Kyndryl Readiness Report: 90% Confident in IT, but 39% Say It's Future-Ready

Rhea-AI Summary

Kyndryl's 2024 Readiness Report reveals a paradox in IT infrastructure readiness. While 90% of executives believe their IT is best-in-class, only 39% think it's future-ready. The report, based on feedback from 3,200 senior decision-makers and insights from Kyndryl Bridge, highlights key challenges:

1. AI ROI is , with only 42% seeing positive returns.
2. 44% of mission-critical IT infrastructure is approaching or at end-of-life.
3. Over 40% of leaders face technology skills gaps.
4. 65% of executives worry about cyber-attacks, but only 30% feel prepared.
5. Regulatory concerns are high, with 48% believing the pace is too fast.

The report emphasizes the importance of balancing technology and talent, addressing end-of-life technology challenges, and fostering collaboration between business and technology leaders to enhance readiness in a rapidly changing business landscape.

Positive

• 94% of leaders prioritize technology modernization
• 85% of businesses report improved efficiency from modernization projects
• 71% experience greater innovation from IT modernization
• 60% see improved employee or customer experience from modernization efforts
• 66% of executives view regulation as having a positive effect overall

Negative

• Only 39% of executives believe their IT infrastructure is ready for future risks
• Only 42% of businesses see positive ROI from AI investments
• 44% of mission-critical IT infrastructure is approaching or at end-of-life
• Over 40% of leaders face technology skills gaps hindering modernization
• 65% of executives worry about cyber-attacks, with only 30% feeling prepared
• Only 34% see improved data security and compliance from modernization efforts
• Only 27% report sustainability-based outcomes from IT modernization

Insights

Technology Analyst

Kyndryl's 2024 Readiness Report reveals a significant disconnect in IT infrastructure perception. While 90% of executives believe their IT is best-in-class, only 39% think it's future-ready. This gap highlights potential overconfidence and underpreparedness in many organizations.

Key findings include:

• Only 42% of businesses see positive ROI from AI investments, with data privacy and compliance being major barriers.
• 44% of mission-critical IT infrastructure is nearing or at end-of-life, posing significant risks.
• 65% of executives worry about cyber-attacks, but only 30% feel prepared to manage them.

These insights suggest that many companies are struggling with the rapid pace of technological change and may be vulnerable to disruptions. The report emphasizes the need for better alignment between technology investments and business goals, as well as the importance of addressing skills gaps and outdated infrastructure.

For Kyndryl (KD), this report could position them as a thought leader in IT modernization and potentially drive demand for their services. However, the company will need to demonstrate how they can help clients overcome these challenges to capitalize on this opportunity.

Financial Analyst

The Kyndryl Readiness Report provides valuable insights into the IT landscape, but its direct financial impact on Kyndryl (KD) is not immediately clear. However, the report's findings could indirectly benefit the company's business prospects:

• The identified gaps in IT readiness and modernization present opportunities for Kyndryl's services.
• Low AI ROI and barriers to adoption could drive demand for Kyndryl's AI implementation and management services.
• Concerns about cybersecurity and end-of-life infrastructure may increase interest in Kyndryl's security and modernization offerings.

With a market cap of $5.77 billion, Kyndryl's positioning as an expert in addressing these challenges could potentially boost its market value. However, the report doesn't provide specific financial projections or contract wins resulting from these insights.

Investors should monitor how Kyndryl leverages this report to drive sales and whether it translates into increased revenue and profitability in upcoming quarters. The company's ability to capitalize on the identified market needs will be important for its financial performance.

Inaugural global study, with exclusive data from AI-powered Kyndryl Bridge, shows how executives rank risks, prioritize investments, and balance technology and talent

• Security and regulations top lists of executives' concerns
• AI return on investment limited by skills, compliance, compatibility
• End-of-life technology a top challenge for CEOs
• Talent drives overall readiness

NEW YORK, Oct. 16, 2024 /PRNewswire/ -- Kyndryl today released the 2024 Kyndryl Readiness Report, which explores the paradox of why 90% of executives believe their IT infrastructure is best-in-class but only 39% of them think it's ready to manage future risks. The report also shows how IT modernization is helping companies gain a competitive edge, even as just 42 percent of businesses currently see positive return on investment from AI.

In the digital economy, business leaders say they're relying on their IT to mitigate risk, build talent and take advantage of new tools. Yet while 94% of leaders say technology modernization is a high priority for their companies, data from Kyndryl shows that 44% of mission-critical IT infrastructure is approaching 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 Kyndryl 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:

• AI ROI elusive: While 76% of businesses are investing in traditional AI and machine learning, only 42% see a positive return on investment. The biggest barriers to AI adoption remain data privacy concerns (31%), uncertain ROI (30%) and compliance challenges (26%).
• End-of-life technology challenge: Nearly all modern businesses face the challenge of keeping their systems up to date. 64% of CEOs are worried about outdated IT, and Kyndryl Bridge shows that 44% of mission-critical IT infrastructure is approaching or at end-of-life.
• Technology is outpacing training: Over 40% of leaders are experiencing technology skills gaps that hinder modernization progress.
• Security still top concern: 65% of executives are worried about cyber-attacks, and only 30% feel ready to manage those risks.
• Leaders report business-tech alignment: Companies farther along in digital transformation report greater collaboration between business and technology leaders, and greater ROI on technology projects.

