IDC Analyst Brief - The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
This IDC Analyst Brief by Mickey North Rizza explains why a modern, AI-enabled cloud ERP with a clean core is now essential for speed, scale, and resilience. Drawing on recent IDC research, it shows that 69% of organizations are modernizing ERP today and 70% are investing in intelligent systems, with adopters realizing gains like 34% higher operational efficiency and 27% improved productivity. Learn how embedded AI and agentic workflows, native integration, and single-suite strategies unlock innovation while lowering cost and risk—and why delaying modernization compounds technical debt, security, and compliance exposure. Download the Document
This IDC Analyst Brief by Mickey North Rizza explains why a modern, AI-enabled cloud ERP with a clean core is now essential for speed, scale, and resilience. Drawing on recent IDC research, it shows that 69% of organizations are modernizing ERP today and 70% are investing in intelligent systems, with adopters realizing gains like 34% higher operational efficiency and 27% improved productivity. Learn how embedded AI and agentic workflows, native integration, and single-suite strategies unlock innovation while lowering cost and risk—and why delaying modernization compounds technical debt, security, and compliance exposure. ANALYST BRIEF
Sponsored by: SAP
The AI Era: Why Modernized Cloud ERP and
Continuous Innovation Matter
January 2026
Written by: Mickey North Rizza, Group Vice President, Enterprise Software
Introduction
The AI era is here, and the imperative to modernize enterprise systems is
no longer optional — it is essential for survival and future growth.
Organizations must act now to remain competitive, resilient, and
responsive. Speed, scale, and agility are the new table stakes, and a
modern, AI-enabled cloud ERP system with a clean core is the foundation
for success. IDC's 1Q25 Worldwide Application Services Survey found that
over 68% of organizations rate application modernization as a high or top
strategic priority today, with more than 85% rating it a high or top priority
within the next three to five years. Organizations recognize that modern
systems enable faster development cycles, easier integration with new
technologies (such as AI), and support for business agility. The
aforementioned IDC survey found that 69% of organizations plan to
modernize their ERP systems today, as they recognize better total cost of
ownership and enhanced innovation capabilities that future proof their
business for the long term.
The world is moving at an unprecedented pace. As speed, scale, agility,
and relentless innovation become the new requirements for success,
businesses that hesitate risk being left behind. The foundation for thriving in this environment is a modern, AI-enabled
cloud ERP system, a clean core that delivers one version of the truth, regardless of how fast technology evolves. The
urgency to transform is not just a strategic imperative; it's a matter of survival. IDC's May 2025 SaaSPath Survey revealed
that 70% of organizations are investing in intelligent ERP systems to enhance agility, speed, and configurability and that
66% are switching ERP systems for better embedded AI workflows and higher ROI.
Modernized ERP is critical for speed, scalability, and agility. Embracing the cloud enables
organizations to advance their digital transformation and AI strategies, ensuring they
remain competitive, resilient, and responsive.
KEY STATS
» 69% of organizations plan to modernize
their ERP system today (source: IDC's
Worldwide Application Services Survey,
January 2025).
» 70% are investing in intelligent ERP
systems to enhance agility, speed, and
configurability (source: IDC's SaaSPath
Survey, May 2025).
» 66% are switching their ERP systems for
embedded AI workflows and higher ROI.
WHAT'S IMPORTANT
Organizations require a technology strategy
that includes a modern cloud system, AI-
enabled workflows, data management, and
the ability for the provider to keep pace
with innovation.
AT A GLANCE
Sponsored by: SAP
The AI Era: Why Modernized Cloud ERP and
Continuous Innovation Matter
January 2026
Written by: Mickey North Rizza, Group Vice President, Enterprise Software
Introduction
The AI era is here, and the imperative to modernize enterprise systems is
no longer optional — it is essential for survival and future growth.
Organizations must act now to remain competitive, resilient, and
responsive. Speed, scale, and agility are the new table stakes, and a
modern, AI-enabled cloud ERP system with a clean core is the foundation
for success. IDC's 1Q25 Worldwide Application Services Survey found that
over 68% of organizations rate application modernization as a high or top
strategic priority today, with more than 85% rating it a high or top priority
within the next three to five years. Organizations recognize that modern
systems enable faster development cycles, easier integration with new
technologies (such as AI), and support for business agility. The
aforementioned IDC survey found that 69% of organizations plan to
modernize their ERP systems today, as they recognize better total cost of
ownership and enhanced innovation capabilities that future proof their
business for the long term.
