logo
Technical Debt Stifling Path to AI Adoption for Global Enterprises, Says Research

Technical Debt Stifling Path to AI Adoption for Global Enterprises, Says Research

Business Wire02-06-2025

LAS VEGAS--(BUSINESS WIRE)--Technical debt and an over-reliance on outdated legacy systems and applications is blocking enterprise adoption of more innovative technologies like artificial intelligence (AI), according to new research from Pegasystems Inc. (NASDAQ: PEGA), the Enterprise Transformation Company™. The study, conducted with research firm Savanta, was unveiled at PegaWorld®, the company's annual conference in Las Vegas. It surveyed more than 500 IT decision makers across enterprises worldwide on the challenges caused by technical debt and the progress in modernizing legacy technology.
The study found that two in three (68%) respondents say legacy systems and applications are preventing their organization from fully embracing more modern technologies. An overwhelming majority (88%) are also concerned about how their technical debt impacts their ability to keep pace with more agile, innovative competitors – with one in three (29%) indicating either 'clear' or 'significant' concern. More than half (57%) even acknowledge their reliance on legacy systems 'likely' or 'highly likely' causes customers to defect due to the resulting poor experiences.
Other findings from the research include:
Legacy dependency: Almost half (48%) say they can't stop supporting their legacy applications – despite wanting to – because the systems are still business critical. Almost half (47%) say their oldest legacy application is between 11-20 years old, while more than one in ten (16%) run apps between 21-30 years old.
Legacy Ineffectiveness: Two thirds (68%) of respondents say legacy systems are preventing their organization from operating as effectively as possible, citing time spent on maintenance (44%), the siloed nature of disconnected systems, and the cost of maintenance (both 37%) as the leading contributing factors. Just 7% feel legacy applications caused no problems for their business whatsoever.
The customer does not always come first: Three quarters (74%) of respondents agree their business prioritizes investments that improve profitability instead of ways to improve customer experience, such as technologies to help modernize legacy applications. This echoes research conducted by Pega earlier this year among consumers, 69% of whom felt businesses were prioritizing profits over positive customer experiences in their IT investments. It could also help explain why one in three (32%) say the average resolution time to customer queries has increased between 26-50% in the last 12 months – a direct result of staff running multiple or outdated legacy applications.
Quotes & Commentary
'This study highlights how easy it can be for enterprises to get dragged down by outdated systems that are unwieldy to use and resource-intensive to maintain – perpetuating an organizational culture of waste,' said Don Schuerman, chief technology officer, Pega. 'While the bottom-line cost to businesses is significant, the real cost of technical debt is its impact on the experiences that today's customers both demand and deserve. It's time for businesses to change their mindset, harness the power of generative AI through innovations like Pega Blueprint™, to enact fast, efficient legacy transformation, and free themselves from the vicious cycle of technical debt…before they lose their customers for good.'
Notes
Pega surveyed more than 500 IT decision makers worldwide on their legacy transformation projects, how they work, and the challenges and opportunities they present. The results included responses from North America, the United Kingdom, France, Australia, and Germany.
Methodology
For all respondents, Pega defined 'technical debt' and 'legacy systems' as outdated hardware, software, or technology platforms that remain in use due to their critical role in business operations. This is despite challenges such as limited scalability, security vulnerabilities, high maintenance costs, and incompatibility with modern technologies. Technical debt is the implied, often intangible, cost of additional work, or strain using them places upon the business.
Additional Resources
About Pegasystems
Pega is The Enterprise Transformation Company that helps organizations Build for Change® with enterprise AI decisioning and workflow automation. Many of the world's most influential businesses rely on our platform to solve their most pressing challenges, from personalizing engagement to automating service to streamlining operations. Since 1983, we've built our scalable and flexible architecture to help enterprises meet today's customer demands while continuously transforming for tomorrow. For more information on Pega (NASDAQ: PEGA), visit www.pega.com
All trademarks are the property of their respective owners.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Triple-I: US Personal Auto Insurance Industry Generates Profitable Underwriting Result but Faces Headwinds Due to Legal System Abuse, Regulatory Environment
Triple-I: US Personal Auto Insurance Industry Generates Profitable Underwriting Result but Faces Headwinds Due to Legal System Abuse, Regulatory Environment

Business Wire

time15 minutes ago

  • Business Wire

Triple-I: US Personal Auto Insurance Industry Generates Profitable Underwriting Result but Faces Headwinds Due to Legal System Abuse, Regulatory Environment

