Since coming into office, the Biden administration has fueled an unprecedented federal IT bull market. While the White House’s proposed federal civilian technology budget of $75.1 billion for federal fiscal year 2025 (FFY25) is the smallest increase in several years (up less than 1% compared to $74.5 billion in FFY24), it is still an increase of more than 14% from $65.8 billion in FFY23, and up 25% from $60.1 billion in FFY21, the last year of the prior administration. FFY25 has started with a continuing resolution (CR), as have most of the last several fiscal year. The impact of the latest CR on the largest federal systems integrators may be limited to shorter-cycle programs in their order books, but some disruptions to larger, longer-term engagements are not out of the question.

As the most mature digital transformation component, customer experience (CX) has compelled buyers to embark on omnichannel projects to unify insights and processes across the customer life cycle for years now. Vendors have plenty of use cases to rely on, but slower discretionary spend is pressure-testing vendors’ value propositions rooted in trusted algorithms.

TBR’s latest telecom research indicates customer care, which includes contact centers, will be profoundly transformed by AI. Though traditional AI has been utilized in customer care for many years (e.g., chatbots and interactive voice response), GenAI will take customer care to an advanced state. TBR estimates that GenAI could reduce the costs of running contact centers by up to 80%, and this is an area telecom operators are keenly interested in as they remain focused on cutting expenses across their businesses.