SnapLogic survey reveals crippling costs of outdated technology

Research conducted by SnapLogic has revealed that legacy technology is imposing significant financial burdens on businesses, with an average expenditure of nearly USD $3 million (USD $2,955,000) in maintenance and updates. The survey, which included 750 IT leaders across the United States, United Kingdom, and Germany, highlights the increasing technical debt faced by organisations due to outdated systems.

According to the study, 65% of surveyed businesses are now investing more than USD $2 million annually in maintaining or upgrading their legacy systems, a figure that has doubled in the past five years. The need for modernisation is accentuated by the rise of Generative AI (GenAI) technology, with 64% of IT decision-makers anticipating that integration with GenAI will free up more than 25% of their current workloads. In response, over half (57%) of global businesses are aiming to update up to 50% of their legacy systems to incorporate GenAI.

The survey, conducted by Censuswide on behalf of SnapLogic, also reveals that a significant number of organisations have already allocated substantial funds towards GenAI implementation. Over half (51%) of the companies surveyed have earmarked more than USD $2 million for this purpose in the current financial year, despite 82% having an annual IT budget of less than USD $5 million.

One of the main challenges highlighted in the study is the incompatibility of legacy systems with modern AI tools. Approximately 32% of respondents reported that up to a quarter of their legacy systems cannot connect to or utilise AI technology. This has driven a considerable portion of businesses to prioritise the integration of GenAI in areas such as general IT, customer support, and customer databases. The sales, media, and marketing sectors show the highest levels of planned investment in GenAI integration, with nearly half (44%) expecting to spend between USD $2-3 million this financial year.

Technical debt, described as outdated code hindering productivity, product quality, or customer satisfaction, remains a significant issue. About 63% of businesses indicated a ‘moderate’ to ‘severe’ negative impact of technical debt on their data stack. The finance sector was identified as particularly affected, with 72% of businesses reporting technical debt challenges, followed closely by the IT and telecoms and manufacturing and utilities sectors at 66%.

Legacy technology was identified as the main contributor to technical debt by 38% of respondents, followed by inefficient processes (36%) and evolving requirements (35%). The survey further notes that 96% of organisations' current systems, applications, and networks rely on some form of legacy technology. This reliance demands a significant amount of time from IT professionals, with over 75% spending between five to 25 hours a week on maintenance and updates.

The study also underscored the productivity challenges linked to the use of numerous software applications. A notable 69% of respondents reported using more than 10 different tools for work, resulting in 86% losing more than five hours a week switching between applications. Almost all businesses surveyed (97%) believe that better integration between work applications would enhance productivity. Also, the majority (88%) of those integrating their existing tech and data stacks with AI tools are observing positive outcomes.

Jeremiah Stone, CTO of SnapLogic, commented on the findings, stating, “Legacy technology is one of the main inhibitors to the adoption of GenAI technology due to data isolation and incompatibility with modern API-centric AI systems. Overcoming this gap is critical to success and is consistent with what I have been hearing first-hand from CIOs and IT leaders across various industries. From these conversations, it’s clear that leaders are adopting innovative measures such as the deployment of Generative Integration to navigate such challenges and deliver on GenAI initiatives to gain a competitive advantage. Ultimately, the race to resolve legacy tech, in order to onboard GenAI, is well underway. It’s now just a question of who will reap the rewards soonest.”