In Brazil, 95% trust their IT and 49% feel prepared for the future
Inaugural global study, featuring exclusive data from AI-powered Kyndryl Bridge, shows how executives rank risks, prioritize investments, and balance technology and talent
- Security and regulations top executives’ lists of concerns
- AI ROI limited by skills, compliance, compatibility
- End-of-life technology is one of the main challenges for CEOs
- Talent drives overall readiness
Kyndryl has released its 2024 Readiness Report, which explores the paradox of why 901% of executives worldwide believe their IT infrastructure is best-in-class, but only 391% of them believe it is ready to manage future risks. In Brazil, 95% of leaders are confident in their IT, but only 391% say they are ready for the future. The report also shows how IT modernization is helping companies gain a competitive advantage, even though only 42% of them see a positive return on investment from AI. In Brazil, that number is even higher: 451%.
In the digital economy, business leaders say they rely on their IT to mitigate risk, build talent and take advantage of new tools. However, while 941% of leaders globally and 100% in Brazil say technology modernization is a top priority for their companies, Kyndryl data shows that 441% of mission-critical IT infrastructure is nearing or at end-of-life, increasing vulnerability and raising barriers to modernization. Business leaders say they need help with decision-making and talent development.
The Readiness Report combines feedback from 3,200 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 Highlights:
- Illusory AI ROI: While 76% of companies are investing in traditional AI and machine learning, only 42% see a positive return on investment. In Brazil, 84% of companies are investing in traditional AI and machine learning, but only 45% see a positive return on investment.
- The biggest barriers to AI adoption continue to be concerns about data privacy (31%), uncertain ROI (30%), and compliance challenges (26%). In Brazil, concerns about data privacy are an impediment for even more leaders (43%). Compliance challenges were cited by 31% of them and uncertain ROI by 27%.
- End-of-life technology challenge: Almost all modern businesses face the challenge of keeping their systems up to date — 521% of leaders are concerned about outdated IT, and in Brazil the percentage is lower, 341%. In addition, data from Kyndryl Bridge shows that 441% of mission-critical IT infrastructure in companies worldwide is approaching or at end of life.
- Technology is overtaking training: More than 40% of leaders are facing technology skills gaps that are impeding progress towards modernization. Companies are having the most difficulty finding or developing skills such as: AI/ML/Automation (30%), Cybersecurity & Data Policy (16%) and Data Science/Data Analytics (15%). In Brazil, AI/ML/Automation leads (38%), Cybersecurity & Data Policy and Reskilling/Training are tied at 20%.
- Leaders report alignment between business and technology: The most advanced companies in digital transformation reveal greater collaboration between business leaders and greater ROI on technology projects.
- Speed of technological advances: 62% of companies worldwide struggle to keep up with technological advances. In Brazil, the percentage of those who say it is difficult to keep up with changes is smaller, 43%.
“The work we do at Kyndryl to run and transform complex IT infrastructures for thousands of enterprise clients has given us deep insight into how companies can identify opportunities to overcome today’s business challenges,” said Martin Schroeter, president and CEO of Kyndryl. “Readiness is an ongoing challenge and it’s about empowering people, aligning tools with culture and embracing the complex digital transformation journey across the organization.”
“As companies prepare to face the risks posed by the rapidly changing environment we live in, they face difficult decisions regarding investments, prioritization, lack of specific skills and many others,” said Spencer Gracias, General Manager of Kyndryl Brazil. “Preparation is an ongoing process and Kyndryl’s role is to help our clients every step of the way, managing and modernizing their complex and mission-critical information systems.”
Report maps risks and benefits
Cybersecurity tops the list of business concerns. Globally, 651% of executives are concerned about cyberattacks, and in Brazil, the percentage is even higher, 721%. However, only 301% feel ready to manage these risks — in the country, the number rises to 421%.
Similarly, 59% express concern about climate and environmental disruptions, but only 25% believe their systems can respond effectively. Here, 54% demonstrate concern about the issue, while 27% believe their systems are capable of acting efficiently.
An accelerated regulatory landscape is also a priority for executives as key measures come into effect. While 48% of executives are concerned that the pace of regulation is moving too fast, 66% see regulation having an overall positive effect.
Despite these challenges, companies that modernize are seeing clear benefits from these projects. Looking back at the past year, leaders said they experienced increased efficiency (85%), increased innovation (71%), and a better employee or customer experience (60%). However, there is still room for improvement, as executives see less impact on data security and regulatory compliance (34%) and sustainability-based outcomes such as decreased energy use or emissions (27%).
Even companies that have adopted more advanced IT tools, such as automation programs that monitor and resolve issues across the entire IT estate, have room for further improvement. Kyndryl Bridge shows that an average of 8% of IT issues are fixed by automation without human intervention. In Brazil, 15%. Kyndryl sees the potential for up to 30% of IT issues to be resolved through automation – potentially saving billions of dollars a year in maintenance costs and avoiding downtime.
Creating a Roadmap to Readiness
As the data indicates, organizations face difficult decisions on their readiness journeys. By outlining blind spots and tricky tradeoffs, the report offers a roadmap to readiness in a rapidly changing business landscape.
- Being 'people ready' is as important as being 'technology ready'. IT is everyone's business. Organizations that are further along in their technology journeys also report alignment between business and technology 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 better equipped to keep employees on track with technology updates. Leaders who nurture a skilled workforce are twice as likely to feel ready for future risks, so investing in talent development, particularly in AI and cybersecurity, is crucial.
- Weigh the new versus the familiar: To make smart investments, leaders need to understand how new tools will integrate not only with technology, but also with the company’s culture, processes, and goals. Balancing immediate needs with long-term investments will help leaders address complex modernization challenges. And new capabilities like AI depend on a solid data foundation; investing in the foundation first can yield higher ROI in the long run.
- Reframing the conversation about tech debt: The data shows that in an evolving market with nearly everyone facing aging infrastructure, companies are not alone in facing end-of-life technology 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, such as automation, to increase efficiency and reduce downtime.
To read the full report, visit the Kyndryl Readiness Report.
Methodology
Kyndryl’s 2024 Readiness Report is based on a comprehensive survey conducted by Edelman DXI, gathering insights from 3,200 senior decision-makers across seven industries, including healthcare, manufacturing, energy and finance. The survey, conducted between July 1 and August 12, 2024, gathered perspectives from C-suite executives (CEOs, CFOs, CIOs and CTOs) and senior directors of companies with at least US$1 billion in revenue across 15 global markets, including the United States, Brazil, China, Germany and the United Kingdom.
About Kyndryl
Kyndryl (NYSE: KD) is the world’s largest provider of IT infrastructure services, serving thousands of enterprise customers in more than 60 countries. The company designs, builds, manages and modernizes the complex, mission-critical information systems the world depends on every day. For more information, visit www.kyndryl.com
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