IDC has released its latest CIO Pulse Survey, offering timely insights into how CIOs are reshaping IT budgeting, reassessing technology vendors, and redefining expectations around AI pricing as enterprises move from experimentation to scaled deployment of GenAI and Agentic AI.
The survey, based on responses from 72 senior technology leaders, including 65 percent CIOs and 11 percent CTOs, highlights a period of significant transition for consulting firms, systems integrators, AI model providers, and enterprise software vendors.
CIOs Signal Potential Vendor Changes Across Key Technology Categories
Nearly one in five CIOs say they are most likely to change their consulting or systems integration partner within the next year. Overall, close to 20 percent of respondents plan to make changes across consulting and systems integrators, AI model providers, and enterprise application vendors.
This signals a pivotal moment for consulting and SI firms. As GenAI and Agentic AI disrupt traditional service delivery models, CIOs are placing greater emphasis on measurable business outcomes. The ability to clearly link technology initiatives to operational or financial results is emerging as the most critical factor for preserving the value of IT consulting and SI services.
AI model providers also face growing pressure. As organizations move beyond pilots and proof-of-concepts, many CIOs are consolidating partnerships to identify which providers can support enterprise-wide scale. At the same time, enterprise application vendors are aggressively expanding AI-enabled capabilities, prompting some CIOs to consider reducing the number of application vendors by switching from existing partners.
Annual IT Budgeting Still Dominates CIO Planning
Despite economic uncertainty and a growing need for agility, 63 percent of CIOs say IT budget planning still takes place annually. Nearly half of respondents indicate that their organizations use a product or service aligned budgeting approach.
Among budgeting methodologies, CIOs cited:
Incremental budgeting, where prior-year spending is used as a baseline with minor adjustments
Zero-based budgeting, where IT expenses must be justified each year
Product or service aligned budgeting, which ties funding to the lifecycle of products and services with regular reviews to reflect shifting priorities
The persistence of annual budgeting underscores the challenge CIOs face in balancing governance with the flexibility required to respond to fast-moving AI and digital initiatives.
IT Shared Services Model Leads Cost Allocation Approaches
When it comes to cost models, the IT shared services approach is the most widely used among surveyed organizations. Under this model, IT centrally funds the technologies that enable various business functions.
Other approaches include IT show-back, where costs are mapped to business units for visibility but funded centrally, and IT charge-back, where costs are billed directly to the functions they support. The survey shows that charge-back remains the least popular option, reflecting CIO preferences for centralized control and simplicity.
CIOs Favor Hybrid and Outcomes-Based AI Pricing Models
AI pricing strategy is another area where CIO expectations are evolving rapidly. The survey shows that CIOs lean strongly toward hybrid pricing models, where some AI capabilities are embedded within core products while advanced features are offered at a premium through subscription or consumption-based pricing.
A significant number of CIOs also favor outcomes-based pricing, where fees are tied to achieving specific, predefined business targets. This reflects a broader shift toward accountability and ROI-driven technology investments, especially as AI budgets grow.
Organizational Design and Workforce Readiness for AI
IDC’s findings also highlight organizational changes CIOs see as necessary to fully leverage AI. Reducing silos and expanding the use of AI within IT itself are the top organizational design priorities cited by respondents.
Interestingly, AI adoption outside of work is having a positive spillover effect. CIOs report that employees who use AI in their personal lives are more open to embracing AI in enterprise environments, easing change management and adoption challenges.
Manufacturing and Financial Services Lead Participation
The respondent base includes a mix of industries, with manufacturing and financial services most prominently represented. Organization size also varied, with 38 percent of respondents coming from enterprises generating more than 2 billion dollars in annual revenue.
What the CIO Pulse Survey Means for Technology Leaders
For CIOs, the IDC survey underscores the need to reassess vendor relationships, modernize budgeting practices, and demand clearer links between AI investments and business outcomes. For technology vendors and service providers, the message is equally clear. Success in the next phase of enterprise AI adoption will depend on flexibility, transparent pricing, and the ability to deliver measurable value at scale.
RAJANI BABURAJAN
