HM Revenue & Customs (HMRC) has signed up Capgemini, NiCE, and Route 101 to overhaul its customer service operations as part of a shift to digitize operations.

The multi-year contract sees an expansion of self-service options and increased use of AI, with the aim of making it easier for customers to get the information and support they need.

HMRC’s legacy infrastructure and existing products will be consolidated into a unified, cloud native platform which Capgemini said will improve digital experiences and automation, with more seamless customer interactions.

Capgemini – which already has long-standing ties with HMRC – will handle the implementation, system design, workflow integration, ongoing support, and continuous optimization to enable greater adaptability.

“This new agreement reflects the strength of our long-standing commitment to HMRC innovation and our ability to deliver complex, large-scale, AI-powered transformation programs that create tangible value for citizens," said Rob Walker, managing director of Capgemini in the UK.

"In collaboration with HMRC, NiCE and Route 101, we are building a value partnership that goes beyond technology delivery – one that is focused on long-term outcomes, innovation, and continuous improvement for millions of users across the UK.”

HMRC targets CX improvements

Meanwhile, NiCE CXone, an AI-powered customer experience platform, will be used to manage intelligent self-service, streamline complex enquiries, and provide real-time, AI-driven insights to contact center operations.

“HMRC serves every taxpayer in the United Kingdom, and the scale and importance of its contact center operations demand a platform built for enterprise-grade performance, security, and AI-led innovation," said Darren Rushworth, president of NiCE International.

"CXone is uniquely positioned to deliver on that mandate, helping HMRC modernize service delivery and raise the bar for citizen experience."

Customer experience firm Route 101 will also provide professional services to implement the changes and supply critical telephony infrastructure through its communications provider, Gamma.

According to Capgemini, UK taxpayers will gain an intuitive, reliable, and responsive service to get the support they need, along with streamlined customer journeys and reduced waiting times.

The deal forms part of a long-running push by the tax office to replace ageing systems. In 2024, for example, HMRC announced plans to scrap existing telephone helpline systems and replace them with a new contact center as a service (CCaaS) platform, offering both voice and webchat support.

Last month, it signed a £175 million deal with UK AI firm Quantexa to modernize its infrastructure with a data unification platform and accelerate future AI adoption.

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TD Synnex has invested in a new Microsoft Alliance Growth team in the UK as part of efforts to help channel partners accelerate the expansion of their cloud solution provider (CSP) practices.

The dedicated team will focus on mid-market and SMB partners that the distributor has identified as having strong growth ambitions and potential, equipping them with additional business development, training, and technical support across Microsoft 365, Azure, and security offerings.

In an announcement, TD Synnex said the move builds on its existing Microsoft CSP program as organizations continue to shift their workloads to the cloud, creating fresh revenue opportunities for partners.

"As small and medium-sized businesses continue their transformation and migrate more of their workloads to the cloud, there is a huge opportunity for UK partners to grow their Microsoft CSP business," said Darren Dixon, business unit director for business applications at TD Synnex's Advanced Solutions, UK and Ireland.

"Our investment in the Alliance Growth team will help partners that have a genuine desire to accelerate their plans and support them in taking their business to the next level by providing tailored sales and technical support in their chosen area of focus."

Partners participating in the program will gain access to a dedicated support team that can include a business development manager, customer success manager, and technical pre-sales consultant.

TD Synnex said the team will work closely with partners to understand their business objectives and capabilities before creating bespoke development plans that feature clear milestones and performance measures.

The initiative also offers specialist training, support resources, and a range of tools designed to help partners drive customer engagement and growth opportunities.

Among these is Channel Insights, a recently launched offering that enables Microsoft CSP partners to analyze customer licensing and usage in greater detail to better identify opportunities for additional services and solutions.

According to TD Synnex, the formation of its new Microsoft Growth Alliance team is part of an incremental series of planned investments across its CSP business as Microsoft's channel strategy and cloud priorities continue to evolve.

"This is a targeted, on top investment into our Microsoft CSP practice designed to accelerate growth and profitability," Dixon added. "It aligns directly with Microsoft's own goals and objectives for cloud solutions and will enable us to scale-up our support for CSP partners in driving increased customer satisfaction and retention."

HMRC has awarded a £175 million partnership to UK AI firm Quantexa as the tax office accelerates infrastructure modernization efforts.

The ten-year contract will see HMRC work with Quantexa to modernize its core data infrastructure, reduce tax gaps, and improve operational oversight.

HMRC will also work with Quantexa to set the foundations for future AI adoption, which could improve the organization’s customer service and ability to speed up decision-making and scale out its automated error detection.

“Governments around the world are facing a common challenge: how to turn complex, fragmented data into confident, timely decisions,” said Vishal Marria, founder & CEO at Quantexa.

“By creating context from data and embedding trusted, governed AI, we are helping HMRC improve how public sector organizations make confident, informed decisions. This is a blueprint for how the UK government deploys AI at scale.”

In its announcement, Quantexa pointed to its Decision Intelligence Platform as a core offering that helps organizations to consolidate data and leverage it for advanced analytics.

“Quantexa is at the forefront of British innovation, developing the technologies we need to power next generation digital public services that are smarter and more secure. This partnership will help HMRC to deploy AI safely at scale, bringing its data together to support better decisions, improve efficiency and deliver a stronger service for taxpayers,” said Kanishka Narayan, AI minister within the UK government.

“By using advanced data tools to identify risks and automate routine tasks, HMRC can focus its efforts where they matter most. This is a practical step that paves the way for a better service for taxpayers.”

Home-grown AI expertise

Since it was founded in 2016, Quantexa has risen to the forefront of the UK AI market.

The London-based startup became a unicorn in 2023, reaching a valuation of $1.8 billion, and shortly after announced plans to invest £85 million in the UK and open an AI Innovation Center.

In 2024, PwC UK partnered with Quantexa in a push for more automated decision-making and aggregation of third-party data, with a focus on deploying the firm’s Decision Intelligence Platform throughout PwC UK’s infrastructure.

As sovereign AI becomes a greater focus for businesses around the world, and particularly for those in the UK, Quantexa is reaping the rewards.

As a regional specialist, these high-profile deals come with assurances for UK enterprises that their AI systems meet all data sovereignty requirements.

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Version 1 has announced plans to acquire technology services firm CreateFuture, as the digital transformation consultancy looks to expand its AI-led capabilities and market reach.

The proposed deal, which is subject to regulatory approval, will see the combined organization grow to around 4,250 employees and is expected to generate annual revenues exceeding €500 million. Financial terms were not disclosed.

Founded in 2010, CreateFuture is a practitioner-led, AI-native partner to large enterprise clients, with expertise across sectors such as iGaming, financial services, utilities, and other compliance-focused industries. The firm employs around 550 staff.

Together, the companies plan to deliver AI-driven digital transformation programs at scale across complex, regulated environments in both public and private sectors.

In an announcement, Version 1 said CreateFuture’s expertise will strengthen its market position and enhance its AI-first capabilities.

"This acquisition is a strong strategic fit for Version 1, strengthening our capabilities and expanding the markets we serve,” said Roop Singh, CEO at Version 1. “CreateFuture is an exceptional business, with high-calibre talent, deep client relationships and sector expertise that directly complements our own.

“They have built something genuinely impressive for clients, leveraging AI-driven capabilities with a flexible and agile approach, and have delivered sustained growth ahead of the market.”

The deal marks the next phase of Version 1’s strategy to scale its AI-first services offering across complex and regulated industries where demand for digital transformation services continues to grow.

With the addition of CreateFuture, the company said the combined business will be well-positioned to offer deeper expertise and improved delivery capacity as it continues to expand its footprint across industries.

“This is a growth acquisition and reflects exactly where we are as a business, confident in our people, clear on our strategy and ready for what comes next,” Singh added.

Post-acquisition, the CreateFuture leadership team will remain at the helm of the business and will continue to lead its existing teams and client engagement, Version 1 confirmed.

Commenting on the deal, CreateFuture founder Euan Andrews said the move will help accelerate the company’s own growth ambitions while preserving its core culture.

"We started CreateFuture 16 years ago with a simple belief that the best work happens when great people are trusted to do great work for clients who care about the outcome,” he explained.

“That belief has not changed, and this partnership accelerates our ambition for CreateFuture with a highly culturally aligned partner in Version 1.”

