- ISG study reveals talent shortages and complexity are slowing progress on data and AI initiatives.
- Three-quarters of enterprises plan to increase budgets for data and AI projects over the next two years.
- Lack of expertise and centralized data governance are major challenges hindering AI adoption.
New research from Information Services Group (ISG) (III, Financial) highlights the ongoing challenges enterprises face in realizing the full potential of their data and AI initiatives. Despite robust investments, many organizations report that expected benefits have yet to materialize. According to ISG's recent survey, nearly three-quarters of companies intend to increase annual budgets for data quality, integration, and security projects within the next two years, despite flat overall IT budgets.
The ISG Market Lensâ„¢ Data and AI Programs study found that a majority of enterprises anticipate a growth of over 10 percent in value from data initiatives. However, high expenditures in areas such as productivity and data quality have not yielded significant results. Companies attribute these challenges to technological and operational barriers, particularly the complexity in managing data infrastructure across numerous applications.
Most funded data activities focus on extracting business value from insights, productivity enhancement, and data security. Yet, only 43 percent of organizations have established a consistent data structure, necessary for AI success. Moreover, 38 percent of companies believe the costs associated with harmonizing data management surpass its potential benefits.
Talent shortages also play a critical role in slowing data and AI project progress. Over a quarter of enterprises cite the lack of skilled employees as the primary barrier to fully implementing data initiatives. To address these challenges, companies plan to increase spending on outsourced data services by an average of seven percent, with 60 percent already engaging new service providers. This approach aims to leverage external expertise in data organization, design, and AI productivity while accessing multidisciplinary talent.
ISG emphasizes the need for a business- and data-first approach to tackle complexity challenges and transform how enterprises engage with managed service providers. The research surveyed 281 executives with IT spending decision-making authority across the Americas, Europe, and Asia Pacific in May 2025, offering insights into current market trends and strategic business initiatives.
