ADAPT reveals the top five key shifts in CIO priorities for 2025 and how tech vendors can support.

As Australian organisations accelerate digital transformation, CIOs are under mounting pressure to simplify operations, integrate AI, modernise IT infrastructure, and demonstrate the business value of technology investments.

At the same time, budget constraints, technical debt, and governance challenges make it harder for IT leaders to innovate at scale.

ADAPT’s latest CIO Edge research, based on insights from over 140 CIOs, highlights five key shifts shaping CIO priorities in 2024 and beyond.

Tech vendors looking to deepen engagement with CIOs must align their solutions with these evolving demands.

Trend 1 – From foundational IT to simplification and execution

CIOs are shifting their focus from foundational concerns like cyber security and cloud adoption to driving operational excellence, reducing complexity, and executing on modernisation strategies.

While cyber security remains an essential initiative, its priority ranking has dropped from second to eighth place.

This reflects a broader industry shift, where security is now seen as a baseline expectation rather than a competitive differentiator.

Instead, CIOs are prioritising digitisation, automation, and cost efficiency to streamline operations and build future-ready IT environments.

The modernisation imperative is driving a renewed focus on application and infrastructure upgrades.

ADAPT’s research shows that application modernisation and integration emerged as the top IT initiative between February and August 2024.

Legacy systems, which once served as the backbone of many enterprises, are now seen as barriers to agility, security, and business growth.

Recent cyber attacks on organisations like Medibank and Optus underscore the risks of outdated infrastructure, reinforcing the need for modernisation.

National Australia Bank (NAB) provides a case study in how strategic application modernisation can deliver tangible business benefits.

Under CIO David Boyle, NAB launched the NextGen core banking program, integrating customer data through the NAB View platform.

By consolidating over 12 million customer-account relationships, the bank enhanced its ability to deliver personalised services while reducing infrastructure costs.

NAB’s private cloud strategy has also improved agility and security, ensuring that modernisation efforts align with both business growth and operational resilience.

 

Recommended actions for vendors

  • Enable CIOs to simplify IT environments by offering automation and AI-driven solutions that accelerate execution.
  • Provide overlay solutions that integrate with legacy systems to minimise disruption and reduce technical debt.
  • Embed security-by-design into modernisation strategies to address regulatory and cyber risks.

 

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Trend 2 – AI readiness: overcoming governance and data barriers

AI adoption is accelerating across industries, but CIOs face significant challenges in scaling AI initiatives due to data quality, governance, and process maturity issues.

ADAPT’s research indicates that AI readiness has increased 2.3 times since early 2024, yet 70% of organisations still do not expect to be fully prepared for AI implementation in the next year.

The enthusiasm for AI-powered solutions is evident, but without strong data foundations, these initiatives risk amplifying inefficiencies rather than delivering strategic value.

One of the most pressing issues is data governance.

More than 80% of CIOs report immaturity in standardised data governance and processes, which limits their ability to democratise access to trusted insights.

Poor data quality, fragmented systems, and regulatory complexities create further roadblocks, slowing down AI adoption.

Despite these challenges, organisations with mature data foundations experience seven times greater AI readiness, highlighting the critical role of robust data management strategies.

Commonwealth Bank of Australia (CBA) demonstrates a structured approach to AI adoption.

Through its CommBank Gen.ai Studio, CBA has integrated AI into real-time customer interactions, driving a 66% increase in engagement.

By developing over 50 AI use cases—including automated home loan processing and personalised banking services—the bank has successfully combined AI innovation with responsible governance.

Importantly, CBA has prioritised employee upskilling alongside AI deployment, ensuring that new technologies are implemented responsibly and at scale.

 

Recommended actions for vendors

  • Position products to bridge data silos and enhance AI scalability with seamless integration.
  • Support CIOs in building AI literacy through training and upskilling initiatives.
  • Ensure AI compliance and ethical governance by embedding privacy, security, and regulatory frameworks.

 

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Trend 3 – Balancing IT modernisation with business innovation

Despite the push for IT modernisation, CIOs are struggling to balance technology upgrades with business innovation due to funding constraints and legacy system burdens.

ADAPT’s research finds that IT budgets have declined by 58% since 2023, with small and mid-sized enterprises (SMEs) experiencing reductions of over 70%.

With resources stretched thin, CIOs are directing just 4% of their budgets to innovation, while the bulk of spending goes toward stabilising core systems and addressing technical debt.

This financial pressure is forcing CIOs to rethink their approach to modernisation, prioritising incremental improvements over large-scale transformations.

Virgin Australia exemplifies this shift, having integrated IT within its customer strategy team to align technology investments with business outcomes.

