Dive Brief:
- Half of businesses cite technology infrastructure challenges as the top obstacle to bringing costs under control, up from just 31% in last year's study, according to a Deloitte survey of 300 business leaders, published Wednesday.
- Legacy technology infrastructure made it difficult to adapt to new internal business conditions and also limited companies' ability to boost profit margins, according to the report.
- Despite issues with legacy technology, 4 in 5 companies are embracing generative AI and machine learning to boost efficiency and improve customer and employee experiences.
Dive Insight:
Legacy tech accumulates in the enterprise over time, as businesses defer modernizations because of operational or cost concerns.
Eventually, the bill comes due.
Citigroup spent over $12 billion in technology last year, more than half of which was spent on modernization efforts. The bank retired over 400 legacy applications as part of a broader reorganization.
Even as businesses invest in new technology, they still look closely at the price tag to guide decisions. Cost was the top consideration of business leaders assessing new software purchases, according to a Gartner Digital Markets report published last month.
As technology stacks evolve, leaders are looking to generative AI as a way to trim spending.
While most of the cost-cutting expectations are in the mid- to long-term, more than half of C-suite leaders say AI will save them money in 2024, a Boston Consulting Group report found.
