The vast majority of global executives (90 per cent) believe their IT infrastructure is best-in-class, while only 39 per cent feel it’s ready to handle future risks, according to a report from IT services provider Kyndryl.
This alarming gap is especially notable as Kyndryl serves thousands of enterprise clients in mission-critical IT modernisation.
Based on feedback from 3,200 senior leaders across 25 industries and data from Kyndryl’s AI-powered platform, Kyndryl Bridge, the report stresses urgent modernisation challenges.
Although 94 per cent of business leaders view technology modernisation as a high priority, Kyndryl’s data reveals that 44 per cent of mission-critical IT infrastructure is approaching or at end-of-life.
Nearly all businesses face the pressure of keeping systems updated, and 64 per cent of CEOs cite outdated IT as a major concern. AI adoption, a cornerstone of modern IT, is similarly mixed.
Despite 76 per cent of businesses investing in AI and machine learning, only 42 per cent see a positive return on investment, with barriers such as data privacy concerns (31 per cent), uncertain ROI (30 per cent), and compliance challenges (26 per cent) slowing progress.
The report underlines cybersecurity and talent gaps as significant hurdles. 65 per cent of executives worry about cyber-attacks, yet only 30 per cent feel adequately prepared to manage those risks.
Meanwhile, more than 40 per cent of leaders report technology skills gaps that slow modernisation efforts.
Bridging these divides is essential, as companies further along in digital transformation report closer collaboration between business and technology leaders, leading to improved ROI on tech projects.
“The work we do at Kyndryl to run and transform complex IT infrastructures for thousands of enterprise customers has given us a deep perspective on how companies can identify opportunities to overcome today’s business challenges,” said Kyndryl Chairman and CEO Martin Schroeter.
“Readiness is an ongoing challenge, and it’s about empowering people, aligning tools with culture, and embracing the complex journey of digital transformation across the entire organisation,” he added.
The report also addresses regulatory and environmental challenges. With climate concerns on the rise, 59 per cent of executives worry about disruptions, but only 25 per cent feel their systems are equipped to respond.
As regulations increase globally, 48 per cent of executives expressed concern about the pace of regulatory changes, while 66 per cent see the new regulations as beneficial.
Businesses that pursue modernisation report significant benefits. Over the past year, many executives saw improvements in efficiency (85 per cent), innovation (71 per cent), and enhanced customer and employee experiences (60 per cent).
However, data security improvements (34 per cent) and sustainability efforts, such as reduced energy use or emissions (27 per cent), remain areas needing growth.
In terms of automation, Kyndryl Bridge shows that 8 per cent of IT issues are resolved autonomously without human intervention, with the potential for this figure to increase to 30 per cent, potentially saving billions annually in maintenance and downtime.
To help companies navigate modernisation, the report proposes a threefold approach.
Kyndryl’s report outlines a three-pronged approach to readiness, emphasising that effective modernisation goes beyond technology upgrades—it’s also about aligning IT with people, culture, and long-term business goals.
First, being “people-ready” is as crucial as being “tech-ready.” Organisations further along in their digital transformation journeys report better alignment between business and tech leaders, which drives more cohesive modernization.
With IT increasingly shaping workplace culture and processes, collaborative CIOs and CTOs who engage across the C-suite are more prepared to bring their teams along in the modernisation process.
Leaders who nurture a skilled workforce, especially in fields like AI and cybersecurity, feel better equipped to face future risks, making talent development an essential investment.
Second, balancing innovation with familiarity is key. Leaders must carefully evaluate how new technologies integrate with existing processes, company culture, and overall goals.
Weighing immediate operational needs against longer-term investments helps leaders navigate complex modernisation challenges.
For example, AI capabilities thrive on a robust data foundation; investing in this groundwork can maximize ROI from AI and other advanced technologies in the long run.
Lastly, reframing the approach to tech debt offers opportunities for agility and growth. The data underlines that nearly every business faces the challenge of outdated infrastructure yet addressing tech debt unlocks operational efficiencies and sets the stage for faster growth.
This approach encourages companies to fully embrace new capabilities, like automation, to boost efficiency and reduce downtime.
As automation matures, Kyndryl estimates that it could address up to 30 per cent of IT issues without human intervention, potentially saving billions and emphasising the broader value of proactive modernisation.
Together, these strategies provide a roadmap for companies to achieve readiness in an ever-evolving landscape.