The world is moving at an unprecedented pace. As speed, scale, agility,
and relentless innovation become the new requirements for success,
businesses that hesitate risk being left behind. The foundation for thriving in this environment is a modern, AI-enabled
cloud ERP system, a clean core that delivers one version of the truth, regardless of how fast technology evolves. The
urgency to transform is not just a strategic imperative; it's a matter of survival. IDC's May 2025 SaaSPath Survey revealed
that 70% of organizations are investing in intelligent ERP systems to enhance agility, speed, and configurability and that
66% are switching ERP systems for better embedded AI workflows and higher ROI.
Modernized ERP is critical for speed, scalability, and agility. Embracing the cloud enables
organizations to advance their digital transformation and AI strategies, ensuring they
remain competitive, resilient, and responsive.
KEY STATS
» 69% of organizations plan to modernize
their ERP system today (source: IDC's
Worldwide Application Services Survey,
January 2025).
» 70% are investing in intelligent ERP
systems to enhance agility, speed, and
configurability (source: IDC's SaaSPath
Survey, May 2025).
» 66% are switching their ERP systems for
embedded AI workflows and higher ROI.
WHAT'S IMPORTANT
Organizations require a technology strategy
that includes a modern cloud system, AI-
enabled workflows, data management, and
the ability for the provider to keep pace
with innovation.
AT A GLANCE
Page 2#US54075525
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
The Need for Change: ERP Modernization
Legacy ERP systems present significant challenges: inefficiency, data latency, high maintenance costs, and limited access
to innovations. As enterprise data volumes grow — 88% of organizations report increased data and 52% say it's growing
faster than they can use, according to IDC's August 2024 Global Data Validation Survey — the limitations of outdated
systems are more apparent.
Data in legacy systems is typically fragmented, inconsistent, and stored in inaccessible formats, making it difficult for AI to
deliver value. As the data grows, it brings performance degradation, an inability to contextualize the information,
increased security risks, and higher costs overall. Legacy ERP systems not only pose a risk to the organization but also are
becoming technical debt at a much faster pace, which means the organization will struggle to reach its full potential.
Without modernization, organizations risk falling behind and struggling for survival against competitors with advanced
technology. Delaying ERP modernization means lost opportunities across technology, finance, and operations. It also has
a strategic market impact on the organization.
The missed technology opportunities from delayed ERP modernization include:
» Advanced capabilities: Organizations miss the benefits of AI/ML, agentic AI, and real-time data insights, delaying
automation and data-driven decision-making.
» Continuous innovation: Delaying modernization means new features and improvements delivered in the interim
in the cloud are missed.
» Reduction of technical debt: Each year of delay adds legacy interfaces and patches, making future integration and
eventual migration more difficult and costly.
» Closing the technology gap: As modern technology advances, each year of delay widens the gap, rendering future
upgrades more disruptive.
Delaying ERP modernization also presents financial impacts such as high IT operating costs, directly impacting net
income. Other financial impacts include:
» Delayed ROI and cost savings: Postponing migration pushes back efficiency gains, smarter insights, and greater
agility, all of which translate into financial gains. Waiting defers the gains and the compounding value, which can
have a direct impact on revenue and profitability.
» Rising maintenance and infrastructure costs: Outdated systems are more costly to support. Investments must
continue for legacy on-premises infrastructure and custom fixes, diverting funds from innovation to maintenance.
» Risk of last-minute cost spikes: A delayed migration compresses the timeline and drives up project expenses.
Rushed, late-stage projects tend to run over budget, eroding financial benefits.
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
The Need for Change: ERP Modernization
Legacy ERP systems present significant challenges: inefficiency, data latency, high maintenance costs, and limited access
to innovations. As enterprise data volumes grow — 88% of organizations report increased data and 52% say it's growing
faster than they can use, according to IDC's August 2024 Global Data Validation Survey — the limitations of outdated
systems are more apparent.
Data in legacy systems is typically fragmented, inconsistent, and stored in inaccessible formats, making it difficult for AI to
deliver value. As the data grows, it brings performance degradation, an inability to contextualize the information,
increased security risks, and higher costs overall. Legacy ERP systems not only pose a risk to the organization but also are
becoming technical debt at a much faster pace, which means the organization will struggle to reach its full potential.
