
AI Agent Adoption and ROI
AI agents, defined as, “sophisticated programs capable of autonomous decision-making and action”, are rapidly gaining traction in the corporate landscape. The BCG survey indicates that 58% of companies have already integrated AI agents into their operations, while another 35% are actively exploring potential applications. Customer service emerges as a primary domain for AI agent deployment, with 53% of companies leveraging these intelligent systems to enhance customer interactions. Notably, AI agents are delivering a substantial return on investment (ROI) of 13.7%, surpassing the ROI of non-agentic GenAI applications.
Generative AI Implementation and Maturity
Generative AI, a subset of AI that focuses on creating new content and ideas, has witnessed widespread adoption, with 81% of companies reporting some level of implementation. A key finding of the BCG study is the correlation between AI maturity and ROI, with companies demonstrating advanced AI capabilities reaping greater financial rewards. While data security concerns initially posed a significant barrier to GenAI adoption, the current challenges have shifted towards identifying suitable use cases and effectively managing AI talent.
Key Insights and Future Outlook
The 2025 BCG survey underscores a transformative phase in the IT industry, characterized by a pronounced emphasis on AI and its diverse applications. As organizations continue to navigate this evolving landscape, strategic investments in AI, GenAI, cloud services, and security infrastructure will be pivotal for maintaining a competitive edge. The growing adoption of AI agents and the substantial ROI they offer highlight their potential to reshape business operations and customer engagement. Furthermore, the correlation between AI maturity and ROI emphasizes the importance of cultivating advanced AI capabilities. While challenges persist in terms of identifying optimal use cases and managing AI talent, the overall trajectory suggests a future where AI plays an increasingly integral role in driving business value and innovation.
Strategic Enterprise Priorities:
- Advanced analytics and predictive AI:
- Machine Learning advancements: Increased accuracy and sophistication of models
- Predictive Modeling: Widespread use for forecasting and decision-making
- Real-time Analytics: Immediate insights for agile business responses
- Data Mining: Uncovering hidden patterns and trends in vast datasets
- Enhanced AI infrastructure:
- Cloud Computing: Scalable and accessible AI resources
- Specialized Hardware: GPUs and TPUs for accelerating AI workloads
- AI Platforms: Streamlining development and deployment of AI solutions
- Data Management: Efficient storage and processing of massive datasets
- Cybersecurity innovations:
- AI-powered Threat Detection: Identifying and responding to threats in real-time
- Zero Trust Security: Strict access controls and continuous authentication
- Blockchain Technology: Secure and transparent data management
- Quantum-resistant Cryptography: Preparing for future computing threats
- Process automation:
- Robotic Process Automation (RPA): Automating repetitive tasks
- Intelligent Automation: Combining AI and RPA for complex processes
- Workflow Automation: Streamlining business operations
- Hyperautomation: End-to-end automation across the organization
- Customer experience transformation:
- Personalization: Tailoring experiences to individual needs
- Omnichannel Engagement: Seamless interactions across multiple channels
- Chatbots and Virtual Assistants: 24/7 customer support
- Sentiment Analysis: Understanding customer feedback in real-time
Two Significant and Interconnected Trends:
- Increased Investment in Competitive Technologies- Companies are significantly increasing their investment in technologies that can give them a competitive edge. This includes:
- AI and Generative AI: These technologies have the potential to completely transform business operations and customer experiences. Companies are recognizing this potential, with 80% of surveyed companies having already adopted some level of Generative AI.
- Cloud Services and Security Infrastructure: Cloud computing and robust security measures are essential for achieving scalability, resilience, and safe and reliable operations. They are also foundational for implementing and utilizing transformative technologies like AI.
- Analytics: Advanced analytics enable businesses to generate actionable insights, optimize processes, and improve strategic planning.
- Interconnectedness of Technological Advancements – The increased investment in these technologies is not happening in isolation. These technological advancements are deeply interconnected and mutually reinforcing:
- Cloud computing provides the infrastructure and scalability needed to support AI and advanced analytics.
- AI and analytics can be used to enhance cloud security and optimize cloud resource utilization.
- The insights generated through analytics can inform AI model development and training.
In summary, businesses are recognizing the transformative potential of technologies like AI, cloud computing, and analytics. They are investing heavily in these areas to gain a competitive advantage. The interconnected nature of these technologies means that advancements in one area can drive advancements in others, creating a virtuous cycle of innovation and growth.
Although IT spending is increasing, budgets remain limited, leading to the prioritization of AI, cloud, and security initiatives over mature categories. This shift is evident in the deliberate reallocation of funds away from traditional software areas, like enterprise resource planning, and towards extending the lifespan of existing hardware. This balancing act between growth and savings is also apparent in the trend towards vendor consolidation. Companies are reducing their vendor base in most areas, opting for suite-based solutions over a patchwork of standalone tools to manage costs effectively. However, AI and GenAI, and to a lesser extent analytics, are exceptions to this trend. In these emerging areas, maintaining a broad vendor roster allows companies to experiment with different solutions and identify the most valuable ones.
Cost Management Strategies for Businesses:
- Strategic Vendor Consolidation in Mature Technology Areas:
- Evaluate current vendor contracts and identify areas where multiple vendors are providing similar services in mature technology areas.
- Consolidate contracts to a single vendor where possible to leverage volume discounts and simplify vendor management.
- Standardize technology solutions across the organization to reduce complexity and maintenance costs.
- Selective On-Premises Workload Repatriation for AI-Mature Companies:
- For companies with advanced AI capabilities, assess cloud workloads and identify those that could be more cost-effectively run on-premises.
- Leverage existing on-premises infrastructure and AI expertise to repatriate workloads where it makes financial and operational sense.
- Carefully consider data security, compliance, and latency requirements when making repatriation decisions.
- Balanced Investment Between Growth Initiatives and Cost Control:
- Avoid drastic cost-cutting measures that could stifle innovation and growth.
- Invest strategically in new technologies and initiatives that support business growth and drive long-term value.
- Implement robust cost tracking and reporting mechanisms to monitor spending and identify areas for optimization.
- Foster a culture of cost consciousness across the organization, encouraging employees to identify and implement cost-saving ideas.
Additional Cost Management Strategies:
- Cloud Cost Optimization:
- Rightsize cloud resources to match actual usage and avoid overspending.
- Implement cloud cost management tools to track spending and identify areas for optimization.
- Leverage cloud provider discounts and reserved instances to reduce costs.
- Energy Efficiency:
- Upgrade to energy-efficient equipment and appliances.
- Implement energy-saving policies and practices.
- Explore renewable energy options to reduce energy costs and environmental impact.
- Process Improvement:
- Identify and eliminate inefficient processes that waste time and resources.
- Automate repetitive tasks to improve productivity and reduce labor costs.
- Streamline workflows to optimize resource utilization and reduce operational costs.
Cost management is an ongoing process. BCG advises customers to review their strategies and adjust them as needed to align with your business goals and changing market conditions. The BCG survey indicates a clear shift toward strategic advantage through AI implementation, with companies carefully balancing growth investments against cost optimization to maximize value from their IT spending.