Kyndryl Report: AI Broadens Modernization Agenda, Leaders Prioritize Business Outcomes Over Replacing Legacy Systems
Kyndryl's latest report reveals that business leaders are now prioritizing AI-driven business outcomes over replacing legacy IT systems. Nearly half of organizations are behind on their modernization goals.
A new global modernization report by Kyndryl indicates a significant shift in organizational priorities, with business leaders increasingly focusing on AI-driven outcomes rather than the sole objective of replacing legacy systems. The survey, which polled 2,000 business and technology leaders across various industries and continents, highlights that AI is reshaping IT investment strategies.
Artificial intelligence is now the leading driver for expanding the use of technologies like mainframes and edge computing, and the second-largest driver for increasing SaaS and private cloud adoption. This focus comes as nearly half of organizations report being behind schedule on their modernization efforts, with over 98% experiencing negative business impacts due to delays.
The report found that the current demand for AI adoption now outweighs previous priorities such as reducing costs or addressing a shrinking pool of expertise in legacy systems. Organizations implementing agentic AI, which can autonomously plan and execute tasks, are seeing faster modernization progress and early benefits, particularly in complex areas like dependency mapping and code conversion.
These trends are leading to more complex and distributed IT environments, challenging the notion of consolidating into a single preferred technology platform. The report also underscores that decisions regarding where technology resides are increasingly influenced by geopolitical considerations and regulatory requirements for data sovereignty, alongside performance and cost.