By embedding IT within revenue-generating functions, the airline has accelerated innovation cycles, improved customer experience alignment, and strengthened agility in responding to market demands.

 

Recommended actions for vendors

  • Offer modular, scalable modernisation solutions that enable phased implementation without overwhelming budgets.
  • Provide flexible pricing models, including subscription-based or outcome-based licensing.
  • Help CIOs demonstrate ROI by delivering analytics and measurable business impact insights.

 

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Trend 4 – Demonstrating IT’s business value

CIOs are under increasing pressure to move beyond operational IT management and demonstrate the direct business value of technology investments.

However, ADAPT’s research reveals that only 30% of CIOs report success in using technology to reduce overall business costs, and 41% face challenges in delivering integrated omni-channel experiences.

Without clear cost-to-value frameworks, IT risks being perceived as a cost centre rather than a driver of business transformation.

To address this, CIOs are embedding measurable value metrics into their IT strategies.

Those who can clearly articulate IT’s contribution to revenue growth, efficiency, and competitive advantage are securing greater executive buy-in.

Vendors can support this shift by offering built-in analytics, reporting tools, and ROI tracking capabilities that help CIOs quantify business impact.

AI and automation will play a crucial role in elevating IT’s strategic value.

By automating routine tasks, CIOs can redirect resources toward higher-value initiatives, from customer experience enhancements to new revenue streams.

Vendors who integrate AI into business-centric solutions will be well-positioned to help CIOs transition from IT operators to business enablers.

 

Recommended actions for vendors

  • Deliver built-in analytics and reporting tools that allow CIOs to measure and communicate IT’s impact.
  • Support cost-to-value transformation by aligning IT investments with business revenue streams.
  • Enable AI-driven automation to shift CIOs’ focus from operational maintenance to business innovation.

 

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Trend 5 – Evolving vendor relationships: from supplier to strategic partner

CIOs are becoming more selective about their technology partners, consolidating vendors to streamline IT ecosystems, enhance security, and optimise costs.

ADAPT’s data shows that 68% of CIOs plan to consolidate vendor engagements, with those actively pursuing consolidation targeting a 20% reduction in supplier count.

This reflects a growing preference for vendors who offer integrated solutions, outcome-based pricing, and deep industry expertise.

Reliability and cost optimisation are now the top selection criteria for vendor partnerships, with 93% of CIOs prioritising deployment reliability and 87% focused on cost efficiency.

Vendors who can minimise complexity, offer flexible delivery models, and proactively evolve solutions in alignment with business needs will be best placed to secure long-term relationships.

 

Recommended actions for vendors

  • Shift from transactional sales to strategic partnerships by aligning technology roadmaps with CIO business goals.
  • Help CIOs pay down technical debt by offering solutions that ease modernisation burdens.
  • Demonstrate clear ROI and business impact through value-driven solutions and services.

 

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CIOs face mounting challenges in modernisation, AI adoption, and business value demonstration, but they are actively seeking technology partners who can help them navigate these complexities.

For tech vendors, the opportunity lies in aligning solutions with CIOs’ shifting priorities—offering simplicity, scalability, and measurable impact.

By positioning themselves as strategic enablers of efficiency, innovation, and business transformation, vendors can secure deeper engagement with CIOs and drive long-term success in an evolving IT landscape.

For deeper insights on these CIO priorities, case studies, and recommended actions, access the full ADAPT CIO Edge Market Pulse report.

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Contributors
Harshit Goel Senior Analyst & Strategic Research
Harshit’s role as a Senior Analyst at ADAPT focuses on delivering actionable insights that help technology and business leaders navigate emerging trends,... More

Harshit’s role as a Senior Analyst at ADAPT focuses on delivering actionable insights that help technology and business leaders navigate emerging trends, optimize technology investments, and drive transformative value across industries. Specializing in the BFSI, fintech, telecom, and retail sectors, Harshit advises C-suite executives and business leaders and his expertise spans areas like digital banking and payments, artificial intelligence applications, and digital commerce and digital experience platforms.

Before joining ADAPT, Harshit was a Senior Research Analyst at Gartner, where he spent over 6 years advising CIOs, marketing and sales leaders on the intersection of technology and business. Following his time at Gartner, he led research & strategy, and product marketing at Comviva, a global technology firm specializing in digital platforms for organisations in telecom and finance sectors.

Known for his practical approach to addressing business challenges, Harshit is passionate about helping organizations harness technology to create meaningful impact. Outside of work, he enjoys traveling to the mountains and spending quality time with friends and family, bringing the same sense of curiosity and exploration to his personal and professional pursuits.

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