Andrews added that Version 1’s reach and resources will enable CreateFuture to better serve its clients while also unlocking “significant opportunities” for its team members.

“I am genuinely excited about what this means for our people, for our clients, and for the next chapter of the business we have built together," he said.

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Rising memory costs are becoming a major headache for IT decision-makers, forcing some to delay and even scrap internal tech projects.

A survey from Vespertec has found that 53% are already experiencing the impact, with a further 39% expecting to be affected soon.

The biggest issue isn't securing supply, however, which is the major problem for just 12%. Instead, 37% revealed it's the difficulty of justifying higher costs internally.

“Recent reports of server vendors struggling to fulfil certain configurations show how tight parts of the market have become,” said Allan Kaye, co-founder of Vesper Technologies.

"For most organizations, however, cost is emerging as the more immediate challenge. As prices rise, many teams are under increasing pressure to justify spend internally, which is now a more significant barrier than securing supply itself."

The impact is already being felt at a project level, the survey found. Among those who have already been impacted, 72% report having delayed or cancelled projects planned for 2026.

Organizations are attempting to deal with the problem through practical, near-term adjustment, Vespertec noted.

The most common measures include extending the lifespan of existing hardware (49%), delaying or rescoping infrastructure projects (37%), and redesigning systems to reduce memory dependency (31%).

Alongside this, nearly one-in-five are putting up with reduced performance in a bid to remain within budget.

Meanwhile, more than half are consolidating, or considering consolidating, their supplier base, prioritizing reliability and guaranteed access over maintaining a broad range of vendors.

No light on the horizon

Nearly two-thirds of respondents blame AI-driven demand and hyperscaler consumption for the shortage, ahead of geopolitical disruption at 13%.

“What we’re seeing in the market right now is very real pressure on memory supply. Demand is rising across the board, particularly from AI, and manufacturers are having to make difficult trade-offs," said Kaye.

“In many cases, production is being prioritized towards HBM3 to support AI platforms, which is further constraining the supply of DRAM used more broadly across server infrastructure."

Crucially, most decision-makers don't expect things to get better any time soon: 84% reckon the shortage will last for at least 12 to 18 months, and nine-in-ten expect delays to infrastructure projects in the meantime.

A lack of clear information is also making it harder to plan effectively, with only 15% of those already impacted saying they get clear, actionable insight from vendors.

“AI platforms still rely heavily on DRAM, so the impact of these supply constraints is being felt across the wider market. At the same time, new capacity takes time to come online, and demand isn’t slowing. That leaves organizations in a difficult position – waiting for prices to stabilise carries risk, but reacting too quickly can be just as challenging," said Kaye.

“The organizations navigating this most effectively are planning further out. They’re reassessing priorities, what they actually need, working closely with partners to secure the infrastructure they’ll need over the next 12 to 24 months.”

Last month, DataDome warned that scalper bots were scouring the web to scoop up RAM, driving the price up even further.

The firm's Galileo threat research group said it had spotted one scalping operation making more than 10 million scraping results, including checking stock for specific RAM kits every few seconds.

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Liverpool Football Club is building a digital content platform to ensure its engagement with fans and sponsors matches on-pitch successes. During last year’s Premier League title win, the club’s twentieth English top-flight championship victory, Liverpool boasted 1.7 billion engagements across all social media channels, 10% more than the previous season.

Being able to find the right clips at the right time is crucial to this success. The club generated 935 million video views across its branded content last season, 56% more than its nearest rivals. Andy Fletcher, vice-president of technology and digital products at Liverpool FC, says his team strives to ensure supporters are informed and entertained.

“Being able to serve our content is crucial,” he says. “We live in a real-time world. It’s very important for fans that they see this content, and it’s crucial for us as a club that they see us as the destination to get that content via social channels.”

Fletcher uses digital services to help Liverpool maintain a competitive advantage off the pitch. And it’s here that a relationship with technology specialist Wasabi is paying dividends in terms of the club’s engagement with its fans around the globe and its commercial partners.

“We've been able to see a quicker turnaround in terms of the production cycle,” he says. “Our people are spending less time on manual processes and more time creating better content, which ultimately creates greater digital engagement.”

Fletcher says the relationship with Wasabi has developed over the last few years. The key to success has been a knowledge-sharing process between both parties. Detailed technical discussions between specialists from both organizations outlined novel solutions for managing the club’s digital archive and supporting future online engagement plans.

“The collaboration process led to an understanding of the challenges we have around how we create digital experiences for fans around the world, how we optimize the production process, and how we will streamline content discovery and management going forward,” he says.

A future-focused partnership

Back in 2020, Fletcher turned to Wasabi to help Liverpool build its cloud computing infrastructure. While there was a growing awareness that the club needed a better way to manage data and storage, the coronavirus pandemic provided the burning platform for change, as employees had to access digital services securely from disparate locations.

“Historically, most of what we had from a content and storage perspective was based on physical infrastructure,” he says. “But during the pandemic, we had to support remote video-editing work because football games were still going on, and there was demand for us to publish and create content.”

From this initial use case, Liverpool’s relationship with Wasabi continued to deepen. As an early adopter of Wasabi AiR, an AI-powered storage solution that combines hot cloud storage with automated metadata tagging, the club reaps the benefits of 80% lower cloud storage costs and the ability to push content to fans and partners promptly and effectively.

Before implementing Wasabi AiR, Liverpool media creators spent days tagging and searching match footage. This laborious process has been replaced by AI-enabled automation. Wasabi indexes and tags every frame of the club’s video footage, saving more than 5,000 hours of media management time annually.

Today, AI is integrated into Liverpool’s core operations, with asset management used across marketing, e-commerce, partner engagement, and broadcast media delivery. Fletcher gives the example of how metatags in match footage mean the club can push crucial match content to fans as soon as UEFA rules and regulations allow.

“Processes that were manual and slow are now very quick in terms of us being able to cut the packages and the content that we need,” he says. “We can scroll through, we can go to specific moments in the game, and this approach means more insight to fans quickly.”

The tagging process identifies people and logos in each frame. That capability is also crucial for the club’s partners. Fletcher says the club can push content to sponsors that shows how their assets appear, such as on pitch-side advertisements, during a game.

“We can go through that content in a matter of seconds, search for insight, and serve it up,” he says. “We can go to one of our key sponsors and say, ‘Here are your key moments for that game. This is what the clips and the highlights look like,’ and then they can share that content, or use it in the way that they want to.”

End-to-end transformation

Fletcher’s work with Wasabi is part of a continuing effort to transform the club’s off-field activities using digital and data. His role encompasses five key areas. First, he oversees the technology stack for product management and merchandising, such as e-commerce stores, the club website, and the club app.

Another responsibility is ticketing and stadium technologies: “What ticketing system do we use? What's connected at the stadium? And how does all that technology come together as an integrated, fan experience platform?”

Third, Fletcher manages the transformation and delivery function, which focuses on back-office operations and front-office systems. Fletcher’s fourth area of responsibility is managing the digital workforce team, which he describes as IT ops: “Supporting the business with what's required; traditional service desk, plus infrastructure management and connectivity.”

Finally, Fletcher oversees information security and cyber, which means preventing breaches and phishing attacks while keeping staff safe and secure. So, what’s it like running technology for a world-famous football club? The answer, he says, is busy and varied.

“We can be talking about detailed technology integrations and infrastructure, or we can be talking about fan-focused issues related to things like ticketing and the website,” he says, “So, it's a broad role, but we’re focused on specific goals, and I would say technology is viewed as increasingly important from a business perspective.”

Fletcher reflects on the digital transformation his team has delivered. “We've reduced the manual processes, and we've done that really well,” he says. “Wasabi’s singular focus on the cloud is great – the attention, the resources, and being able to design best-in-class storage. The system is fast, secure, reliable, and cost-effective.”

One of the keys to success, says Fletcher, is clear business outcomes. Rather than being distracted by market trends, something that’s easy in a modern technology industry often characterized by AI hyperbole, his team has worked closely with Wasabi to deliver strong results in key areas, including cloud computing and content delivery.

And just like on the pitch, there’s always next season when it comes to the fast pace of data-enabled innovation: “As we move forward, we will go again to the next level of transformation to understand what that iteration looks like.”

