CFOs set to boost tech budgets in 2025 despite challenges

A recent survey conducted by Gartner indicates that the majority of Chief Financial Officers (CFOs) are planning to significantly increase their technology budgets in 2025, despite ongoing economic and geopolitical disruptions.

The survey, which comprised responses from 301 CFOs and senior finance leaders globally, was conducted between September and October 2024. It revealed that 77% of the respondents intend to boost spending in the technology sector, with nearly half (47%) planning to increase their technology budget by 10% or more compared to the previous year. This trend underscores the essential role of technology in fostering profitable growth and enhancing efficiency across various industries.

In contrast, spending on staff compensation appears to be decreasing. Only 61% of CFOs plan to increase average employee compensation in 2025, compared to 71% in 2024 and 86% in 2023. Notably, the proportion of CFOs who anticipate a compensation hike of 10% or more has dropped from 16% in 2023 to 11% in 2025. While 70% planned for increases between 4% to 9% in 2023, only 50% expect to maintain similar figures in 2025.

Randeep Rathindran, Distinguished Vice President, Research in the Gartner Finance practice, commented, "The continued focus on technology aligns with developments in traditional and generative AI, which promise to drive new offerings, enhance decision-making, and boost productivity. Although the cooling labour market gives organisations more negotiating power on compensation, CFOs should remain sensitised to the potential risks of attrition and low engagement as prices for household necessities remain stubbornly high."

Most sectors are prioritising technology spending in 2025. The retail sector aims to increase its expenditure on the cost of goods sold (COGS) and compensation to improve product quality and customer interactions. In the banking sector, compensation and external services are prioritised to attract technical talent and to outsource nonstrategic work.

"Investing in technology is no longer a choice but a necessity for companies aiming to maintain a competitive edge," Rathindran stated. "The consistent increase in technology budgets across sectors highlights the ongoing strategic shift towards digital transformation as a driver of innovation and efficiency."

These findings reflect a sustained increase in technological spending over recent years – 50% of CFOs had already planned a 10% or more boost to their technology budget in the previous year, and 43% had similar plans in 2023. Rathindran further noted, "To maximise the value of technology investments, CFOs must collaborate with C-suite peers by driving technology investment discipline and building effective partnerships with CIOs."