Modernization Delays Have Stalled Business Performance
A new survey reveals that almost all organizations are struggling to update legacy tech while managing rising AI demands.
Updated on Oct. 6, 2026 in Artificial Intelligence
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Kyndryl released a report finding that 98% of organizations have experienced negative business impacts due to delayed technology modernization. Nearly half of global firms are currently behind schedule on these initiatives.
Why it matters
The gap between legacy systems and AI expectations is widening, forcing organizations to balance operational stability with the pressure to adopt new architectures. This tension is creating significant hurdles for enterprises attempting to scale modern technology deployments.
Only 9% of leaders fully understand application dependencies, and 25% report large numbers of undocumented applications. These gaps complicate modernization efforts, as 65% of organizations still approach cloud sovereignty selectively rather than strategically.
The players
Kyndryl
An IT infrastructure services provider that manages complex technology environments and modernization projects for global enterprises.
The details
Organizations are attempting to address these gaps by expanding investments across both legacy and modern platforms simultaneously rather than consolidating them. Simultaneously, firms are beginning to integrate agentic AI — automated systems capable of executing technical tasks autonomously — to manage these complex environments. These deployments are providing early operational benefits by shifting routine technical maintenance from human operators to automated agents.
Timeline
October 6, 2026: Kyndryl released the global Modernisation Report.
The Tech Race
This report highlights the critical friction between established legacy stacks and the surging demand for AI integration. It tracks how organizations are shifting from traditional upgrades to utilizing agentic AI to bridge existing technical gaps.
Organizations are bracing for higher demand on network architectures, with 55% of firms expecting these requirements to grow. Additionally, 63% anticipate increased usage of sovereign cloud environments to satisfy compliance and data residency needs.
The takeaway
The data suggests that technical debt is no longer just an IT maintenance issue but a primary barrier to business performance. Organizations should watch how the 63% shift toward sovereign cloud usage impacts global network architecture standards in the coming year.
Further reading
For more on the current state of enterprise AI adoption, see our coverage in Artificial Intelligence.
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Is now a good time for businesses to invest in large-scale technology modernisation?
