Cybersecurity remains the top investment priority for tech leaders, with 48% citing it as the most critical area for improvement due to rising threats.

Concerns over increasingly sophisticated cyber threats include those linked to global instability and AI-driven attacks.

The latest EY Ireland Tech Leaders Outlook study, which surveyed 150 senior tech leaders, found that respondents are turning their focus towards improved efficiency and reduced costs (47%) as only a third (34%) expect budget increases, down from 46% last year.

Following years of high demand, hiring momentum has stalled. 76% of tech leaders plan to freeze or reduce IT headcount due to those same budget pressures.

Some 41% of organisations now run all their core systems through the cloud, almost triple the 15% that said so in 2023, reflecting growing trust in the cloud's ability to deliver enhanced security, scalability and cost efficiency.

AI adoption continues to accelerate, with one in ten (105) leaders now saying AI is fundamental to their business, jumping from just one in 50 (2%) in 2024.

Meanwhile, the number of organisations without an AI strategy has fallen to 56% from 62% last year.

This research also shows that AI is transitioning from experimentation to practical use, with customer service (38%), reporting and query support (28%), and sales data analysis (28%) now seen as the most valuable applications.

This marks a shift from last year, when creative use cases such as content generation and design support ranked higher and reflects a growing understanding of where AI can deliver tangible business value.

“Technology leaders in Ireland are showing remarkable resilience in the face of on-going economic and geopolitical uncertainty," said Ronan Walsh, head of technology consulting at EY Ireland.

"While budget constraints are clearly influencing decision making, our research shows that organisations are prioritising investments that deliver real value, particularly in cybersecurity, efficiency gains, cloud infrastructure and AI.

"The shift in AI adoption is especially striking and we’re seeing a growing number of organisations move beyond experimentation and begin to embed AI into core business functions to great effect.”

Elsewhere, sustainability management and reporting tools remain the top emerging technology expected to deliver value over the next two years, cited by a third (33%) of respondents.

The findings suggest that sustainability may no longer be the primary driver of transformation, but it remains a key area of investment.

Walsh said the research shows a strong sense of optimism among tech leaders, and that the continued focus on sustainability tools also signals a maturing approach, "one that integrates long-term value creation with operational efficiency and risk management.”

Photo: Ronan Walsh, consulting partner at EY Ireland. (Pic: Supplied)