Schneider Electric is a leader in energy technology, with a focus on improving sustainability and business efficiency through electrification, automation, and digitalization.

These tenets apply to the firm’s own operations. With over 160,000 employees worldwide, the firm faces the constant challenge of upskilling its workers and training new employees in the latest software.

For nearly ten years, the firm has worked with ERP giant SAP and digital adoption platform (DAP) WalkMe to improve operational efficiency and provide staff with digital e-learning on the go.

ITPro spoke to César Guerra, platform strategy & product owner at Schneider Electric, to learn more about its digital adoption plans and how it’s using WalkMe to achieve them at scale.

“At Schneider, we always put digital adoption at the center of our IT strategy, to connect learning, change management, digital adoption, and support as one team and one voice as standard,” he says.

“So employees can develop proficiency as the system evolves.”

Using WalkMe for ongoing SaaS training

WalkMe provides onscreen, embedded guidance within SaaS platforms to help users learn how they work and become more confident using them.

Schneider Electric began to deploy WalkMe in 2017 to help its North American employees use Salesforce. From this starting point, it slowly began to expand WalkMe to its HR unit and procurement applications across the region, as well as for specific tools such as SAP and Coupa.

At the time this was a limited project, led by Guerra and two colleagues, which slowly began to grow in size as positive results came in.

In 2021, Guerra’s team fielded an SVP from Schneider Electric’s Digital Technology Center, an internal vendor for procuring solutions and IT, who recognized WalkMe’s potential.

“So this person, this SVP, saw what we were doing for North America and said, ‘Hey, why are you just doing it for North America? I want you to do it globally: what do you need?’ And I was like, well, I need people, I need budget and I need support on driving these conversations.”

Guerra adds that at the time, digital adoption was not seen as a high priority, certainly not in the same way as it’s seen now. Without a voice at the table, and a say in the budget, he says that people in his position aren’t able to drive the change that can make a real difference to a business.

“So my boss was a key sponsor to get me to those places, to open those doors,” he says.

“I was very lucky to be very honest, to have this support and this sponsorship and this vision from this excellent top leader and, because of that, I was able to found these centers of excellence, where now I have people in India, I have people in the Philippines, I have people in Mexico.”

The support and services offered by WalkMe has grown in lock step with this project, Guerra says, adding that SAP’s 2024 acquisition of WalkMe helped streamline operations.

“We grow together and we succeed together, we challenge each other,” Guerra tells ITPro.

“So with this acquisition of SAP, what I have noticed is even more support than we used to have, more consolidating [and] integration of the technology. It was very convenient for us because Schneider Electric, we are a great partner of SAP as well.”

Constant upskilling

Though WalkMe can be used for the onboarding stage alone, Schneider Electric has chosen to deploy it as a persistent, embedded helper to keep employees up-to-date on software features.

In systems like SAP S/4HANA and Salesforce, Schneider Electric now uses WalkMe to build user confidence and provide live training in relevant software.

“It basically builds the confidence, no matter the maturity or knowledge of the users,” Guerra says.

“It can be a new joiner, it can be someone that has been there long term and knows the tool, but due to the constant releases, the constant innovation, the constant new versions, WalkMe’s always there to guide them through these advanced rollouts.”

The firm is now seeing an 80% user engagement rate with new tools and has tracked a reduction of 60% in support tickets linked to training.

It’s not all plain sailing. Because Schneider Electric is a decentralized organization, each business unit has its own budget and software can therefore be rolled out in stages rather than simultaneously. But Guerra says that the two largest programs at the firm with SAP have WalkMe enabled, including the core of its operations: manufacturing.

With results like those mentioned above, Guerra and his team have an easier time making a business case for WalkMe in conversations with the C-suite.

“At Schneider Electric, we are a data-driven company,” Guerra says.

“Everything needs to be justified, everything needs to be cost efficient, everything needs to be built on value.”

While this value can be measured in financial terms, he adds, it also extends to user satisfaction as this has a material impact on the level of churn among workers.

Guerra adds that Schneider Electric’s implementation of WalkMe is highly personalized, with tailored advice given according to role.

Through Active Directory, the system also provides onboarding advice with the user’s name and role embedded throughout the advice it gives. The same workflows allow WalkMe to provide the user with role-specific onboarding tasks to complete, in order to get to grips with Schneider Electric’s SaaS tools.

After staff complete a task using WalkMe in-app guidance, Schneider Electric prompts them to complete a survey, so they can detail what worked, what didn’t, and if they know better methods to achieve the same result.

This feedback is used to further tailor the advice that users need.

“If there are key users where they understand, they know and they don't necessarily need the whole walkthrough, we can also automate the experience for them, eliminating unnecessary clicks or filling out information from them,” Guerra says.

Schneider Electric is on a constant mission to improve its internal processes, through process mining and analytics, which it carries out using tools such as SAP Signavio.

Looking ahead, Schneider Electric is trialling how WalkMe Learning Arc, the firm’s AI-native learning offering, can help to automate and personalize training at scale.

Learning Arc will feed into the firm’s ‘UNIFY’ program, which Guerra explains will see it consolidate the disparate ERP systems it uses across its various factory and business sites under SAP S/4HANA.

Currently, Schneider Electric is using SAP Enable Now to create learning content and simulations to prepare users for SAP S/4HANA adoption. Guerra adds that the firm is in year two of the Unify program, with a six-year timeline planned.

The pilot will eventually encompass 50,000 users across Schneider Electric’s global operations, with the new real-time, AI-produced content from WalkMe Learning Arc delivered directly to users.

Openreach is expanding its existing collaboration with Google Cloud to digitize services and support its nationwide full fiber roll-out.

As part of the new deal, the telecoms provider is using Google Cloud’s Vertex AI platform and BigQuery service to streamline emissions tracking for vehicle fleets, as well as an overhaul of its data engineering practices.

According to Openreach, using Gemini Enterprise, Google’s agent orchestration platform, allows data engineers to convert legacy query data into “clean, production-ready code” for use in BigQuery.

Openreach said it has already recorded significant improvements to operational efficiency since the overhaul, allowing engineers to automate repetitive tasks such as manual code maintenance.

"By harnessing the power of AI, and empowering its engineering teams with Gemini Enterprise, Openreach isn't just visualizing data; it is using it to make real-world changes that benefit the British public and the environment,” said Maureen Costello, vice president for UKI and SSA at Google Cloud.

“We are proud to support Openreach’s journey toward a more connected and sustainable future."

Openreach targets vehicle fleet optimization

A key focus of the expanded partnership is optimizing Openreach’s vehicle fleet, the second largest in the UK.

The telco has more than 24,000 vans in operation across the UK, covering nearly 200 million miles each year.

Reducing the environmental impact of the fleet has been a major challenge, according to Openreach. Through the deal with Google Cloud, the firm has migrated telematics data to deliver "meaningful sustainability and efficiency gains”.

Using BigQuery, the firm said it can more efficiently track vehicle mileage and activities, helping identify potential faults, upcoming maintenance, and reduce excessive travel.

Fleet data is also being used to accelerate the firm’s roll-out of electric vehicles across the country, identifying and prioritizing specific areas and regions based on emissions data.

“Openreach can now identify where electric vans can replace diesel vehicles most effectively, based on real-world usage, routes, and charging availability,” Google Cloud said in an announcement.

“Openreach’s rich cloud-based fleet data has helped roll out EVs at a significantly faster rate, with those extra EVs taking c10,000 tonnes of CO2e off the road every year.”

Digital twins speed up fiber roll-outs

Elsewhere, Openreach revealed it has created a digital twin of the UK’s key transportation corridors to drive full fiber roll-outs in regions still awaiting modern infrastructure.

Built using the Vertex AI platform, the digital twin uses data on 35 million homes and businesses, as well as national rail, road, and waterway networks to identify whether specific areas have existing broadband connectivity.

This, Google Cloud said, has helped infrastructure planners “visualize exactly where full fibre can be extended sooner” by identifying eligible homes and businesses.

James Tappenden, managing director for fibre first & shared services at Openreach, said the partnership is helping the telecommunications firm supercharge activities across the country.

“By applying Google Cloud’s technologies to real operational challenges, we’re seeing practical, measurable benefits — from connecting more families to gigabit broadband faster, to cutting vehicle emissions across our workforce,” he said.

