Painful Legacy: Endava/IDC report shows that maintaining legacy systems is bearing huge costs for businesses

Endava, a leading provider of next-generation technology services, recently launched an IDC InfoBrief, sponsored by Endava, Navigating the Digital Shift. The IDC InfoBrief explores how AI can unlock new potential for organisations, but only if they are supported by the right core infrastructure investments.

Compiled from IDC surveys across Europe, APAC and the Middle East, the paper reveals that digital services revenue is set to rise by 44%, expanding from 34% to half (49%) of organisational revenue by 2029.

However, the paper highlights an urgent need to modernise for greater operational efficiency. Half of all surveyed firms (49%) attribute overspending on digital infrastructure to the cost of maintaining legacy systems, underscoring the need for change.

The research also reinforces the importance of data quality as the backbone of resilient core infrastructure, yet one in three companies report that poor data quality or inadequate infrastructure hampers their ability to achieve higher success rates in generative AI projects.

This could have a significant impact, given that 70% of firms believe generative AI has either begun disrupting their business or will do so in the next 18 months.

With this in mind, AI solution spending aligns with growth expectations, with 51% of organisations prioritising IT investments to enable growth, followed by access to skills (41%) and addressing insufficient internal capacity (38%).

This is also driven by the C-Suite agenda; while transforming business processes is the leading short-term modernisation and transformation initiative in support of digital business ambitions across all personas (as nominated by 54% of IDC survey respondents), 60% of CEOs highlighted deploying AI, machine learning or GenAI, making it their leading priority.

Analysis found that we’ve moved from a state of “generative AI scramble” from 2023-24 to “the AI pivot” in 2025-26, to result in “the AI fuelled business” in three years’ time.

These findings highlight a critical juncture for organisations to move beyond experimentation and adopt a structured approach to AI projects, aiming to operate AI-fuelled businesses. Additionally, 47% of firms identified strong strategic partnerships as the key factor in the success or failure of generative AI projects. 50% of organisations are set to expand and diversify their partner networks, recognising collaboration as key to unlocking AI’s full potential.

Endava CEO John Cotterell commented: “To navigate the fast-changing markets in the era of AI, companies must modernise their core systems and address outdated legacy structures. As we advance towards AI-driven business transformation, core modernisation is a foundational step. Our research shows that businesses are actively looking to invest in AI. However, addressing existing systems through internal modernisation, new technology investments or partner network diversification is a critical first step in doing so. It’s encouraging to see industry leaders recognising this value, and as AI becomes increasingly ubiquitous, core modernisation will continue to rise as a key enabler of success in the digital era.”

To learn more about how modernising for AI-led digital transformation, including strategies for rising above challenges, read the InfoBrief here.