"The work we do at Kyndryl to run and transform complex IT infrastructures for thousands of enterprise customers, has given us a deep perspective on how companies can identify opportunities to overcome today's business challenges," said Martin Schroeter, Chairman and CEO of Kyndryl. "Readiness is an ongoing challenge and it's about empowering people, aligning tools with culture and embracing the complex journey of digital transformation across the entire organization."

Report maps out risks and benefits

Cybersecurity tops the list of business concerns: 65% of business leaders are worried about cyberattacks, and only 30% feel ready to manage them. Similarly, 59% express concern over climate and environmental disruptions, yet just 25% believe their systems can effectively respond.

An accelerating regulatory landscape is also top of mind for executives, as major measures come online. While 48% of executives are concerned that the pace of regulation is moving too fast, 66% see regulation as having a positive effect overall.

Despite these challenges, businesses that do modernize are realizing clear benefits from those projects. Looking back on the past year, leaders said they have experienced improved efficiency (85%), greater innovation (71%) and an improved employee or customer experience (60%). However, there is still room to improve as executives see less of an impact in data security and compliance with regulations (34%) and from sustainability-based outcomes such as decreased energy use or emissions (27%).

Even companies that have adopted more advanced IT tools, like automation programs that monitor and solve for issues across an entire IT estate, have room for additional improvement. Kyndryl Bridge shows an average of 8% of IT issues are remediated by automation without human intervention. Kyndryl sees the potential for up to 30% of IT issues being resolved through automation - potentially saving companies billions of dollars per year in maintenance costs and prevented downtime.

Creating a roadmap to readiness
As the data indicates, organizations face tough decisions in their readiness journeys. By plotting out blind spots and difficult trade-offs, the Report offers a roadmap to readiness in a rapidly changing business landscape.

1. Being 'people-ready' is just as important as being 'tech-ready.' IT is everyone's business. Organizations farther along on 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 more prepared to bring employees along with upgrades in technology. Leaders who nurture a skilled workforce are more likely to feel ready for future risks, so investing in talent development, particularly in AI and cybersecurity, is crucial.
2. Weigh the new vs. the familiar: To build the case for smart investments, leaders need to understand how new tools will integrate not only with technology but the company culture, processes and goals. Balancing immediate needs with long-term investments will help leaders navigate complex modernization challenges. And new capabilities, like AI, rely on a solid data foundation; investing in the foundation first may achieve higher ROI in the long term.
3. Reframe the conversation about tech debt: The data shows that in an evolving market, with nearly everyone confronting aging infrastructure, businesses are not alone in the end-of-life technology challenges. Reducing technical debt eliminates operational inefficiencies and unlocks potential for faster growth—an investment in future agility and innovation. This includes fully embracing new capabilities like automation to increase efficiency and reduce downtime.

To read the full report, read Kyndryl's 2024 Readiness Report.

Methodology
The 2024 Kyndryl Readiness Report is based on a comprehensive survey conducted by Edelman DXI, gathering insights from 3,200 senior decision-makers across 25 industries, including healthcare, manufacturing, energy, and finance. The survey, conducted between July 1 and August 12, 2024, captured perspectives from C-suite executives (CEOs, CFOs, CIOs, and CTOs) and senior directors from companies across 18 global markets, including the United States, Brazil, China, Germany, and the UK.

About Kyndryl 
Kyndryl (NYSE: KD) is the world's largest IT infrastructure services provider, serving thousands of enterprise customers in more than 60 countries. The company designs, builds, manages and modernizes the complex, mission-critical information systems that the world depends on every day. For more information, please visit www.kyndryl.com.

Kyndryl Press Contact
press@kyndryl.com

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SOURCE Kyndryl

FAQ

What percentage of executives believe their IT infrastructure is best-in-class according to Kyndryl's 2024 Readiness Report?

According to Kyndryl's 2024 Readiness Report, 90% of executives believe their IT infrastructure is best-in-class.

How many companies are seeing positive ROI from AI investments as per Kyndryl's report?

The report indicates that only 42% of businesses are seeing a positive return on investment from AI.

What percentage of mission-critical IT infrastructure is approaching or at end-of-life according to Kyndryl Bridge data?

Kyndryl Bridge data shows that 44% of mission-critical IT infrastructure is approaching or at end-of-life.

What is the top concern for executives according to Kyndryl's 2024 Readiness Report?

The top concern for executives is cybersecurity, with 65% worried about cyber-attacks and only 30% feeling ready to manage them.

How many senior decision-makers were surveyed for Kyndryl's 2024 Readiness Report?

Kyndryl's 2024 Readiness Report is based on a survey of 3,200 senior decision-makers across 25 industries and 18 global markets.