Don’t Rush Digital Transformation: Pragmatism Over Panic in 2025
As technology progresses rapidly, leaders must take a step back and approach digital transformation with a clear, pragmatic mindset—not a sense of urgency. CTOs are under pressure like never before to tap into the potential of innovations like artificial intelligence while ensuring costs remain aligned with business value.
New technologies have the power to drive real change and give companies a competitive edge. However, without careful planning, the costs can quickly outweigh the benefits. The challenge companies face today is striking the right balance between innovation and financial discipline. Rushing through this process won’t get you there faster—it might just cause more problems.
Lessons From AI and Cloud Deployments
Companies see the importance of managing technology spending and risk to maximize returns on transformative investments. This focus is evident in the growing adoption of various holistic approaches to tech spend management that have visibility into the entire IT estate.
A growing number of organizations, including the FinOps Foundation itself, with its FinOps Scopes, see multiple approaches to managing tech spend, including cloud costs, data centers, and SaaS.
Artificial intelligence (AI) is now a cornerstone of some IT strategies. As highlighted in the Flexera 2025 IT Priorities Report, 46% of IT leaders prioritize AI integration for the upcoming year. With nearly three-quarters (74%) of IT professionals identifying emerging applications such as ChatGPT or Google Bard (Gemini) as an area of increased investment, not only are the budgets growing, but so is the scope.
While organizations see AI’s potential, prudent leaders hesitate to adopt it in ways that don’t provide business value. Many organizations rushed into AI pilots, leading to increased operational costs without a clear strategy for value realization.
Similarly, cloud adoption—which Gartner predicts will drive global IT spending to $5.26 trillion in 2024—often proceeded without adequate cost governance, resulting in significant overspending.
These examples demonstrate that successful digital transformation requires thoughtful planning, stakeholder alignment, and iterative implementation. I’m not the first to say it: rushing digital transformation can create impediments.
It merits close attention as it relates to AI. Overall, AI and generative AI (GenAI), in particular, offer extraordinary opportunities to create business value, but only if appropriate strategic planning is implemented and the right tools are selected.
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Challenges of Cost Optimization
Technology spending remains one of an organization's most significant cost centers. And overspending is a noteworthy problem; according to Flexera’s IT Priorities report, the average overspending ranges between 22% and 25% across cloud, SaaS, and infrastructure-as-a-service (IaaS) platforms.
Despite this, FinOps adoption—a critical practice for managing cloud costs—remains underutilized, with only 13% of IT leaders prioritizing it in the past year.
The rising costs of AI further exacerbate this issue. Compute-intensive models, particularly large language models (LLMs), contribute to resource saturation in cloud environments. Efficient workload management becomes an urgent priority, often without a corresponding increase in cost management capabilities.
Collaborate Across Departments
Digital transformation cannot succeed in silos. Effective implementation requires collaboration among IT, finance, and procurement teams. Stakeholders, including chief financial officers (CFOs) and chief procurement officers (CPOs), are creating a holistic view of technology investments and ensuring alignment with organizational goals. Implementing this approach requires the de-siloing of data and tech stacks, as recently highlighted by analyst firm Celent.
For example, IT teams may need more visibility into SaaS expenditures made by other business units. According to the Flexera report, 68% of IT leaders acknowledge that business units procure far more cloud and SaaS solutions than they know. Organizations can gain the insights needed to optimize spend and reduce redundancies by fostering cross-departmental collaboration and leveraging comprehensive technology intelligence platforms.
Embrace Opportunities for Pragmatic Innovation
Despite the challenges, AI and cloud technologies offer significant opportunities for innovation. Flexera’s report reveals that 91% of IT leaders view innovation as a top strategic priority, with many focusing on emerging applications like ChatGPT and Google Gemini to streamline operations and develop new revenue streams.
To maximize these benefits, organizations should adopt a pragmatic approach:
- Prioritize high-impact use cases: Focus on AI and cloud projects that address pressing business challenges or unlock measurable value, such as customer satisfaction improvements or operational efficiencies.
- Measure ROI beyond traditional metrics: Evaluate success using non-traditional indicators, such as brand visibility and customer loyalty, to capture the broader impact of AI initiatives.
- Invest in upskilling: With 90% of IT leaders identifying skills gaps as a barrier to effective AI adoption, organizations must invest in training programs to empower their workforce—and help solidify the long-term value investments in these technologies.
Prepare for the Future
As the digital transformation landscape evolves, CTOs must navigate a complex ecosystem of emerging technologies, cost pressures, and security risks. The Flexera report predicts that integrating AI will remain the top priority for IT leaders, followed by reducing IT costs and mitigating security risks.
To stay ahead, organizations should:
- Adopt a long-term vision: Shift from short-term goals to a strategic roadmap emphasizing scalability, flexibility, and resilience.
- Enhance governance: Implement frameworks to monitor and manage technology investments, ensuring alignment with organizational priorities.
- Gain visibility: Organizations should have a trusted view of all on-premises, cloud, data center, and SaaS software usage and licenses.
- Leverage partnerships: When appropriate, collaborate with managed service providers and technology vendors to access expertise and resources that accelerate innovation.
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Optimize Innovation By Avoiding Temptation
As the new year begins, CTOs should resist the temptation to rush digital transformation initiatives. The allure of speed often overshadows the necessity for thoughtful planning.
Andrew Duncan, CEO and Managing Partner at Infosys Consulting, captures this sentiment perfectly."As we head into 2025, CTOs must resist the urge to rush into digital transformation out of fear of missing out. The pressure to act quickly, especially with emerging technologies like AI, can lead to fragmented efforts and missed opportunities for meaningful impact. Instead, take a step back, ensure your data is structured, and build a foundation that supports sustainable innovation. Successful transformation requires trust, collaboration, and the confidence to stay the course even when challenges arise. The goal isn’t just speed—it’s long-term value creation."
Rushing digital transformation can create more obstacles than it solves. By embracing a pragmatic, innovation-driven approach, organizations will position themselves for long-term success.
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