“This partnership is helping us work smarter, move quicker, and build a more sustainable network for the UK.”

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Despite big investment in digital transformation, universities are struggling with outdated legacy technology, fragmented digital ecosystems, and personalization.

According to a new study on the digital readiness of higher education institutions from Tata Consultancy Services (TCS), more than six-in-ten universities (61%) remain in the “evolving” stage of digital maturity, despite significant recent investment in transformation initiatives.

Nearly nine-in-ten (88%) universities view technology as supportive or a core enabler of innovation and adaptability, with student experience now a top strategic focus.

Institutions are allocating 29% of their IT budgets to digital student experience and 19% to digital transformation, with AI and machine learning, student engagement platforms, and cybersecurity topping future investment priorities.

Despite financial constraints, low alumni engagement, and regulatory compliance challenges, nearly 80% of education leaders are optimistic about future institutional growth.

“The higher education sector is built on knowledge, innovation, and the promise of transformation," said Ankur Mathur, VP and head of TCS's education unit.

"Today, that foundation is being redefined by digital technologies, where AI, analytics, and cloud platforms enable institutions to deliver personalized experiences, improve operational agility, and make data-driven decisions at scale."

Digital maturity is still evolving

Notably, while eight-in-ten university leaders are optimistic about growth, 57% describe their digital proficiency and 55% their digital student experience as “evolving".

Researchers said that shows there's significant room for improvement. Email emerged as the dominant communication channel, followed by web portals and chat platforms.

Most universities said the biggest challenge to student experience was a fragmented ecosystem, resulting in complex administrative processes.

Meanwhile, the biggest barriers to new technology were budget constraints, followed by scalability and flexibility, legacy systems or infrastructure and resistance to change or change management issues.

Leaders also cited data privacy and security concerns, lack of in-house technology skills, lack of a strategic vision, and vendor-related concerns such as dependence, lock-in, quality, reliability and continuity.

Emerging focus areas

AI and machine learning were the top investment priorities, the study found. There were high adoption rates for digital student registration (96%), financial services (94%), and library resources (83%), with cybersecurity, learning management systems, and online learning capabilities widely implemented.

There were lower rates of adoption, though, for student wellness and health services (57%), career services (64%), and housing and accommodation services (64%).

Only about a third (35%) said technology was a core enabler to organizational responsiveness and adaptability, with 53% saying it was only somewhat supportive, thanks to budget limitations, integration challenges, and staffing gaps.

Alarmingly, 11% felt technology was a limiting factor and 2% said they were just beginning to explore its strategic potential.

"Universities that harness AI and advanced analytics are becoming more agile, able to pivot quickly in response to volatile environments and shifting demands," said Mathur.

"These technologies empower educators to personalize learning, streamline administrative processes, and foster deeper engagement, creating seamless, inclusive, and resilient experiences for students."

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Fewer than three-in-ten in-house IT builds are delivered on time and on budget, new research shows, largely thanks to hidden costs and a drain on productivity.

In a recent survey from Exclaimer, 71% of IT and security leaders reported their in-house builds are eventually abandoned.

That figure rises to an overwhelming 83% in heavily regulated industries like manufacturing and finance, the survey found.

“We commissioned this report to bring clarity to a question every IT leader faces: do you build, or do you buy?” said Paul Hammond, chief product and technology officer at Exclaimer.

“The data shows that while building in-house can feel like control, it often comes at the expense of time, security, and scalability."

What’s the appeal of in-house IT?

One-third (33%) of UK teams build in-house to meet compliance and data residency requirements, while US teams build primarily for integrations with legacy systems (28%).

However, US IT leaders report higher rates of downtime from internal tools, at 74%, compared with 50% in the UK.

Nearly half of IT teams told Exclaimer that they still prefer to build their own tools, but only 8% of those projects are delivered on time and just 11% stay on budget.

More than half take 1.6 to two times longer than planned, and 46% of all in-house IT projects end up costing almost twice the original budget.

Meanwhile, 63% of teams said they spend between 10 and 50 hours per month maintaining internal tools, and 66% require an additional $20,000 to $100,000 a year to keep them running.

Roughly two-thirds (64%) reported security-related downtime, and 31% compliance and data protection challenges.

Only 6% of US builds are finished on time, and 11% in the UK, while 89% of US projects exceed budget, compared with 84% in the UK.

Buying, rather than building

As for those that buy rather than build, the main reasons were speed (30%), access to expertise (29%), and reliability (28%).

UK teams tend to turn to specialist vendors for compliance and control, while US teams cite faster scalability and reduced maintenance.

Both regions show a decisive shift, researchers noted, with buying for efficiency now outweighing building for control.

In terms of security, UK leaders are more likely to say vendors offer greater protection (51%), while US leaders express stronger confidence in their own builds (59%).

“As organizations race to modernize and scale securely, we’re seeing that IT leaders recognize that buying from trusted partners delivers faster deployment, predictable performance, and built-in compliance without the constant drain of maintenance and patching," said Hammond.

"The research shows that these partnerships now represent trust, visibility, and control, backed by enterprise-grade governance and security. The question is therefore not whether IT teams can build, they must decide when they should.”

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AND Digital has announced the appointment of Catherine Rousseau as technical solutions director, as the digital consultancy looks to build on strong recent US growth.

The appointment aims to support the company’s ongoing expansion and scaling of its digital transformation, engineering, and AI capabilities across North America.

Rousseau joins the business from Valsoft Corporation, where she served as AI business unit leader, and has previously held leadership roles at ampliphi RMS and Alithya.

In her new role, AND said Rousseau will define and execute its technical strategy and act as a senior advisor to executive stakeholders. She will oversee solution design, technical delivery, and architectural quality across complex digital transformation programs.

In an announcement, Mike Lee, AND’s US president, described Rousseau’s appointment as a “key step” in the execution of the firm’s ongoing growth ambitions.

“As demand accelerates for enterprise-scale digital transformation and AI-enabled platforms, her ability to lead complex delivery, advise senior stakeholders, and develop technical capability will be instrumental in supporting our clients and scaling AND Digital’s impact across North America,” he said.

Founded in 2014, AND Digital helps organizations close digital skills gaps through engineering, talent development, and collaborative delivery models designed to build long-term in-house capabilities and drive digital transformation.

Its latest leadership hire follows a period of strong momentum, with the company reporting growth of more than 400% year-on-year, driven by increased demand for modern engineering and AI-enabled delivery across North America.

Rousseau will play a key role in building on this growth through new and expanded partnerships, while shaping and leading the delivery of enterprise technology solutions for AND’s US clients, which include the likes of Mastercard and Dynamic Yield.

Her focus will include cloud strategy, application modernization, platform engineering, as well as the adoption of modern engineering and AI-enabled delivery practices.

“AND Digital sits at the forefront of digital transformation across North America, helping organisations unlock measurable value through modern engineering, cloud, and AI-enabled delivery,” commented Rousseau.

“Its collaborative culture and strong focus on outcomes make AND a unique partner for clients and I’m excited to be joining at such a pivotal moment.”

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Unilever has signed a five-year deal with Google Cloud under which it will use the hyperscaler's AI, data, platform, and marketing capabilities to accelerate business transformation.

The aim is to build new capabilities in brand discovery, measurement, and AI-augmented marketing for Unilever’s global portfolio, which includes brands such as Dove, Vaseline and Hellmann's.

"Technology has moved to the core of value creation at Unilever,” said Willem Uijen, chief supply chain and operations officer at Unilever.

“As brands are increasingly discovered and chosen in environments shaped by AI, we must lead this shift," Uijen added.

"This collaboration with Google Cloud sets a new level in how technology can power commerce and growth in the fast-moving consumer goods industry, ensuring Unilever is agile, fit for the future, and equipped to unlock value at every level of the company.”

By migrating its integrated data and cloud platform to Google Cloud, Unilever plans to build an enterprise-wide, “AI-first digital backbone”.

The consumer goods giant said it hopes to generate demand faster, turn data into actionable insights, and respond to market shifts in a more agile way.

Unilever targets 'agentic commerce' gains

The deal will focus on three core pillars: agentic commerce and marketing intelligence, an integrated data and cloud foundation, and advanced AI.

Under the agreement, the two companies will work together to build next-generation marketing capabilities across brand discovery, conversion, and measurement to deal with shifts in technology and consumer habits.