Without modernization, organizations risk falling behind and struggling for survival against competitors with advanced
technology. Delaying ERP modernization means lost opportunities across technology, finance, and operations. It also has
a strategic market impact on the organization.
The missed technology opportunities from delayed ERP modernization include:
» Advanced capabilities: Organizations miss the benefits of AI/ML, agentic AI, and real-time data insights, delaying
automation and data-driven decision-making.
» Continuous innovation: Delaying modernization means new features and improvements delivered in the interim
in the cloud are missed.
» Reduction of technical debt: Each year of delay adds legacy interfaces and patches, making future integration and
eventual migration more difficult and costly.
» Closing the technology gap: As modern technology advances, each year of delay widens the gap, rendering future
upgrades more disruptive.
Delaying ERP modernization also presents financial impacts such as high IT operating costs, directly impacting net
income. Other financial impacts include:
» Delayed ROI and cost savings: Postponing migration pushes back efficiency gains, smarter insights, and greater
agility, all of which translate into financial gains. Waiting defers the gains and the compounding value, which can
have a direct impact on revenue and profitability.
» Rising maintenance and infrastructure costs: Outdated systems are more costly to support. Investments must
continue for legacy on-premises infrastructure and custom fixes, diverting funds from innovation to maintenance.
» Risk of last-minute cost spikes: A delayed migration compresses the timeline and drives up project expenses.
Rushed, late-stage projects tend to run over budget, eroding financial benefits.
Page 3#US54075525
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
Operational processes also take a hit when ERP modernization is delayed:
» Automation and efficiency gains: By deferring migration, the enterprise continues relying on labor-intensive legacy
processes such as batch processing, which slow decisions and responses to changes.
» Standardization and a clean core: A delay means the organization remains on fragmented, highly customized
workflows instead of simplifying and aligning operations to a modern standard or clean core. This forfeits the agility
and lower process complexity that standardization brings.
» Risk of persisting inefficiencies and growing complexity: Legacy process inefficiencies compound over time. As
years pass, data volumes and custom solutions increase, making the eventual migration more challenging due to
the larger amount of data to convert, more customizations to reengineer, and a greater risk of errors during
cutover.
» Future risk of business disruption from a rushed transition: Delaying compresses the migration into a shorter
window, raising the likelihood of operational disruption. Last-minute transitions carry a higher risk of system
downtime and quality issues due to inadequate testing and planning. In contrast, an earlier migration can be
phased and controlled.
Compounding the aforementioned issues are the organizational impacts of delayed ERP modernization, which include:
» Gradual upskilling and change management: An earlier migration allows staff to adapt to new processes gradually.
Waiting eliminates this phased learning.
» Talent attraction and retention issues: Organizations that delay migration risk talent attrition, as younger IT
professionals prefer modern platforms.
» Loss of knowledge: A delayed transition risks losing critical institutional knowledge needed to support the old
system and execute a successful migration later.
» Cultural resistance and change fatigue: Employees entrenched in decades-old processes may resist abrupt
changes, especially when faced with tight deadlines. Insufficient change management (more likely when rushing)
can lead to confusion, low user adoption, and morale issues.
Finally, there are the market impacts when ERP modernization is delayed, which include:
» Lack of strategic agility: By delaying, the enterprise sacrifices agility in a dynamic market because it is harder to
implement new business models or digital initiatives rapidly. A delay means a slower time to market for
innovations and an inability to fully support modern business strategies.
» Falling behind competitors: In a fast-paced environment, a delayed migration can translate to lost market position.
Competitors that leverage cloud ERP's latest technologies will outpace peers on multiple fronts. Laggards may see
lost market share and growth opportunities as a direct consequence.
» Risk of regulatory and compliance exposure: Running on unsupported ERP software introduces serious
compliance and security risks. This raises audit red flags and vulnerability to cyberthreats, especially in regulated
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
Operational processes also take a hit when ERP modernization is delayed:
» Automation and efficiency gains: By deferring migration, the enterprise continues relying on labor-intensive legacy
processes such as batch processing, which slow decisions and responses to changes.
» Standardization and a clean core: A delay means the organization remains on fragmented, highly customized
workflows instead of simplifying and aligning operations to a modern standard or clean core. This forfeits the agility
and lower process complexity that standardization brings.
