About 82% of Singapore respondents in a global survey say their organisation will not benefit from AI if they fail to modernise legacy apps and data.
“Most Singapore companies cite limited resources and a culture that is resistant to change as two of the main reasons why they have not modernised their apps and data,” said Hemanta Banerjee, vice president of Public Cloud Data Services, Rackspace Technology.
The survey also points to gaps in the leadership of modernisation efforts. Only 30% of local respondents polled say they deploy cross-functional teams as part of modernisation, while just 40% use tech vendors and only 27% deploy external consultants. Overwhelmingly, modernisation initiatives are led by IT departments (67%) and executive leadership/C-suite (45%).
Rackspace and Amazon Web Services (AWS) commissioned the global survey of 1,420 global IT leaders across industries, including manufacturing, digital native/technology, financial services, retail, government/public sector, and healthcare sectors, in the Americas, Europe, Asia, and the Middle East. There are 120 respondents in Singapore.
The global survey was conducted by Coleman Parkers Research was surveyed between April 27, 2023 and May 25, 2023.
Banerjee noted that local organisations are still dragging their feet on updating legacy infrastructure.
This is despite the leading motivators of modernisation identified in the survey: increased security (55%), improved efficiency (54%), and increased agility/flexibility (50%), followed by cost (47%).
Meanwhile, the survey identified ERP, CRM and HR as the apps that most need upgrading. Of legacy infrastructure that has not yet been modernised, only 22% of workloads are considered non-critical, but 25% of legacy infrastructure has “not yet been assessed.”
The results from Singapore respondents echoed that of their global counterparts who are similarly slow to upgrade key applications, including CRM, ERP and HR systems. This failure data will limit their ability to deploy and benefit from cutting-edge technologies such as AI.
The survey also points to gaps in the leadership of modernisation efforts. Only 30% of local respondents polled say they deploy cross-functional teams as part of modernisation, while just 40% use tech vendors and only 27% deploy external consultants.
Benefits and challenges of modernisation
When survey respondents were asked to identify the top expected outcomes of modernising, efficiency led the way (29%), followed by the ability to adopt more advanced technologies (e.g. AI) (28%), and greater speed and agility (28%). Respondents also noted modernisation has resulted in better data management, integration, quality, and lowered data costs.
The most critical apps and data to modernize are CRM (87%), enterprise (82%), bespoke apps (81%), HR (73%), business intelligence (71%), data storage (630%), data analytics (58%), governance and security (50%) and data integration (43%).
“It is telling that even well into their cloud journey, the three most critical apps organisations say they need to upgrade are truly at the heart of the business because they are at once the most important things to modernise and the most challenging,” said Jeff DeVerter, chief technology evangelist, Rackspace Technology.
The survey shows many organisations still face unforeseen challenges to modernization, including limited resources (28%), a culture that is resistant to change (20%), integration challenges (18%), lack of senior buy-in (10%), lack of a clear roadmap (9%) and communication between stakeholders (8%).
If organisations fail to modernize legacy apps and data systems, respondents believe it will result in increased costs (32%), integration challenges (30%), lack of innovation (29%), the probability to miss out on the ability to adopt advanced technologies (28%) and decreased efficiency (26%), lack of innovation (26%) and poor security (23%).
“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 organisations to finally get off the sidelines when it comes to modernisation of core systems,” said DeVerter.