Meanwhile, Unilever will transition key enterprise applications and data platforms to Google Cloud, creating a connected environment for scalable AI deployment across the value chain.

Notably, Unilever said the partnership will help fast-track its adoption of emerging technologies, combining Unilever's expertise with Google's AI capabilities.

“In partnering with Unilever as it boldly reimagines its business processes, we are not just modernizing legacy systems; we are deploying our advanced models, such as Gemini, to create a system of intelligence that reasons, learns, and acts, said Tara Brady, president, EMEA, at Google Cloud.

"This will set a new standard for agility and consumer engagement in the [consumer packaged goods] CPG sector.”

Unilever is one of the world’s largest suppliers of beauty and wellbeing, personal care, home care, and foods products, and has undergone a significant transformation over the last five years.

In 2023, for example, the company signed a deal with Accenture that enabled it to become a cloud-only operation. The move saw the company switch to running most of its cloud estate on Microsoft Azure.

Elsewhere, the consumer goods giant has focused heavily on a range of AI projects through its Horizon3 Labs, and already has 500 AI applications in place.

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Nationwide Building Society and Amazon Web Services (AWS) have announced a new agreement aimed at driving digital service offerings for the high street lender.

Building on an existing partnership between the two organizations, Nationwide said the new deal will help deliver “more personalized experiences” for the its 17 million customers.

The move by Nationwide comes amidst a long-running digitization scheme at the building society. In 2024, for example, the company completed an overhaul of its IT infrastructure as part of a shift to Amazon EKS.

Similarly, just this month, the organization announced plans for a new AI-powered transaction analytics feature for consumers.

Looking ahead, Nationwide plans to further “consolidate” workloads on AWS, modernize services for customers, and equip staff with new AI tools and capabilities.

"As we continue our digital transformation, we need cloud technology that can support our ambition to deliver better customer experiences, while keeping safety and security at the forefront,” said Suresh Viswanathan, group chief operating officer at Nationwide.

“With AWS, we can better support our frontline colleagues to help improve member experience and deliver better outcomes for over 17 million customers."

Nationwide already uses AWS’ cloud-based contact center platform, Amazon Connect, when dealing with customer support enquiries. This gives customer support teams access to a range of AI-powered tools that help drive operational efficiency and staff productivity.

The building society has used Amazon Connect to underpin new customer services, including the recently-launched Call Checker tool. This helps customers establish whether they are speaking to a legitimate Nationwide worker to crack down on scam calls.

"By consolidating and modernizing their workloads on AWS, Nationwide can accelerate innovation, enhance operational resilience, and deliver the digital experiences their members expect—all while maintaining the security and compliance standards that are paramount in financial services,” said Alison Kay, VP and Managing Director of AWS UKI.

Nationwide targets AI, cloud training for staff

As part of the agreement, AWS revealed it will work closely with Nationwide to bolster workforce skill capabilities. This will include access to AWS training schemes to equip them with cloud and AI-related skills.

“This will support Nationwide’s ability to adopt AWS technologies for the benefit of its customers and colleagues,” the hyperscaler said in a statement.

Training schemes running parallel to digital transformation projects have become a recurring theme in announcements such as these.

As ITPro reported last week, Lloyds Banking Group has embarked on a company-wide AI training program as the company looks to integrate the technology across core operations.

The financial services provider said it plans to train 100% of its employees in AI skills by the end of this year alone, enabling staff to easily adopt these tools and improve customer service capabilities.

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Oracle has announced an expansion of a deal with the UK’s Ministry of Defence (MoD) as the government department ramps up IT modernization efforts.

As part of the expansion, a new cloud agreement will enable the MoD to move legacy tech systems to Oracle Cloud Infrastructure (ICO), underpinning its ongoing modernization goals.

The agreement will also support adoption of new AI tools, according to the MoD, and streamline data access and security.

“The OCI agreement strengthens the long standing strategic relationship between MoD and Oracle, and reflects the MoDs multi-vendor strategy to leverage the best available technologies to deliver operational outcomes and greater efficiency,” said Victoria Cope, commercial director for the MoD.

According to Cope, the new agreement also includes commitments to support digital skills development at the MoD, supporting the “wider defence and UK government agenda to build a digitally skilled workforce”.

Oracle doubling down on defence ties

This latest agreement for Oracle builds on long-standing ties with the UK government and broader public sector, including deals with the Cabinet Office and Crown Commercial Service (CCS).

The MoD itself is undergoing significant IT modernization in a bid to enhance operational efficiency, deliver improvements to decision making, and to bolster cybersecurity capabilities.

Overhauling legacy systems has been a long-running challenge for the department, with a 2022 report from the National Audit Office (NAO) warning the MoD had neither the appropriate IT infrastructure nor workforce digital skills capabilities to meet long-term modernization goals.

With the advent of generative AI, the MoD has set a goal to become an “AI-ready organization”, Oracle noted, and one that treats data as a “strategic asset”.

“The UK MoD is moving quickly to use data and AI in far more sophisticated ways to strengthen national security for UK citizens,” said Jason Rees, SVP for technology engineers at Oracle EMEA.

“Migrating workloads to Oracle Cloud Infrastructure will allow it to do this rapidly and at scale, without complicated and costly rewrites. The MoD will benefit from OCI’s in-built security and AI solutions, providing a resilient foundation for faster innovation, improved decision making and mission ready capabilities.”

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More than half (52%) of government CIOs outside of the United States expect budgets to surge in the year ahead, driven in part by increased AI spending.

Analysis from Gartner, which carried out the research, shows governments and public sector organizations targeting rapid modernization and cost savings through emerging technologies. This is despite long-running budgetary constraints in this area.

Arthur Mickoleit, director analyst for government at Gartner, said a combination of “geopolitical shifts and economic volatility” means many government CIOs have been forced to “rapidly adjust their priorities for next year”.

“They are being asked to demonstrate the mission impact of technology investments – including, but not limited to, cost savings and user experience,” he said.

As well as AI, the survey highlighted increased investment in cybersecurity, as another leading priority for CIOs. With government entities facing increasing threats from state-sponsored hackers, 85% of respondents said this was an area for investment.

Elsewhere, investment in cloud transformation is another key objective for CIOs as government departments contend with growing workloads and infrastructure strain as a result of AI.

The survey noted 74% of government CIOs have already deployed or plan to deploy AI tools within the next 12 months. Interest in agentic AI is also skyrocketing, with 49% planning to deploy agents in frontline operations within the next year.

CIOs view this latest iteration of the technology as a potential “enabler of government transformation”, Mickoleit noted.

“This next wave of innovation will be essential for delivering on public sector priorities, especially as expectations are high following years of investments in digital government,” he said.

Agentic AI adoption raises concerns about both cloud and cybersecurity, though, underlining the sharpened investment focus on both these domains.

Don’t fall for the hype

A key takeaway from the Gartner survey centers around rising expectations with emerging technologies, particularly with generative and agentic AI tools.

Government CIOs are hopeful these technologies will unlock marked benefits for workers, with more than half (51%) expecting employee productivity gains in 2026.

The use of AI in building new digital products and services is another area of excitement, cited by 38%, while general improvements to the “overall citizen experience” are also expected, according to 38% of respondents.

While there’s great potential here, Mickoleit warned CIOs need to avoid falling into the hype cycle witnessed in private sector domains.

“CIOs must remain mindful of the hype that can distract from more mature technologies like machine learning and business process automation,” said Mickoleit.

The hype surrounding agentic AI has reached boiling point over the last year. In June, research from Gartner noted that many “AI agent solutions” were essentially just repackaged robotic process automation (RPA) tools and chatbots.

Long-term prospects for agentic AI adoption programs were also questioned, with the consultancy revealing around 40% of all projects would be ditched within two years.

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DIY can often turn out rather expensive – and this is certainly the case when it's an in-house IT build.

According to a survey of 2,000 IT and security decision-makers from Exclaimer, 71% of in-house IT builds fail to deliver on time or on budget, and are eventually abandoned.

In heavily regulated industries like manufacturing and finance, that figure rises to 83%.

The reasons for in-house builds vary from country to country, the study noted. UK teams are more likely to build in-house to meet compliance and data residency requirements, accounting for 33% of projects.

US teams, meanwhile, build primarily for integrations with legacy systems, at 28%.