» Risk of persisting inefficiencies and growing complexity: Legacy process inefficiencies compound over time. As
years pass, data volumes and custom solutions increase, making the eventual migration more challenging due to
the larger amount of data to convert, more customizations to reengineer, and a greater risk of errors during
cutover.
» Future risk of business disruption from a rushed transition: Delaying compresses the migration into a shorter
window, raising the likelihood of operational disruption. Last-minute transitions carry a higher risk of system
downtime and quality issues due to inadequate testing and planning. In contrast, an earlier migration can be
phased and controlled.
Compounding the aforementioned issues are the organizational impacts of delayed ERP modernization, which include:
» Gradual upskilling and change management: An earlier migration allows staff to adapt to new processes gradually.
Waiting eliminates this phased learning.
» Talent attraction and retention issues: Organizations that delay migration risk talent attrition, as younger IT
professionals prefer modern platforms.
» Loss of knowledge: A delayed transition risks losing critical institutional knowledge needed to support the old
system and execute a successful migration later.
» Cultural resistance and change fatigue: Employees entrenched in decades-old processes may resist abrupt
changes, especially when faced with tight deadlines. Insufficient change management (more likely when rushing)
can lead to confusion, low user adoption, and morale issues.
Finally, there are the market impacts when ERP modernization is delayed, which include:
» Lack of strategic agility: By delaying, the enterprise sacrifices agility in a dynamic market because it is harder to
implement new business models or digital initiatives rapidly. A delay means a slower time to market for
innovations and an inability to fully support modern business strategies.
» Falling behind competitors: In a fast-paced environment, a delayed migration can translate to lost market position.
Competitors that leverage cloud ERP's latest technologies will outpace peers on multiple fronts. Laggards may see
lost market share and growth opportunities as a direct consequence.
» Risk of regulatory and compliance exposure: Running on unsupported ERP software introduces serious
compliance and security risks. This raises audit red flags and vulnerability to cyberthreats, especially in regulated
Page 4#US54075525
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
industries where noncompliance fines are heavy. A delayed move could mean failing to meet new regulatory
requirements or suffering security breaches — strategic risks that can damage the enterprise's reputation and incur
significant costs.
Organizations that adopt modernized cloud ERP now reap efficiency gains, smarter insights, and agility, which translate
into financial returns. They are able to optimize operations and lower costs by migrating off legacy systems and
proprietary hardware, reducing maintenance, and eliminating redundant systems. Those that continue to wait, however,
will defer these gains and risk last-minute cost spikes and business disruptions.
Modern cloud ERP systems empower organizations to scale quickly and adapt to changing market demands. Cloud ERP
enables continuous access to new innovations, including AI and other advanced functionalities. Continuous access to new
innovations through automatic updates from the cloud ERP vendor eliminates the need for costly and disruptive on-
premises upgrades. This allows organizations to leverage emerging technologies as they become available, setting
themselves apart from their competitors.
The urgency for modern enterprise applications is critical. IDC's May 2025 SaaSPath Survey reveals a seismic shift in
enterprise priorities:
» 44% plan to adopt new ERP systems with generative AI (GenAI) in the next 24 months.
» 70% demand intelligent systems for speed and agility and embedded AI workflows.
These numbers are not just trends; they are a call to action for organizations to embrace the change now.
Modernization and AI, Productivity, Efficiency, and Enhanced Integrations
Modernization drives operational growth and efficiency. Enterprises are finding that AI-enabled ERP is improving
decision-making velocity while enhancing employees' work. IDC research indicates that organizations investing in AI-
enabled ERP enable employee productivity and efficiency gains by 30%+.
To continue to deliver such benefits, ERP itself must evolve. That means embedding more built-in intelligence directly
into processes, delivering industry-specific capabilities that address unique business needs, and ensuring stronger
integration and extensibility so enterprises can connect data, applications, and workflows seamlessly.
Modernization of legacy ERP systems into cloud ERP systems creates a sustained, future-proofed technology foundation
from which an organization can quickly scale. This point is underscored in IDC's 2025 SaaSPath Survey, which found that
28% of respondents believe AI-driven capabilities are a critical ERP attribute. The survey noted that 44% of organizations
are investing in AI-powered ERP applications while 22% will replace their current applications if GenAI is not included in
the next release.
