Money to be made in legacy upgrades, thanks to AI and constrained budgets: Ensono

End users are optimising legacy environments rather than outright replacing them

Legacy systems may be seen as a drain on budgets and a barrier to innovation, but new research suggests enterprises are becoming more reliant on them, not less, as they pursue AI initiatives.

Ensono’s second annual State of IT Modernisation Report found that 78% of IT leaders across the UK and USA claim legacy systems play a more important role in their organisations today than they did two years ago.

The report suggests growing AI adoption is increasing the strategic value of legacy environments, with the data, business logic and operational stability embedded in these environments becoming increasingly critical foundations for AI initiatives.

Almost half (46%) of respondents view legacy systems as a critical foundation for AI, as well as an important source of data.

In light of this figure, over half (52%) of organisations are optimising and extending existing systems, and modernising applications where they are, rather than outright replacing them.

What’s driving end user behaviour?

Despite their growing importance, organisations remain under pressure to modernise ageing infrastructure, which is often the cause for slow internal processes.

More than half (54%) of decision-makers said AI has accelerated IT modernisation efforts, up from 39% in 2025.

However, budgets are the largest barrier to modernisation.

Seventy-one percent of respondents said modernisation initiatives exceeded their original budgets, with 27% claiming modernisation exceeded budgets by 51% or more.

UK organisations are significantly more likely to exceed budgets than their US counterparts, with 77% reporting cost overruns compared with 66% in the US.

UK organisations are also more likely to report delayed, scaled-back or abandoned projects, with 67% reporting these outcomes compared with 54% in the US.

Respondents cited both organisational and technical barriers behind stalled modernisation efforts. Almost one in five cite misalignment between IT and business priorities, while 18% put it down to limited visibility or understanding of existing systems and applications.

AI driving upgrade spend

AI investment is accelerating, with 45% of organisations actively scaling AI across their business, and a further 44% investing in targeted, high-impact use cases.

Supporting AI, automation and advanced data initiatives is now the top pressure driving modernisation within businesses, and is also the leading outcome that organisations expect from modernisation.

AI is driving modernisation investment, as well as helping organisations execute projects more efficiently, with more than half saying AI is advancing modernisation through automation and operational efficiencies.

However, many organisations are struggling to generate AI returns, with 99% of businesses citing at least one barrier to AI integration. Workflow integration challenges and infrastructure limitations ranked among the biggest hurdles.

Partners positioned as strategic advisers

According to the report, 99% of organisations are already working with at least one third-party partner to support their modernisation efforts.

Talent shortages are also increasing the reliance on external expertise, with 97% of respondents saying skills gaps have increased modernisation costs, as well as slowed innovation and time-to-market.

The research found that organisations identifying themselves as ‘modernisation leaders’ were significantly more likely to work with IT strategy consultants and to rate support from third-party partners as highly effective.

The finds suggest end users want partners to move beyond simple implementation services.

When asked where providers could deliver more value, 38% cited strategic guidance and support linking modernisation efforts to measurable business outcomes, while 29% called for more tailored and flexible solutions.

For partners, the findings point to customers seeking advisers capable of prioritising investments, navigating legacy complexity, and aligning technology programmes with broader business objectives, rather than simply delivering infrastructure upgrades.

This article originally appeared on our sister site CRN UK.