MALVERN, Pa.--(BUSINESS WIRE)--The United States personal auto insurance industry achieved its strongest underwriting performance in the post-pandemic era, recording a net combined ratio of 95.3 in 2024, but continues to face headwinds due to escalating legal system abuse and a challenging regulatory environment, according to a new Issues Brief published today by the Insurance Information Institute (Triple-I). "The growing impacts of legal system abuse, driven by the exploitive tactics of billboard attorneys, combined with an increasingly complex regulatory environment, will continue to put pressure on the market." 'While the improved 2024 underwriting performance is encouraging, we remain focused on several challenges facing the personal auto insurance industry,' said Triple-I CEO Sean Kevelighan. 'The growing impacts of legal system abuse, driven by the exploitive tactics of billboard attorneys, combined with an increasingly complex regulatory environment, will continue to put pressure on the market. It's essential for auto insurers to continue managing these evolving risks effectively to sustain profitable growth.' Key Performance Highlights Triple-I's Issues Brief showed the personal auto insurance sector's improvement across multiple metrics in 2024: Premium Growth: The industry maintained robust growth momentum with a net written premium increase of 12.8% in 2024, following 14.4% growth in 2023. This marks two consecutive years of double-digit premium growth, outpacing the broader U.S. property/casualty (P/C) industry for the second consecutive year. Loss Performance: Direct incurred loss ratios improved dramatically, falling 21.7 percentage points from a peak of 86% in Q4 2022 to 64% by the end of 2024. This substantial improvement reflects the industry's successful efforts to align pricing with risk and implement effective loss control measures. Historical Context: The personal auto line has outperformed the net combined ratio of the overall U.S. P/C industry in 10 of the past 20 years since 2005. Ongoing Challenges and Emerging Risks Despite 2024's improved financial performance, the industry continues to face significant headwinds which could impact future results: Legal System Abuse: Increased billboard attorney involvement in claims and larger jury awards drove auto liability losses and defense and cost containment expenses up by a range of $76.3 billion to $81.3 billion from 2014 to 2023, according to a 2024 Triple-I/Casualty Actuarial Society study. Regulatory Environment: State regulatory processes have become increasingly challenging, with approval timeframes for rate filings growing 40% longer from 2010 to 2023. Additionally, the percentage of filings receiving less rate impact than requested by carriers has increased by 10 percentage points, potentially limiting market availability and competitive pricing. Frequency vs. Severity Trends: While claim frequency remains below pre-pandemic levels, severity continues to rise year-over-year, with pure premium trends increasing cumulatively by 25.0 points from 2019 to 2024. About the Insurance Information Institute (Triple-I) Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets. About The Institutes The Institutes® are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes and nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world. The Institutes is a registered trademark of The Institutes. All rights reserved.

Specialities Inc. Introducing All Natural Bellentani Products
Specialities Inc. Introducing All Natural Bellentani Products

Business Wire

time16 minutes ago

  • Business Wire

Specialities Inc. Introducing All Natural Bellentani Products

MILLINGTON, N.J.--(BUSINESS WIRE)-- Specialities, Inc. is thrilled to announce the arrival of the All-Natural line of Bellentani cured meat products, a premium Italian delicacy crafted with tradition and authenticity. Beginning July 2025, these exceptional items will be available to consumers nationwide, offering an unparalleled taste experience at an affordable retail price of $6.99 for a 3-oz package (price may vary by variety and location). Our Handcrafted Prosciutto is made with simple ingredients -- Bellentani Prosciutto is minimally processed, free from artificial ingredients, and delivers the rich, savory flavor that has made Italian prosciutto a beloved staple. Produced by Bellentani, a family-owned Company, a heritage brand dating back to 1821 in Modena, Italy, this prosciutto represents centuries of expertise and a commitment to excellence. We are proud to introduce this all-natural prosciutto that stays true to traditional Italian methods, ensuring the highest quality and purity in every slice. Whether enjoyed on a charcuterie board, layered in a sandwich, or paired with fresh fruit and cheese, All Natural Bellentani Prosciutto delivers an unmatched flavor experience for every occasion. Exclusively distributed by Specialities, Inc., All Natural Bellentani Prosciutto has the highest standards of safety and quality. To learn more about this exciting launch, visit or contact Specialities, Inc. at 1-908-647-6485. About Specialities, Inc. Based in Millington, NJ, Specialities, Inc. is a trusted distributor dedicated to bringing high-quality, authentic food products to consumers. With a focus on excellence and tradition, the company continues to deliver premium selections from renowned brands worldwide. Please join us on June 29 – July 1st, 2025, at the Summer Fancy Food Show in the JAVITS CENTER, NYC, to learn more about this and other innovative products.

Specialities Inc. Partnership with Fromagerie Milleret
Specialities Inc. Partnership with Fromagerie Milleret

Business Wire

time16 minutes ago

  • Business Wire

Specialities Inc. Partnership with Fromagerie Milleret

MILLINGTON, N.J.--(BUSINESS WIRE)--Specialities ®, Inc. is thrilled to announce our new partnership with Fromagerie Milleret of France. Founded in 1921 in Franche-Comté by Henri Milleret, the cheese factory continues to be family-owned and has been dedicated to cheese production for three generations. One of the standout features of Fromagerie Milleret is its commitment to quality milk. All the milk used in their cheeses is sourced from local farms within an average radius of 40 km from the dairy and is processed within 48 hours of collection. The predominant Montbéliarde breed of cows, recognized for their distinctive white coats with brown spots, contributes to the exceptional quality of their milk. Fromagerie Milleret specializes in fine cheeses, particularly their signature tender, soft-ripened cheese made with summer truffles from Italy. Their creamy Brie cheese, which is free from colors, preservatives, or additives, exemplifies the excellence of cheese produced by Fromagerie Milleret. With Milleret Fromagerie as a valued partner, Specialities, Inc. will continue to provide U.S. consumers with wonderful opportunities to discover new and exciting products. Founded in 1991, Specialities, Inc. is a respected importer, distributor, and category builder of specialty, value-added food products for the U.S. deli and specialty markets, as well as select quality-driven food service distributors. Our best-in-class products are sourced from both domestic and international origins. Please join us on June 28 – July 1st, 2025, at the Summer Fancy Food Show in the JAVITS CENTER, NYC, to learn more about this and other innovative products.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store