Outdated IT infrastructure hampering business and technology readiness
Australian executives are paradoxically saying they have confidence in their IT infrastructure but are at the same time concerned about their readiness to tackle future challenges, according to the Readiness Report from Kyndryl. The company’s Chief Technology Officer for A/NZ, Jim Freeman, walks through the report’s key findings.
The report indicates that 87% of Australian leaders believe their IT systems are robust, yet only 38% feel adequately prepared for the risks ahead. This discrepancy is primarily attributed to ageing technology and a protracted talent shortage, underscoring the urgent need for companies to reevaluate their business strategies and reduce technical debt with IT automation tools.
At first glance, the confidence shown by Australian executives in their IT infrastructure may appear reassuring. However, many leaders are acutely aware of the vulnerabilities that accompany their confidence.
Cybersecurity stands out as a primary concern, with 72% of Australian business leaders worried about cyber-attacks, yet only 1 in 3 feel prepared to manage these threats effectively. This gap in readiness is particularly alarming given the increasing sophistication of cyber threats in recent years.
Furthermore, the rapidly evolving regulatory landscape in Australia presents additional challenges. With new regulations continuously being introduced, over half of executives (58%) worry they are not able to keep pace, the highest amongst all countries surveyed. This combination of uncertainties necessitates proactive measures to ensure businesses are equipped to handle future challenges.
Modernisation efforts should prioritise agility
Despite 97% of Australian leaders acknowledging that technology modernisation is vital for mitigating risks, the reality is stark: 63% of mission-critical IT systems are outdated. A striking statistic from the report reveals that 63% of critical IT infrastructure is nearing its end-of-life, raising significant concerns about system reliability and the urgent need for modernisation.
This ageing technology not only increases vulnerabilities but also complicates modernisation efforts. Many businesses struggle to keep pace with technological advancements, with 74% reporting challenges in this area.
In the last 7 years, we have seen mobile, cloud, edge, Internet of Things, and now generative AI. The potential capability gap is growing faster than anyone can keep up with. Pile on top of that the burden of retiring technical debt, and this makes organisations run even slower while trying to catch up. By the way, this is illuminating the dual value proposition of running in the cloud: transferring a large portion of technical debt to the cloud provider and rapid integration of new cloud-based capabilities, like generative AI.
A ‘continuous improvement’ approach to skills
Another critical factor contributing to the risk readiness gap is the ongoing talent shortage. Australian leaders express significant concern about skills gaps impacting their businesses' ability to navigate future challenges. Notably, almost half of executives (43%) are worried about the availability of skilled talent, particularly in areas such as AI, machine learning, and automation.
Businesses that prioritise upskilling and reskilling their workforce are more likely to feel prepared for future risks. By fostering a culture of continuous learning and development, businesses can cultivate the skills necessary to thrive in a rapidly evolving landscape. Consultants play a vital role in helping businesses design and implement effective talent development strategies that align with their risk management objectives.
Technology leaders must drive cross-functional value
As IT assumes a more prominent role in shaping workplace culture and processes, companies must bridge the gap between business and technology. Companies further along in their digital transformation journeys report better alignment between business and tech leaders, which is crucial for fostering collaboration and innovation.
CIOs and CTOs must work closely with other executives to ensure technology upgrades are integrated seamlessly into business operations.
Consultants can facilitate this alignment by encouraging cross-functional collaboration and ensuring that technology initiatives support broader business objectives. By aligning business goals with technology strategies, businesses can create a cohesive approach that drives growth and innovation.
Advisors must help deliver effective outcomes
As Australian businesses navigate an increasingly complex landscape filled with unexpected risks, the importance of partnering with trusted IT infrastructure service providers like Kyndryl has never been more critical. By adopting advanced IT tools and automation programs that monitor and resolve issues across the entire IT estate, businesses can enhance operational resilience.
In fact, up to 30% of IT issues in Australia can potentially be remediated through automation without human intervention, saving companies billions in maintenance costs while preventing costly downtime.
For consultants supporting clients through this transition, reframing the conversation around technology and supporting strategic partnerships can help organisations realise more value from transformation efforts. This, in turn, can help Australian companies turn potential vulnerabilities into opportunities for growth, ensuring they are well-prepared to face the challenges ahead and thrive in the digital age.
