Aiming for GenAI Success? Pay Your Technical Debts First, Shows New SnapLogic Research

• Legacy systems are accruing serious technical debt for businesses, with nearly 2 in 3 spending close to $3 million on maintenance and updates

• Majority of companies need to modernize 50% of their entire technology stack in order to deploy GenAI Applications

SnapLogic, the leader in generative integration, today published new research revealing legacy technology is costing businesses nearly $3 million ($2,955,000) on average and causing substantial technical debt across organizations. The research reveals that spending on updating legacy systems has dramatically increased over the last five years, with almost two-thirds (65%) of businesses now investing more than $2 million on maintaining or upgrading their legacy systems, twice as many as five years prior.

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“Legacy technology is one of the main inhibitors to adoption of GenAI technology due to data isolation and incompatibility with modern API-centric AI systems”

Given that nearly two-thirds of IT decision-makers (64%) expect integration with GenAI technology will free up more than 25% of their existing workloads [Q5], it’s no surprise that GenAI is a key driving factor for businesses to modernize their tools. In fact, over half (57%) of global businesses are looking to update up to 50% of their legacy systems in order to utilize GenAI technology [Q5].

SnapLogic’s Censuswide survey of 750 IT decision-makers in organizations with over 250 employees across the United States, United Kingdom and Germany shows that onboarding GenAI technology is a key focus for businesses in all markets, with over half of organizations (51%) having already allocated over $2 million to implementing it this financial year [Q3a]. This is sizable, considering 82% of IT decision-makers currently have less than $5 million earmarked for their entire annual IT budget.

When it comes to integrating with GenAI systems 32% of respondents report that up to 25% of their legacy systems are unable to connect to or be utilized by AI tools [Q5]. But there’s a strong desire to change this. General IT, customer support and customer databases emerged as the top three areas in which businesses desire integration with GenAI technology [Q7]. The sales, media and marketing sector plan to invest the most in integrating GenAI solutions, with almost half (44%) looking to spend between $2-3 million this financial year [Q3a].

Also Read: Survey Reveals Only 20 Percent of Senior IT Leaders Are Using Generative AI in Production

Legacy Leaves a Lot to be Desired

Technical debt – outdated code that can impact productivity, product quality or customer satisfaction – is a major concern for businesses this year, with 63% revealing that they are experiencing a ‘moderate’ to ‘severe’ negative impact of technical debt on their company’s data stack. This negative impact is felt most in the finance sector, where 72% of businesses are dealing with technical debt challenges, jointly followed by the IT and telecoms and manufacturing and utilities sectors at 66% [Q1].

Furthermore, outdated and legacy technology has topped the list (38%) as the main contributor to the accumulation of technical debt in IT systems, closely followed by inefficient processes (36%) and evolving requirements (35%) [Q2].

This issue of legacy technology is even more concerning considering 96% of all global organizations’ current systems, applications and networks are considered, or rely on, legacy technology to at least some extent. However, updating and patching legacy systems, while necessary, takes up a significant proportion of IT professionals’ time. Over 75% of those surveyed spend between five to 25 hours a week on such endeavors [Q6].

Better Tech Integration the Key to Productivity? 97% of Businesses Believe So.

Legacy technology isn’t the only issue sapping productivity. Respondents shared that they use a staggering number of software applications for work, with 69% claiming to use more than 10 different tools [Q8]. As a result, a significant 86% estimate losing more than five hours a week switching between different applications for work-related tasks [Q9].

Unsurprisingly, almost all businesses surveyed (97%) believe greater integration between their work applications would increase productivity [Q5a] and the overwhelming majority (88%) of businesses that are taking steps to integrate their existing tech and data stack with AI tools are seeing positive results.

“Legacy technology is one of the main inhibitors to adoption of GenAI technology due to data isolation and incompatibility with modern API-centric AI systems,” said Jeremiah Stone, CTO, SnapLogic. “Overcoming this gap is critical to success and is consistent with what I have been hearing, first-hand, from CIOs and IT leaders across a variety of different industries. From these conversations, it’s clear that leaders are adopting innovative measures such as deployment of Generative Integration to navigate such challenges and deliver on GenAI initiatives to gain 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.”

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