AI Investments Hinder Important IT Modernization Projects

IT modernization remains a key priority for corporate leaders, but a large majority of application and infrastructure modernization projects fail to meet expectations. According to a recent Ensono survey, 61 percent of organizations have had to pause, delay, scale down, or abandon their IT modernization initiatives over the past two years.

Stricter budgets and cost overruns are major hurdles, with over seven out of ten respondents exceeding their original budgets and 27 percent going over budget by 51 percent or more. A primary driver of these financial strains is the diversion of IT budgets toward artificial intelligence projects, as organizations rush to keep pace and pursue faster, more visible returns. Additional challenges include scope creep when legacy systems are moved, and complex new technologies that create too much friction for employees to adopt.

Paradoxically, artificial intelligence can actually accelerate IT modernization by handling tasks like identifying and cleaning up legacy code. Furthermore, experts note that artificial intelligence and modernization are closely linked rather than truly competitive, because advanced artificial intelligence features depend heavily on underlying data, infrastructure, and governance investments that many companies have neglected.