IT complexity, skill shortage holding back tech modernisation projects in India: IDC

Indian firms are grappling with IT/application, skill shortage and lack of right IT tools, factors that are creating huge challenges in accomplishing their information technology (IT) modernisation goals. 

According to research firm International Data Corporation (IDC), at least 20% of chief information officers and IT teams cite IT/application environment complexity, 16.3% cite skill shortage, 16.2% suggests lack of right tool, 14.6% state budget constraints and 11% poor leadership and governance as key barriers to their IT or digital transformation goals.

On a positive note, IDC also said, close to 50% of Indian firms said that they have modernised more than half of their legacy applications, whereas only 26% of the enterprises in Asia/Pacific excluding Japan (APeJ) have done. 
The main drivers of application modernisation are security, digital transformation journey, and IT simplification or standardisation. The factors that are driving organisations to move from legacy applications towards modern applications are expected to remain the same pre- and post-pandemic. Further, global headwinds, such as the IT supply chain challenges, potential inflation, labour shortages, geopolitical tensions, and different Covid variants, further prompt organizations to transform digitally, the report said.

"In today’s digital economy, legacy application modernisation is crucial for business success. An outdated application slows down work, leads to revenue leaks, and fails to tap into additional revenue streams," said Neha Gupta, Senior Research Manager at IDC India. 

"Modernising legacy applications help businesses remain competitive and efficient while improving security and productivity," she added.

Not just IDC, a report released in February this year by edtech platform Udacity with market research company Ipsos, too said that 60% of employers report not having enough skilled employees has stalled a company’s digital transformation initiatives. In addition, 50% of employers report that digital transformation initiatives are held back due to lack of employee adoption or engagement. 

A Global Tech Outlook report by Red Hat, published last month also said that around 26% respondents cite skill-set or talent gaps as the top barrier to IRT or digital transformation, 23% cite integration issues and other IT complexities, while over one-fifth (22%) chose organizational resistance to change or inertia as the key reason stalling tech modernisation or digital transformation projects.

More recently, in October 2022, a study by Boston Consulting Group (BCG) further noted that more than 90% of the digitally advanced companies score for C-suite alignment and collaboration, meaning that C-suite members, globally and locally, collaborate consistently on defining and executing the digital agenda.