Kyndryl, the technology services company, today presented the Kyndryl Readiness Report 2024, which analyzes a concerning paradox: while 90% of executives believe their technology infrastructure is excellent, only 39% think it is ready to face future risks. In Spain, this figure slightly increases to 41%.
The report also shows how technological modernization is giving companies a competitive advantage, although only 42% perceive a positive return on investment in artificial intelligence. In the current digital economy, business leaders rely on technology to mitigate risks, develop talent, and leverage new tools. However, while 94% of executives acknowledge that modernization is a priority, the report reveals that 44% of critical technological infrastructure is reaching the end of its lifecycle, increasing vulnerability and hindering modernization.
In Spain, 80% of surveyed executives state that their companies are struggling to keep up with technological advancements, a figure that globally decreases to 62%.
The Kyndryl Readiness Report 2024 gathers responses from 3,200 senior decision-makers, along with insights from Kyndryl’s AI-driven digital enterprise platform, Kyndryl Bridge, to identify challenges and opportunities in the most relevant sectors.
Among the report’s data, the following results also stand out:
– Difficulty in achieving AI ROI. While 76% of companies are investing in traditional AI and machine learning, only 42% see a positive return on investment. The biggest obstacles to AI adoption continue to be concerns about data privacy (31%), uncertainty about ROI (30%), and compliance issues (26%).
– Technology challenge at end of life. Nearly all modern companies face the challenge of maintaining their systems up to date. 64% of CEOs are concerned about IT obsolescence, with 66% in Spain. Kyndryl Bridge shows that 44% of critical IT infrastructure is nearing the end of its lifecycle or has already reached it.
– Technology surpassing training. Over 40% of leaders observe and experience gaps in technological skills that hinder modernization progress.
Security remains the top concern. 65% of executives are worried about cyberattacks, and only 30% feel prepared to manage those risks.
Business-technology alignment. Companies advanced in digital transformation confirm increased collaboration between business and technology leaders and a higher return on investment in technology projects.
“The work we do at Kyndryl to execute and transform complex IT infrastructures for thousands of companies has given us a deep perspective on how companies can identify opportunities to overcome current challenges,” says Martin Schroeter, President and CEO of Kyndryl. “Readiness is a continuous challenge and involves empowering people, aligning tools with culture, and embracing the complex journey of digital transformation across the entire organization.”
Risks and benefits
Cybersecurity tops the list of business concerns: 65% of executives are worried about cyberattacks, and only 30% feel prepared to manage them. Likewise, 59% express concern about climate change and environmental issues, but only 25% believe their systems can effectively respond.
The accelerating regulatory landscape is also a major concern for executives as significant regulations are being implemented. Although 48% of executives are concerned about the pace of regulations being too fast, 66% believe that regulation has a positive overall effect.
Despite these challenges, companies that modernize reap clear benefits from these projects. Compared to last year, executives report improved efficiency (85%), increased innovation (71%), and improved employee or customer experience (60%). However, there is still room for improvement as executives see less impact on data security and regulatory compliance (34%) and sustainability-based outcomes like energy reduction or emissions (27%).
Even companies that have adopted more advanced IT tools, like automation programs that monitor and solve problems across an entire IT landscape, have additional room for improvement. Kyndryl Bridge shows that an average of 8% of IT issues can be resolved through automation without human intervention. Thus, Kyndryl sees the potential for up to 30% of IT problems to be resolved through automation, potentially saving companies billions of dollars annually in maintenance costs and downtime avoidance.
Roadmap for the future
As indicated by the Readiness Report data, companies are facing tough decisions in their preparation process. By addressing weaknesses and solutions, the report offers a roadmap for readiness in a rapidly evolving business landscape.
– Being prepared as professionals is as important as being well-versed in technology. IT is everyone’s business. Organizations in a more advanced stage of their technological journey also point to alignment between business and technology leaders. Since IT plays a more prominent role in shaping workplace culture and processes, CIOs and CTOs who collaborate with the executive leadership will be more prepared to lead employees through technological improvements. Leaders who foster a skilled workforce are more likely to feel prepared for future risks, so investing in talent development, especially in AI and cybersecurity, is crucial.
– Weighing the new against the known. To justify intelligent investments, executives must understand how new tools will integrate not only with technology but also with the culture, processes, and goals of the company. Balancing immediate needs with long-term investments will help executives overcome the complex challenges of modernization. And new capabilities, like AI, rely on a solid database foundation; investing first in the base can achieve a greater long-term return on investment.
– Reframing the conversation about technological debt. The data shows that in an evolving market where nearly everyone faces outdated infrastructures, companies are not alone in the technological challenges at the end of their lifecycle. Reducing technical debt eliminates operational inefficiencies and unlocks potential for faster growth, investment in future agility and innovation. This includes fully embracing new capabilities like automation to increase efficiency and reduce downtime.