Yet while nearly half of IT teams say they still prefer to build their own tools, only 8% of those projects are delivered on time and just 11% stay on budget. More than half take between 1.6 and two-times longer than planned and 46% of all in-house IT projects end up costing close to twice what the organization originally budgeted for.

Meanwhile, 63% of teams say they spend between 10 and 50 hours per month maintaining internal tools, and 66% require an extra $20,000 to $100,000 a year to keep them running.

With 64% of organizations reporting security-related downtime and 31% citing compliance and data protection challenges as key barriers, researchers warned what starts as a cost-saving initiative can instead become a long-term liability.

“The data shows that while building in-house can feel like control, it often comes at the expense of time, security, and scalability," said Paul Hammond, chief product and technology officer at Exclaimer.

"At Exclaimer, we’ve seen how easily operational burden creeps in when IT teams are forced to maintain tools that were never meant to scale. This research helps organizations see the full picture, that true efficiency isn’t about owning every line of code, but freeing teams to focus on growth and innovation.”

Buying, not building, is the go-to for some IT leaders

IT leaders that choose to buy rather than build point to speed (30%), access to expertise (29%), and reliability (28%) as key drivers.

In the UK, regulatory pressure is pushing organizations towards specialist vendors for compliance and control at 33%. In contrast, US teams are focused on faster scalability and reduced maintenance.

“As organizations race to modernize and scale securely, we’re seeing that IT leaders recognize that buying from trusted partners delivers faster deployment, predictable performance, and built-in compliance without the constant drain of maintenance and patching," said Hammond.

"The research shows that these partnerships now represent trust, visibility, and control, backed by enterprise-grade governance and security. The question is therefore not whether IT teams can build, they must decide when they should."

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Businesses are at risk of losing their top talent in the wake of failed or botched digital transformation projects, according to new research.

In a recent survey by Emergn, researchers warned that while 82% of IT leaders say digital transformation is “essential for survival” many workers leading the charge on projects are being burned

50% of respondents reported experiencing “transformation fatigue” due to lengthy overhaul processes and tight deadlines.. Meanwhile, 44% said the frequency of change is too high and adds more pressure.

All told, 45% said they’ve suffered from burnout as a result of ongoing internal changes, while 36% said they would consider quitting due to constant upheaval.

Alex Adamopoulos, CEO of Emergn, said the survey highlights the intense pressure placed on employees during transformation programs, warning that many are “mistaking activity for progress”.

“Transformation isn’t supposed to break people,” he said. “It’s supposed to build capacity. But right now, we’re seeing the opposite.”

“This is no longer just a leadership issue – it’s a business model problem.”

Notably, with the advent of generative AI nearly three years ago, the enterprise scramble to adopt new tools is also adding insult to injury for overstretched teams, Emergn found.

The company noted that AI projects are “making things worse” in terms of burnout, with more than half (55%) of respondents noting that AI initiatives are accelerating transformation fatigue.

“Organizations are pushing hard to adopt new technologies without building the human readiness to sustain them,” Adamopoulos said. “This isn’t digital transformation – it’s digital exhaustion.

Digital transformation confusion is rampant

A key factor behind botched projects is a lack of clarity or concrete planning, Emergn noted. Indeed, many enterprises make the mistake of “charging into change without bringing their people along” and creating confusion across the workforce.

Nearly one-third (31%) said they feel uninformed about transformation goals, for example. This marks an increase compared to last year, highlighting a lack of improvement in terms of clarity from leadership.

Elsewhere, 42% said they received “insufficient training” during transformation projects, preventing them from maximizing the use of new tools or solutions.

Delivering a successful digital transformation project has been a key issue for IT leaders for several years now. Research from Gartner last year found that fewer than half of digital initiatives hit outcome targets.

The consultancy’s findings align closely with those from Emergn, noting that the issue lies in ownership of digital transformation projects, with many businesses unclear on roles and responsibilities when embarking on a change program.

Those who have a clear cut strategy and targets, dubbed as “digital vanguards” by Gartner, naturally have far more success.

"This digital vanguard distinguishes themselves from the rest of CIOs and CxOs because they co-own digital delivery," Raf Gelders, VP of research at Gartner, said at the time.

"CIOs and CxOs are equally responsible, accountable, and involved in delivering the digital solutions their enterprises need. This is a radical departure from the traditional paradigm of IT delivery and business project sponsorship that predominates in most enterprises."

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UK business investment in AI is set to skyrocket over the next two years, according to new research from SAP, but many are failing to properly plan – and it could cost them dearly.

Analysis from the tech giant shows UK businesses are, on average, spending £15.94 million on AI this year. Moreover, they expect to increase their investment in the technology by an average of 40% across the next two years.

The report found a good return on investment (ROI), with the average UK business seeing returns of 17% from AI investments, and ROI forecast to almost double to 32% by 2027.

Many said they were already starting to unlock value from AI, with 36% reporting significant improvement in decision-making, 34% in customer engagement, and 31% in time to value.

Notably, businesses are confident in their long-term prospects with AI. More than three-quarters (78%) of executives believe AI will achieve a positive return within one to three years. More than half (52%) say it delivers returns faster than any other technology.

In recent months, agentic AI has become highly popular, with the average UK business expecting an ROI of 11% from agents within two years, equivalent to £2.7 million.

Fragmented AI programs are causing headaches

While the outlook is upbeat, the report warned that a concerning number of AI programs are fragmented, meaning many aren’t unlocking full value from the technology.

Indeed, 42% of UK enterprises described their investment as piecemeal. A key factor here is that around 37% of projects are department-led, according to SAP, while 15% admitted their programs were ad-hoc.

Only 7% have a strategic, enterprise-wide IT plan, the report found. As a result, 70% of UK businesses said they were unsure whether AI is delivering its full potential.

“UK businesses have the ambition, talent, and data to lead in AI, although too many are still treating it as a ‘technology project’ rather than a holistic business transformation,” said Leila Romane, managing director, SAP UK & Ireland.

“The real opportunity is to use AI to reimagine how companies operate, how people work, and how value is created for customers. When UK organizations take that broader, strategic approach to adopting the technology and embedding it throughout their business, the results will become tangible."

Success hinges on a solid strategy

The initial scramble to jump on the generative AI bandwagon may have paid dividends for some enterprises, but those examples are outliers and not the norm.

We’re approaching three years since the arrival of ChatGPT, the big launch that sparked the generative AI race, and yet a concerning number of enterprises still don’t have a clear-cut strategy.

Analysis from Carruthers and Jackson earlier this year found more than a quarter (26%) of enterprises had no formal data strategy. With this in mind, it’s no wonder that many enterprises have grown frustrated at a lack of solid returns.

Research from Appen showed fewer than half of businesses (47.3%) recorded a return on investment with AI in 2024.

While this SAP study paints a positive outlook in terms of ROI, nailing the fundamentals still remains paramount for any IT leader. So what are these?

First and foremost, data quality is a key hurdle for many businesses. In a study from Ataccama, 69% of chief data officers (CDOs) identified data quality as their top challenge.

40% also said they struggle to maintain “consistent” data quality, which has an adverse effect on project outcomes.

Meanwhile, data storage is also another key issue for IT leaders. Analysis from Hitachi Vantara in early 2024 showed data storage capacity requirements were set to surge by around 150% in the coming years, and many enterprises have been woefully unprepared to meet these rising demands.

Accommodating huge AI workloads and storage requirements requires equally huge investment if a “data storage crisis” is to be averted, the company noted.

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Technical debt has been a long-running problem for enterprise IT leaders, and new research shows it’s costing hundreds of millions of dollars each year.

A study from Pegasystems, conducted by research firm Savanta, found an array of challenges caused by technical debt is severely hampering IT modernization efforts.

Legacy transformation projects account for the largest financial hit recorded by enterprises, the study found, equivalent to nearly $134 million globally each year.

These projects are a laborious process, Pegasystems noted, requiring IT teams to overhaul outdated and often resource-intensive systems.

The time-related costs associated with legacy transformation projects was also a major factor in financial losses. Many of these projects fail, the study said, costing around $58 million a year on average.

Meanwhile, simply maintaining legacy systems costs an estimated $56 million a year.

Don Schuerman, chief technology officer at Pegasystems, said the study highlights the steep costs enterprises face if they fail to modernize systems.

