Breakthrough 3:
Old tech, new tech…balancing past, present and future technologies

Current vs Ideal investment

Finding the right balance and creating business cases aligned to business objectives is a key breakthrough yet to be achieved for most.

25-49% of today’s IT budgets are still consumed by ‘keeping the lights on’; a challenge considering the ambition of 85% of respondents to become AI-enabled in the next 12-24 months.

Legacy modernization is viewed as difficult to achieve, with 74% of respondents expecting to eliminate technical debt in the next two years and 64% stating that legacy is holding back innovation.

While the technology narrative is dominated by AI and other emerging technologies, and there is more pressure than ever to accelerate adoption, CIOs still need to manage – and often modernize – legacy technology.

Balancing management and modernization

Technology leaders therefore are facing the reality of managing legacy debt alongside increasing expectations to drive innovation and a competitive edge.

Agentic AI is consistently ranked in the top three emerging tech investment priorities. But when it comes to GenAI, CIOs are becoming frustrated with the need to quantify incremental productivity gains that cannot be monetized.

Strong foundations

But AI can only deliver on its potential if it is underpinned by strong foundational technologies like data and cloud computing power.

of tech leaders are confident in the overall quality and accuracy of their organization’s data, although this is tempered by a focus on data governance (84%) for order and control.

Approximately what proportion of your IT budget do you spend on managing legacy technology?

0 to 24%
25% to 49%
50% to 74%
75% or more

When it comes to cloud capabilities, IT leaders feel in control and well equipped. The clear consensus is that the future will be hybrid (86%).

are confident in their ability to predict and optimize cloud expenditure, with 83% also believing their IT architecture is scalable to future business needs.

Yet widespread concerns about digital sovereignty in light of US hyperscaler domination are forcing 78% to shift a greater proportion of their workloads towards private, in-house cloud environments and 83% to consider additional sovereign or domestic cloud service providers; it remains to be seen if this is a genuine imperative or simply an insurance policy.

80% of IT leaders reprioritize projects due to changing environments. What's the most significant barrier to balancing legacy modernization with new AI/emerging tech investments in your organization?

Lack of specialized skills (e.g., both legacy & AI expertise)
“Disentanglement” - data quality and integration issues
The costs and risks of modernization outweigh the benefits
Budget constraints ('keeping the lights on' costs)
Organizational resistance to change

The expectation of AI solving all problems is unrealistic. Whatever AI you put into your business needs to fit your model, your people and the changes you want to make. It should be embedded where it helps the business to get closer to its strategic goals; we don’t want to be AI-led for the sake of it so we will deploy AI smartly.

Júnior Mendonça, Global Tech Lead, Digital Workplace & Employee Experience, ING

There is a lot of pressure to accelerate the legacy transformation agenda, to transform should be just as critical to the CEO and CFO’s targets, but there are difficult trade-offs to make.

Júnior Mendonça, Global Tech Lead, Digital Workplace & Employee Experience, ING

Senior tech voices need to be the voices of reason when it comes to AI as they will be the people tasked with proving the value and justifying the cost in the end.

Aidan Hancock, CIO

IT budgets are categorized by ‘run’ and ‘transform’; every CIO needs to aspire to ensuring as much as possible is in ‘transform’. Getting the ‘run’ costs down means you can focus on things that will become value generators for the business.

Tony Mather, CIO, QinetiQ