Integrating AI into ERP applications also streamlines processes and reduces the need for manual or semi-manual
workflows. According to IDC's April 2025 Future Enterprise Resiliency and Spending Survey, Wave 4, 81% of organizations
expect their application provider's agentic AI to eliminate manual workflows within 18 months. Eliminating manual
workflows, removing reliance on outdated spreadsheets and data, and moving to real-time insights that inform decisions
are critical for success in the modern AI world. When organizations recognize that AI-enabled ERP systems do just that by
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
industries where noncompliance fines are heavy. A delayed move could mean failing to meet new regulatory
requirements or suffering security breaches — strategic risks that can damage the enterprise's reputation and incur
significant costs.
Organizations that adopt modernized cloud ERP now reap efficiency gains, smarter insights, and agility, which translate
into financial returns. They are able to optimize operations and lower costs by migrating off legacy systems and
proprietary hardware, reducing maintenance, and eliminating redundant systems. Those that continue to wait, however,
will defer these gains and risk last-minute cost spikes and business disruptions.
Modern cloud ERP systems empower organizations to scale quickly and adapt to changing market demands. Cloud ERP
enables continuous access to new innovations, including AI and other advanced functionalities. Continuous access to new
innovations through automatic updates from the cloud ERP vendor eliminates the need for costly and disruptive on-
premises upgrades. This allows organizations to leverage emerging technologies as they become available, setting
themselves apart from their competitors.
The urgency for modern enterprise applications is critical. IDC's May 2025 SaaSPath Survey reveals a seismic shift in
enterprise priorities:
» 44% plan to adopt new ERP systems with generative AI (GenAI) in the next 24 months.
» 70% demand intelligent systems for speed and agility and embedded AI workflows.
These numbers are not just trends; they are a call to action for organizations to embrace the change now.
Modernization and AI, Productivity, Efficiency, and Enhanced Integrations
Modernization drives operational growth and efficiency. Enterprises are finding that AI-enabled ERP is improving
decision-making velocity while enhancing employees' work. IDC research indicates that organizations investing in AI-
enabled ERP enable employee productivity and efficiency gains by 30%+.
To continue to deliver such benefits, ERP itself must evolve. That means embedding more built-in intelligence directly
into processes, delivering industry-specific capabilities that address unique business needs, and ensuring stronger
integration and extensibility so enterprises can connect data, applications, and workflows seamlessly.
Modernization of legacy ERP systems into cloud ERP systems creates a sustained, future-proofed technology foundation
from which an organization can quickly scale. This point is underscored in IDC's 2025 SaaSPath Survey, which found that
28% of respondents believe AI-driven capabilities are a critical ERP attribute. The survey noted that 44% of organizations
are investing in AI-powered ERP applications while 22% will replace their current applications if GenAI is not included in
the next release.
Integrating AI into ERP applications also streamlines processes and reduces the need for manual or semi-manual
workflows. According to IDC's April 2025 Future Enterprise Resiliency and Spending Survey, Wave 4, 81% of organizations
expect their application provider's agentic AI to eliminate manual workflows within 18 months. Eliminating manual
workflows, removing reliance on outdated spreadsheets and data, and moving to real-time insights that inform decisions
are critical for success in the modern AI world. When organizations recognize that AI-enabled ERP systems do just that by
Page 5#US54075525
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
bringing more data together for better insights and decisions, reducing and eliminating the need for spreadsheets and
additional workflows, the benefits become significant as a competitive industry differentiator.
Upgrading to cloud ERP brings flexibility, scalability, and cost efficiency. It eliminates the need for up-front hardware
investments and removes the burden of system maintenance and upgrades. In addition, cloud ERP enhances customer
and employee experiences by providing more responsive, resilient, and intelligent systems. IDC's 2025 SaaSPath Survey
finds 44% of organizations are planning to advance their technology based on generative AI as part of the vendor's
product releases. Organizations recognize that AI-enabled applications improve decision-making and empower
employees with advanced technology. AI embedded in cloud ERP delivers rapid insights from growing volumes of data,
enabling quick navigation of disruptions and business challenges that slow the business down and degrade performance.
IDC's December 2024 Future Enterprise Resiliency and Spending Survey found that 41% of organizations are prioritizing
AI-enabled applications to enhance decision-making and align technology with business objectives.