“Too few enterprises today consider the hundreds of millions of dollars they hemorrhage every year because of both the direct and indirect financial impact of inefficiencies caused by legacy technologies and technical debt,” he said.

“It’s no longer acceptable to depend on systems that are no longer fit for purpose, take valuable resources to replace, and which could be the difference between your organization’s success or failure.”

A “waste of time, effort, and money”

IT leaders are going to great lengths to both cut down on and simply maintain technical debt, according to Pegasystems, and it’s draining resources.

Indeed, 78% of respondents described the process as a “waste of time, effort, and money,” noting that resources could be better spent on other projects that make the business more effective and efficient.

When asked why they haven’t already scrapped support for legacy systems, more than one-third (36%) said it was too time-consuming to do so. Similarly, more than a quarter (29%) of respondents said they were too busy “fire-fighting” problems caused by these systems to address the root causes.

Notably, one-quarter said executives at their company did not view the issue of technical debt as a priority.

Dangerous dependencies

Another key finding from the Pegasystems survey centered around continued dependency on legacy systems. Simply put, many businesses just can’t afford to modernize.

Around two-thirds (63%) of respondents said they rely on anywhere between one and 10 legacy applications in both the front and back end every day.

More than one-quarter (29%) also depend on anywhere up to 20 legacy applications. This the acute challenges faced when moving to more modern tech stacks, given many business-critical applications rely on these outdated systems.

These difficulties are backed by the growing number of failed transformation projects, the study noted. Fewer than one-in-ten said their efforts to overhaul legacy systems have even put them in a position to retire or replace these applications.

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EDF is one of Europe’s largest energy companies, with an extensive operational footprint across the region, including power stations and energy infrastructure.

Over time, this growth piled legacy systems and disparate data sources together in an increasingly inefficient manner, putting pressure on operations teams to put in work to understand data on a daily basis.

It became clear that the firm needed a new, single pane of glass for its data.

ITPro spoke to Kenny Scott, data governance consultant at 8 Governed Gates (8GG), to learn more about how its data transformation had assisted the power company to accelerate clean energy deployment.

Scott describes how in June 2023, EDF decided on a new digital strategy, with a target of achieving strategic growth, getting the right data to its decision-makers, improving colleague engagement, and ensuring its operations are sustainable.

In response it has created DataVolt, powered by Informatica solutions along with Snowflake and Power BI.

“We want insights on demand, not putting you into a queue, not going into a ticket system that’s going to take us three to four weeks to even get a response,” Scott said, in a talk on the new system.

Scott used the analogy of an ‘engine room’ to describe how the three offerings work in tandem under the hood of DataVolt to ensure employees at EDF can access the data they need.

“Informatica is the foundation of what we do, it’s the entry point, it is the cohesive glue for everything that’s there,” he says, adding that Informatica has become the “tool of choice” for data governance, particularly for handling metadata.

“Snowflake, it’s got the power, power is the key word for us. It's scalable, it's available, there's resources in the marketplace – if we need it, we can train people up to do what we need with it. Then Power BI, we talked about single pane of glass, that's our single pane of glass. It's the one place that we will go from the organization to find out those questions.”

Sustainable generation as a north star

As one might expect, the power generation side of the business is critical for EDF, which has a “north star” to generate 10GW of energy in the UK by 2035.

This necessitates a strong focus on onshore and offshore wind to meet this target – and won’t be met unless EDF can keep its wind turbines operational.

Scott explains that this means engineers need to be assigned to them in a “timely fashion” and with the right equipment for the job. Without all the relevant oils, tubes, and other kit, turbines could be out of operation for another day or more.

“[T]he main driver for this piece of work was it's taking too long to analyze disparate sources and come to a decision that we need in the organization, whereas now because we've got the Power BI and the consolidated data, and we know what it is and equality and who owns it, you can get to that decision point more swiftly.”

With access to historical data and data driven decisions powered by Informatica’s tools, EDF can also use DataVolt to predict its upcoming wind generation figures and to decide on new wind farm sites.

Scott says EDF has started DataVolt operations with its wind and battery teams, as a chance to make targeted changes that bring huge operational benefits to the larger business.

He tells ITPro that some of the initial hurdles for his team included overcoming outdated company cultures regarding data and IT.

“When I first came into EDF, we were faced with stories of ‘we don't have any data’, because it was in spreadsheets or it was on SharePoint.

“There was no cognizance of data being an entity that was of value in the organization. Now, we helped change that conversation. And then, as people say, ‘Ah, but we've got these pain points’. Well, that's because you don't have the data in the right place, in the right format. Then they start to realize, then you start to get the buy-in.”

EDF has spent the past 18 months labelling its legacy data and it into Snowflake, with Informatica then used to explore and effectively use this data.

“A lot of this is hearts and minds, about getting the organization to want to do it,” Scott tells ITPro.

“So if you show them success little and often, and you keep repeating that, then you're going to have a bit of buy-in. And then you're going to have new stakeholders who are going to be interested because people buy from people, but they also buy from the stories of their peers.”

Building on the foundation

Going forward, EDF will continue to work on its data consolidation, with a view to embedding more AI in its platform.

Scott picked out Informatica’s CLAIRE GPT data management assistant as a potential boon for the business, particularly with its ability to pull out data insights for users based on natural language prompts. He expressed hope that its work on labelling and metadata to date will help make future AI adoption easier.

“I think we’re in a fortunate position because we’ve laid down the foundation.”

Any leader looking to engage in a similar project, Scott said, must ensure everyone on their team is informed and onboard from the beginning of a project and that any concerns are raised as early as possible.

“Too many conversations can be submissive, because people either just want to get out of a meeting or they’re not that interested,” he says.

“But then again, you can get some contentious ones – but for me, the contentious ones are where you will solve problems, because the biggest advocates in any organization are the ones that you've turned around from being a detractor from what you're trying to do.”

Local areas can now bid for government support of up to £20 million each, to help them boost regional science and tech expertise.

Through the new Local Innovation Partnerships Fund (LKRI), research funding body UK Research and Innovation (UKRI) is inviting local and regional groups to bid for government funding.

The aim is to support research and innovation projects right across the UK, and UKRI said it's looking for partnerships that help regions build on their existing strengths. It wants proposals that can turn existing research breakthroughs into practical solutions that create jobs and improve people's lives, it said.

"This fund is our Plan for Change in action," said science and technology secretary Liz Kendall. "It empowers local leaders, researchers, and businesses with skin in the game to deliver transformational research that creates jobs and improves lives in their area."

Ten regions across the UK have already been given backing through the fund. They include established innovation hubs in Greater Manchester, the West Midlands, and West Yorkshire, as well as Glasgow City Region, Cardiff Capital Region, and an innovation corridor linking Belfast and Derry-Londonderry in Northern Ireland.

Each of these will be given at least £30 million to invest in their regional innovation strengths, which, said the government, include advanced manufacturing, life sciences, digital technologies, and clean energy.

"Ten regions already have our support and will be able to deliver game-changing innovations to benefit their communities," said Kendall.

"Now we're extending this opportunity to the rest of the country, and I encourage partnerships everywhere to come forward, and show how they can unlock their local expertise to create tomorrow's innovations."

The LIPF is a new program that will invest up to £500 million into the development and scaling of innovation clusters with good potential across the UK. Investment through the fund will go to both established clusters with a proven track record of innovation and to emerging clusters that are in the earlier stages of development but that have significant potential to generate economic value.

The investment can be used for a wide range of activities, from R&D infrastructure and the adoption of new technologies to research commercialization, business growth initiatives and talent and skills development.

The allocation of funds will be handled through a two-stage selection process, with interested areas first submitting expressions of interest – there's more information here.

UKRI said it will then create a shortlist of partnerships and work with them to develop detailed proposals that demonstrate how they can turn research into real-world solutions.

Finally, an independent assessment panel will evaluate the applications to pick the winners based on their potential for economic impact, the strength of local partnerships, and their alignment with national priorities.

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Digital transformation is harming workers, according to a new report.

A survey from Adaptavist has revealed that 64% of knowledge workers have had their lives negatively impacted by technology in the last year.

Three-in-ten said they regularly experience digital overwhelm, and 41% suffer stress and anxiety from notification overload and platform juggling. Almost a quarter (21%) looked for a new job, and 5% quit as a direct result.

