Forrester: IT budget growth pushed towards cross-functional teams

IT leaders plan to spend more in 2025 compared to 2024, the Budget planning guides from analyst Forrester has reported.

The report, based on a survey of 2,200 business and technology leaders, found that 91% of global tech decision-makers and 87% of global marketing decision-makers are planning for budget increases in the year ahead, despite high interest rates and tight labour markets.

The survey found that in organisations where marketing, digital, and customer experience (CX) teams are highly aligned, survey respondents reported 1.6x faster revenue growth than their peers and 1.4x better customer retention.

In a blog post, Forrester vice-president and group director Laura Koetzle recommended that business and IT leaders help ensure functional alignment around customer journeys by investing in a shared journey map and prioritising key journeys. She urged technology and business leaders to hire an outside partner to assist and train the team if necessary.

Continuing the theme of cross-functional collaboration, Forrester recommended that platform teams break down silos and innovate. These cross-functional product-centric teams build and maintain tooling, infrastructure, and services, enabling other IT and business teams to build, deploy and manage their applications. According to Forrester, platform teams deliver value to stakeholders by improving alignment and eliminating bottlenecks.

Koetzle urged technology leaders to reduce their organisations’ footprint of bespoke or isolated tech stacks: “Years of teams building and maintaining their own applications or insisting on idiosyncratic ‘ideal’ architectures has resulted in massive technology sprawl and technical debt. This results in unsustainable cost, support, security and training overhead.”  

Koetzle recommended that IT leaders prepare an inventory of their bespoke applications and isolated infrastructure where this IT infrastructure is only used to support a few applications. Although some upfront investment is needed, she recommended that these applications should be replaced.

Another area of investment identified by Forrester is artificial intelligence (AI) governance and trust. As AI deployments become ubiquitous, firms believe they should invest in building policies and frameworks around data access, usage, sharing, storage and retention to retain customer and employee trust. This also requires security and privacy investments in approaches such as advanced encryption, data masking, differential privacy and data clean rooms.

“To retain the trust of customers and employees as you deploy AI, identify and prioritise the levers of trust that matter most to them in your context,” Koetzle added.

Beyond AI governance, Forrester said that IT and business leaders should use AI-powered chatbots to support buying, selling and internal marketing processes. While some AI chatbots are already being used in this way, Koetzle urged technology and business leaders to design AI assistants to have skills that support go-to-market teams with information retrieval, task automation, insights exploration, and recommendations that drive precision, productivity and scale.

Sharyn Leaver, chief research officer at Forrester, said: “While leaders should continue to experiment with more advanced AI capabilities in 2025, those shouldn’t be the only experiments they pursue. They should prioritise investments that benefit their entire firm and help establish long-term trust with customers and partners.”

Among the areas Forrester believes will see a decline in spending during 2025 is what it calls “journey-mapping without a purpose”. According to Forrester, customer experience leaders often struggle to build momentum and drive action from their mapping efforts. Forrester recommended scaling back any journey-mapping initiative that lacks a clear objective, an executive champion or customer insights.