Global IT infrastructure services provider Kyndryl has released its 2024 Readiness Report, revealing that while most Australian business leaders view their IT infrastructure as top-tier, only 38% believe their systems are prepared to handle future challenges, such as evolving cybersecurity threats and increased regulatory pressure.
The 2024 Kyndryl Readiness Report is based on a survey of 3,200 global senior decision-makers, including a subset of Australian executives, providing insights into business priorities and technological risks.
The findings come as organisations continue to invest in IT modernisation, aiming to balance new technology with talent development and risk management.
The report, which drew on data from Kyndryl’s AI-driven platform, Kyndryl Bridge, showed that 97% of Australian executives prioritise IT upgrades.
However, 63% of critical IT infrastructure is nearing or has reached end-of-life, posing challenges to modernisation efforts and increasing the risk of operational disruptions.
The report calls attention to the need for businesses to focus on better decision-making and building a skilled workforce to address these challenges.
Although 75% of Australian businesses have invested in AI and machine learning, only 38% report a positive return on their investment.
The barriers to AI adoption include uncertain ROI (28%), difficulties with integration (27%), and regulatory hurdles (26%).
Australian companies are particularly concerned about aging IT systems, with 63% reporting that their infrastructure is nearing or at the end of its life, a higher figure compared to the global average of 52%.
Forty-three per cent of Australian executives expressed concerns about talent shortages, particularly in skills related to cybersecurity and risk management, making it one of the highest concerns in the region.
Companies that are further along in their digital transformation report higher levels of collaboration between business and IT departments, which has led to better returns on technology investments.
Jim Freeman, chief technology officer at Kyndryl ANZ, emphasised the importance of modernising IT systems to stay competitive.
“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,” he said.
The report also highlighted that cybersecurity is a top concern for Australian executives, with 72% worried about cyber-attacks, but only 33% feeling confident in their ability to manage these risks.
Climate and environmental disruptions are also on the radar, with 74% of executives expressing concern, although only 35% believe their systems are prepared to respond effectively.
In addition to these challenges, regulatory changes are a growing concern for many businesses. Fifty-eight percent of Australian executives say they are worried about keeping pace with the accelerating regulatory environment, which puts additional pressure on already stretched IT systems and resources.
Despite these concerns, companies that have invested in IT modernisation are seeing benefits.
Over the past year, organisations reported gains in efficiency (85%), innovation (71%), and improved customer and employee experiences (60%).
However, fewer businesses have experienced positive impacts in areas such as data security (34%) or sustainability-related outcomes like reduced energy consumption (27%).
The report pointed to automation as a significant opportunity for improving IT management.
Currently, only 4% of IT issues in Australian companies are resolved through automation without human intervention, but Kyndryl estimates that up to 30% of IT problems could be automated. This shift could lead to substantial savings in maintenance costs and reduce downtime, helping businesses operate more efficiently.
The Kyndryl report provided several recommendations for organisations looking to strengthen their IT readiness in the face of these challenges.
Companies with better alignment between their IT and business strategies tend to see better outcomes.
Developing a skilled workforce, particularly in areas like AI and cybersecurity, is critical for managing future risks.
Leaders should weigh the costs and benefits of integrating new technologies with existing systems. A solid data foundation is essential for ensuring the success of advanced technologies like AI.
Reducing technical debt by upgrading aging systems can lead to improved efficiency and long-term growth. Embracing automation can further enhance these outcomes, reducing downtime and maintenance costs.
