• Security, sustainability and regulations top lists of local executives’ concerns
• AI return on investment limited by skills, compliance, compatibility
• End-of-life technology a top challenge for Australian CEOs
• Talent drives overall readiness

SYDNEY, October 17, 2024 – Kyndryl released the 2024 Kyndryl Readiness Report, which explores the paradox of why 87% of Australian executives believe their IT infrastructure is best-in-class but only 38% of them think it’s ready to manage future risks. The report also shows how IT modernisation is helping companies gain a competitive edge, even as just 38% of Australian businesses currently see a positive return on investment from AI.

In the digital economy, business leaders say they’re relying on their IT to mitigate risk, build talent and take advantage of new tools. Yet while 97% of Australian leaders say technology modernisation is a high priority for their companies, data from Kyndryl shows that 63% of mission-critical IT infrastructure is approaching or at end-of-life, increasing vulnerability and raising barriers to modernisation. Business leaders say they need help with decision making and talent development.

The Kyndryl Readiness Report combines feedback from 3,200 global senior decision-makers with insights from Kyndryl Bridge, the Company’s AI-powered digital business platform, to illustrate global business challenges and opportunities across markets and industries.

Additional findings in Australia:

• AI ROI elusive: While 75% of Australian businesses are investing in traditional AI and machine learning, only 38% see a positive return on investment. The biggest barriers to AI adoption are uncertain ROI (28%), integration difficulty (27%) and compliance challenges (26%).
• End-of-life technology challenge: Nearly all Australian modern businesses face the challenge of keeping their systems up to date. 63% of them are concerned their IT infrastructure is approaching or at end-of-life, higher than the global average of 52%.
• Skills shortage: Australian leaders (43%) are the second most concerned about skills gap(s) impacting their risk readiness out of all regions surveyed.
• Leaders report business-tech alignment: Companies farther along in digital transformation report greater collaboration between business and technology leaders, and greater ROI on tech projects.

Jim Freeman, CTO, Kyndryl ANZ said: “While 90% of executives believe their IT infrastructure is best-in-class, only 39% think it’s ready to manage future risks, highlighting the urgent need for modernisation and talent development. Furthermore, they are struggling under unprecedented acceleration of technical debt due to customers and boards demanding digitisation.”

Report maps out risks and benefits

Cybersecurity tops the list of Australian business’ concerns: 72% of business leaders are worried about cyber-attacks, and only 33% feel ready to manage them. Similarly, 74% express concern over climate and environmental disruptions, yet just 35% believe their systems can effectively respond.

An accelerating regulatory landscape is also top of mind for executives, as major measures come online. In fact, 58% of executives are concerned that the pace of regulation is moving too fast.

Despite these challenges, global businesses that do modernise are realising clear benefits from those projects. Looking back on the past year, leaders said they have experienced improved efficiency (85%), greater innovation (71%) and an improved employee or customer experience (60%). However, there is still room to improve as executives see less of an impact on data security and compliance with regulations (34%) and from sustainability-based outcomes such as decreased energy use or emissions (27%).

Even companies that have adopted more advanced IT tools, like automation programs that monitor and solve issues across an entire IT estate, have room for additional improvement. Kyndryl Bridge shows an average of 4% of Australian IT issues are remediated by automation without human intervention. Kyndryl sees the potential for up to 30% of IT issues to be resolved through automation – potentially saving companies billions of dollars per year in maintenance costs and preventing downtime.

Creating a roadmap to readiness

As the data indicates, organisations face tough decisions in their readiness journeys. By plotting out blind spots and difficult trade-offs, the Report offers a roadmap to readiness in a rapidly changing business landscape.

1. Being ‘people-ready’ is just as important as being ‘tech-ready.’ IT is everyone’s business. Organisations farther along on their tech journeys also report alignment between business and tech leaders. With IT playing a more prominent role in shaping workplace culture and processes, CIOs and CTOs who collaborate across the C-suite will be more prepared to bring employees along with upgrades in technology. Leaders who nurture a skilled workforce are more likely to feel ready for future risks, so investing in talent development, particularly in AI and cybersecurity, is crucial.
2. Weigh the new vs. the familiar: To build the case for smart investments, leaders need to understand how new tools will integrate not only with technology but also the company culture, processes and goals. Balancing immediate needs with long-term investments will help leaders navigate complex modernisation challenges. And new capabilities, like AI, rely on a solid data foundation; investing in the foundation first may achieve higher ROI in the long term.
3. Reframe the conversation about tech debt: The data shows that in an evolving market, with nearly everyone confronting ageing infrastructure, businesses are not alone in the end-of-life tech challenges. Reducing technical debt eliminates operational inefficiencies and unlocks the potential for faster growth—an investment in future agility and innovation. This includes fully embracing new capabilities like automation to increase efficiency and reduce downtime.

To read the full report, visit Kyndryl’s 2024 Readiness Report.

Methodology

The 2024 Kyndryl Readiness Report is based on a comprehensive survey conducted by Edelman DXI, gathering insights from 3,200 senior decision-makers across 25 industries, including healthcare, manufacturing, energy, and finance. The survey, conducted between July 1 and August 12, 2024, captured perspectives from C-suite executives (CEOs, CFOs, CIOs, and CTOs) and senior directors from companies across 18 global markets, including the United States, Brazil, China, Germany, and the UK.

About Kyndryl

Kyndryl (NYSE: KD) is the world’s largest IT infrastructure services provider, serving thousands of enterprise customers in more than 60 countries. The company designs, builds, manages and modernises the complex, mission-critical information systems that the world depends on every day. For more information, please visit www.kyndryl.com.