New research by Rackspace Technology (NASDAQ: RXT), a leading end-to-end, multi-cloud technology solutions company, conducted in association with AWS, finds that global IT organizations have been slow to modernize key applications, including customer resource management (CRM), enterprise resource planning (ERP) and human resources (HR) systems. Moreover, the study suggests that failure to modernize key apps and data will limit organizations’ ability to deploy and benefit from cutting-edge technologies such as artificial intelligence (AI).
Among 1,420 global IT leaders surveyed across industries, 78% of Asia Pacific and Japan (APJ) respondents agree they will not benefit from AI if they fail to modernize legacy apps and data. Although survey respondents identify increased security (58%), improved efficiency (53%), and followed by cost (47%) as the leading motivators of modernization – and ERP, CRM, and Business Intelligence systems as the apps that most need upgrading – organizations are still dragging their feet on updating legacy infrastructure. Of legacy infrastructure that has not yet been modernized, only 22% of workloads are considered noncritical, but 24%2 of legacy infrastructure has “not yet been assessed.”
“It is telling that even well into their cloud journey, the three most critical apps organizations say they need to upgrade are truly at the heart of the business because they are at once the most important things to modernize and the most challenging,” said Jeff DeVerter, Chief Technology Evangelist, Rackspace Technology. “At the same time, it is encouraging to see leaders understand that app modernization is key to getting the most out of cutting-edge technologies. It could be that the prospect of losing out on AI will motivate organizations to finally get off the sidelines when it comes to modernization of core systems.”
“While most APJ companies recognize the need to modernize their legacy apps and data to benefit from the innovations and benefits from AI, they cite limited resources and a culture that is resistant to change as two of the main reasons why they have not modernized their apps and data. This is where organizations can partner with solutions providers like Rackspace Technology for expertise across multi and hybrid cloud environments. As a result, they can better serve their customers, build loyalty and create new revenue opportunities through the latest innovations,” said Hemanta Banerjee, Vice President of Public Cloud Data Services, Rackspace Technology.
Who Is Leading Modernization?
The survey also points to gaps in the leadership of modernization efforts. Only 24% of those polled say they deploy cross-functional teams as part of modernization, while just 42% use tech vendors and only 29% deploy external consultants. Overwhelmingly, modernization initiatives are led by IT departments (69%) and executive leadership/C-suite (45%).
The Benefits & Challenges of Modernization
When survey respondents were asked to identify the top expected outcomes of modernizing, increased efficiency led the way (31%), followed by cost savings (28%) and the ability to adopt more advanced technologies (e.g. AI) (27%). Respondents also noted modernization has resulted in better data management, integration, quality, and lowered data costs.
The most critical apps and data to modernize are CRM (89%), enterprise (87%), business intelligence (74%), HR (73%) data analytics (54%), governance and security (46%) and data integration (41%).
However, many APJ organizations still face unforeseen challenges to modernization, including limited resources (27%), cultures resistant to change (20%), integration challenges (17%), lack of senior buy-in (10%), lack of a clear roadmap (9%) and communication between stakeholders (8%).
If organizations fail to modernize legacy apps and data systems, respondents believe it will result in integration challenges (32%) increased costs (30%), lack of innovation (26%) poor security (25%), and the probability to miss out on the ability to adopt advanced technologies (23%).