Migrating to a single-suite provider ensures coherent, high-quality data and aligned processes, which are foundational for
better AI outcomes. Within the next two years, according to IDC's 2025 SaaSPath Survey, 83% of organizations surveyed
plan to move their applications to a single-suite provider. A single-suite provider brings increased efficiency and
productivity. In addition, native integration is a must for many organizations, especially as they plan to utilize agentic AI
across the suite data.
Barriers and Solutions
Organizations can modernize 47% of their cloud ERP systems using modular and standardized approaches, while the
remaining portfolios require customized solutions, according to the Top Application Types for Modernization: Worldwide
(IDC #US53053825, January 2025). Customizations have become the de facto standard in legacy systems. While
customizations keep the current infrastructure functioning, they also continue to create technical debt that becomes
expensive to upgrade and run, typically has a latent response time, requires specialized technical expertise to update the
systems, and requires the system code to be modified so the customization is understood. All this continues to add more
costs and complexity to managing and maintaining the legacy solution. IDC research finds that 35% of organizations are
replacing legacy systems with modern cloud systems, thereby removing excess costs and future risk while future proofing
the business. However, not all organizations find it easy to modernize their systems. Considerations that must be
included in the decision to modernize include:
» Reviewing the current system and understanding the gaps
» Working with the vendors to understand their product offerings, innovation, and road maps, as well as their
partners (This includes looking at the vendors'/partners' proven methodologies toward modernization to remove
the risk.)
» Evaluating if vendors have a proven methodology, supported by tools, and scaled by their team or through skilled
partners to de-risk modernization efforts
» Understanding the investment from capex to opex, and the budget shifts required to move to a modern
infrastructure
ANALYST BRIEF The AI Era: Why Modernized Cloud ERP and Continuous Innovation Matter
bringing more data together for better insights and decisions, reducing and eliminating the need for spreadsheets and
additional workflows, the benefits become significant as a competitive industry differentiator.
Upgrading to cloud ERP brings flexibility, scalability, and cost efficiency. It eliminates the need for up-front hardware
investments and removes the burden of system maintenance and upgrades. In addition, cloud ERP enhances customer
and employee experiences by providing more responsive, resilient, and intelligent systems. IDC's 2025 SaaSPath Survey
finds 44% of organizations are planning to advance their technology based on generative AI as part of the vendor's
product releases. Organizations recognize that AI-enabled applications improve decision-making and empower
employees with advanced technology. AI embedded in cloud ERP delivers rapid insights from growing volumes of data,
enabling quick navigation of disruptions and business challenges that slow the business down and degrade performance.
IDC's December 2024 Future Enterprise Resiliency and Spending Survey found that 41% of organizations are prioritizing
AI-enabled applications to enhance decision-making and align technology with business objectives.
Migrating to a single-suite provider ensures coherent, high-quality data and aligned processes, which are foundational for
better AI outcomes. Within the next two years, according to IDC's 2025 SaaSPath Survey, 83% of organizations surveyed
plan to move their applications to a single-suite provider. A single-suite provider brings increased efficiency and
productivity. In addition, native integration is a must for many organizations, especially as they plan to utilize agentic AI
across the suite data.
Barriers and Solutions
Organizations can modernize 47% of their cloud ERP systems using modular and standardized approaches, while the
remaining portfolios require customized solutions, according to the Top Application Types for Modernization: Worldwide
(IDC #US53053825, January 2025). Customizations have become the de facto standard in legacy systems. While
customizations keep the current infrastructure functioning, they also continue to create technical debt that becomes
expensive to upgrade and run, typically has a latent response time, requires specialized technical expertise to update the
systems, and requires the system code to be modified so the customization is understood. All this continues to add more
costs and complexity to managing and maintaining the legacy solution. IDC research finds that 35% of organizations are
replacing legacy systems with modern cloud systems, thereby removing excess costs and future risk while future proofing
the business. However, not all organizations find it easy to modernize their systems. Considerations that must be
included in the decision to modernize include:
» Reviewing the current system and understanding the gaps
» Working with the vendors to understand their product offerings, innovation, and road maps, as well as their
partners (This includes looking at the vendors'/partners' proven methodologies toward modernization to remove
the risk.)
» Evaluating if vendors have a proven methodology, supported by tools, and scaled by their team or through skilled
partners to de-risk modernization efforts
» Understanding the investment from capex to opex, and the budget shifts required to move to a modern
infrastructure