Technical Debt Stifling Path to AI Adoption for Global Enterprises
Outdated legacy technologies costing organisations the ability to innovate, money, time and potentially, even customers
Technical debt and an over-reliance on outdated legacy systems and applications is blocking enterprise adoption of more innovative technologies like artificial intelligence (AI), according to new research from Pegasystems Inc. (NASDAQ: PEGA), the Enterprise Transformation Company™. The study, conducted with research firm Savanta, was unveiled at PegaWorld®, the company’s annual conference in Las Vegas. It surveyed more than 500 IT decision makers across enterprises worldwide on the challenges caused by technical debt and the progress in modernising legacy technology.
The study found that close to three quarters (72%) of Australian respondents say legacy systems and applications are preventing their organisation from fully embracing more modern technologies. An overwhelming majority (97%) are also concerned about how their technical debt impacts their ability to keep pace with more agile, innovative competitors – with over half (52%) indicating either ‘clear’ or ‘significant’ concern.
“This study highlights how easy it can be for enterprises to get dragged down by outdated systems that are unwieldy to use and resource-intensive to maintain – perpetuating an organisational culture of waste,” Don Schuerman, chief technology officer, Pega said.
Over three quarters (79%) of Australian respondents even acknowledge their reliance on legacy systems ‘likely’ or ‘highly likely’ causes customers to defect due to the resulting poor experiences.
Don Schuerman continues, “while the bottom-line cost to businesses is significant, the real cost of technical debt is its impact on the experiences that today’s customers both demand and deserve. It’s time for businesses to change their mindset, harness the power of generative AI through innovations like Pega Blueprint™, to enact fast, efficient legacy transformation, and free themselves from the vicious cycle of technical debt…before they lose their customers for good.”
Other findings from the research include:
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Legacy dependency: Almost half (45%) of Australian IT decision makers say they can’t stop supporting their legacy applications – despite wanting to – because the systems are still business critical. Over half (53%) say their oldest legacy application is between 11-20 years old, while one in ten (10%) run apps between 21-30 years old.
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Legacy Ineffectiveness: Nearly three quarters (74%) of Australian respondents say legacy systems are preventing their organisation from operating as effectively as possible, citing time spent on maintenance (49%), the siloed nature of disconnected systems (40%), and the cost of maintenance (34%) as the leading contributing factors. Just 2% feel legacy applications caused no problems for their business whatsoever.
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The customer does not always come first: Over three quarters (82%) of Australian respondents agree their business prioritises investments that improve profitability instead of ways to improve customer experience, such as technologies to help modernise legacy applications. This echoes research conducted by Pega earlier this year among global consumers, 69% of whom felt businesses were prioritising profits over positive customer experiences in their IT investments. It could also help explain why nearly half (40%) of Australian respondents say the average resolution time to customer queries has increased between 26-50% in the last 12 months – a direct result of staff running multiple or outdated legacy applications.
Pega surveyed more than 500 IT decision makers worldwide on their legacy transformation projects, how they work, and the challenges and opportunities they present. 97 Australian IT decision makers were included. The results included responses from North America, the United Kingdom, France, Australia, and Germany.