Many UK knowledge workers are also experiencing stress and anxiety as a result of pressure to be connected outside of working hours - 19% - and pressure to prove productivity through metrics (18%).

Around the same number said colleagues' communications make them feel incompetent, excluded, or disliked, and 23% said being left to sink or swim with new tools had left them feeling stressed or anxious.

Just under four-in-ten (39%) workers who were considering leaving their jobs said they were experiencing stress, with 46% reporting anxiety and 23% saying they were losing sleep. Only 8% said that technology had made them more productive, with the same number saying it had improved their confidence.

"There is a pressing need to address 'technostress' head-on. Technology rollouts fail not because of bad technology, but because of bad change management," said Neal Riley, innovation lead at the Adaptavist Group.

"The companies that succeed in preventing burnout and disengagement will focus on more than selecting the right tools; they will focus on the human elements, from preserving worker autonomy to creating supportive cultures around technology adoption."

When asked what their organizations should do to make sure employees are enabled and empowered by workplace technologies, 48% listed 'a culture where people are comfortable asking for help' as a top three priority.

"This suggests there is a disconnect between leadership and the general workforce when it comes to technology implementation, which may be driving 'technostress'", said the researchers.

While only 16% ranked 'fewer tools' as a top three action for employers, 41% did suggest more training, and 45% wanted more training resources.

Controlling your own work pattern made a significant difference too, with 42% of happy employees – compared with a 25% regional average – stating that, despite having to use tools that monitor, direct, or organize work processes, they retain complete control over which tasks to do and how to do them.

"In the UK, workers have experienced a steep and steady decline in 'task discretion' since the 1990s, with a body of research suggesting that having little control over how you work can negatively impact mental and physical health," the researchers said.

"While some of this may be attributed to the increased use of digital technologies, our findings indicate that the impact is much more nuanced, and if tools are implemented correctly, they can increase autonomy and empower workers."

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The government has announced 14 new local tech projects as part of a £1 million Regional Tech Booster program.

Designed to support tech businesses and founders and grow local tech ecosystems, the projects will give them targeted training, expert guidance, help to build networks, and support to scale their operations from within their communities.

The program also includes a series of investment events, through a National Investment Corridors initiative, with the first two set to take place in Bristol and Leeds later this year.

"We want UK tech to grow and succeed from any and every corner of the country," said tech for growth minister Kanishka Narayan.

"It's a no-brainer that supporting projects like these, and encouraging more investment across the UK, will catalyse our tech brilliance to boost economic growth and opportunities for communities nationwide."

Projects include a support scheme for early-stage gaming startups in Scotland, with an emphasis on community building, peer learning, ethical strategy, and sustainable business growth.

Another Scottish project is ScotlandIS: Future Ready In Scotland. Aimed at giving tech founders in rural or remote communities the same opportunities as those in more urban or connected areas, this will provide peer networks and targeted training, as well as connecting isolated founders to national support and organizations.

In Wales, Tramshed Tech's AI Innovation Challenge will give businesses practical AI skills through workshops, mentorship, and hands-on learning, while helping startups and scale-ups integrate AI solutions.

"This initiative aims to position Wales as a hub for AI-driven growth and entrepreneurship," the government said.

And there's a similar AI focus in Northern Ireland, where Activate AI combines AI-powered tools with hands-on support, targeting women, minorities, and rural entrepreneurs through masterclasses, peer collaboration, and regional showcases.

Meanwhile, a pilot in the East Midlands is offering a structured support pipeline – from rapid prototyping and pre-launch programmes to scale-up and funding readiness – through workshops, mentoring, tech tours, and showcase events.

Other projects include programs to create pathways from further education to entrepreneurship in Lancashire, unlock growth for tech businesses that are ready to scale in Yorkshire, and accelerate the growth of the advanced connectivity technology industry in Suffolk.

"The sheer volume of strong applications we received shows there is a huge desire to grow tech ecosystems across the whole of the UK," said Dr David Dunn, UK Tech Cluster Group lead on Catalyst Pilot Projects.

"As the projects are delivered, we are excited to share learning across other ecosystems – it is this multiplier effect of knowledge transfer that really makes the Regional Tech Booster initiative valuable."

The Regional Tech Booster programme will also include workshops on tech ecosystem planning and sharing best practice for ecosystem development with authorities across the country. And, said the government, investment corridor events will be rolled out to more regions over this year and next.

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Justifying big money investment in AI projects has reached extreme levels in recent months, with business leaders going so far as to sack employees who refuse to embrace the technology.

According to recent reports from Fortune, Eric Vaughan, CEO of IgniteTech, took drastic action when faced with the prospect of a strategy overhaul during the early days of the generative AI ‘boom’, eventually replacing nearly 80% of staff within the space of a year.

Speaking to the publication, Vaughan noted that “changing minds was harder than adding skills” when embarking on a company-wide AI transformation program.

Intent on driving enthusiasm for the technology, Vaughan revealed that “every single Monday was called ‘AI Monday’” during the early stages of this process, with the company mandating that staff could work only on AI.

“You couldn’t work on budgets,” he told Fortune. “You had to only work on AI projects.”

This isn’t the only instance where business leaders have taken extreme measures to drive AI adoption internally. In a recent podcast appearance, Coinbase CEO Brian Armstrong also admitted to firing workers who refused to engage with new AI tools acquired by the company.

Having purchased enterprise licenses for GitHub Copilot and Cursor, Armstrong urged software engineers to embrace the technology but grew concerned over the pace of adoption.

“I said, ‘AI is important. We need you to all learn it and at least onboard. You don’t have to use it every day yet until we do some training, but at least onboard by the end of the week. And if not, I’m hosting a meeting on Saturday with everybody who hasn’t done it and I’d like to meet with you to understand why’,” he wrote in a company Slack channel, per reports from TechCrunch.

Armstrong conceded that this “heavy-handed approach” to encourage the use of AI caused issues at the crypto trading provider, but nonetheless set the record straight moving forward.

Mandating AI use is guaranteed to create pushback

The instances are both extreme and exceptions to the norm. Regardless, they do serve as an example of how not to implement changes at an organization.

As with any technology-based transformation project, employee pushback is expected at times. In years previous, technology leaders faced significant challenges with regard to cultural changes when embarking on digital transformation projects.

What separates these two examples, however, is the fact that the stakes are far higher compared to previous periods of business transformation, according to Laura Gregg, customer success lead for EMEA at Notion.

Speaking to ITPro, Gregg said employee buy-in isn’t a “nice to have, it’s crucial” given the significant investment required for AI transformation projects.

“Research indicates that around 70-80% of AI initiatives fail, with lack of employee buy-in being a key contributing factor,” she said.

Gregg warned that mandatory enforcement will often prove counterproductive and, on some occasions, create more resistance and “fuel employee skepticism”.

“[AI adoption] should be viewed as both a cultural and technological transformation – with both factors being equally important,” she told ITPro.

Ciaran Luttrell, VP for global SOC operations at eSentire, echoed Gregg’s comments, noting that “forcing anything can have negative results”.

“A carrot, rather than a stick approach, where employees are immersed in a positive culture of AI usage and supported in learning how best to use the technology would be far better,” he told ITPro.

“The reality is that those who embrace the technology and use it effectively will elevate their own value while those who hesitate for too long will risk being left behind.”

Luttrell further reinforced Gregg’s comments on comparisons to digital transformation projects of the past. The combination of high investment requirements and infrastructural overhauls, combined with high failure rates, means AI projects are make or break for many enterprises.

“Digital transformation projects were generally nowhere as transformational and disruptive as the potential that AI brings,” he said.

“Since ChatGPT’s release in late 2022, GenAI has surged from novelty to the levels of mass adoption that took cloud computing 10 years and the internet 15 years,” Luttrell added.

“The fear of jobs being replaced by AI is also very real, where this was less so with other digital transformation projects.”

Good leaders know how to encourage staff

Communication and transparency are key to encouraging workers during an AI transformation project, according to Ben Barnett, regional VP for UK&I at Monday.com.

As with any change in the business, engaging with staff and emphasizing the benefits - and potential challenges - helps ease this transition.

“A good tech leader knows that a successful AI strategy requires an open dialogue with their employees,” he told ITPro.

“Companies need to clearly communicate why AI is being introduced, how it will help people, and what guardrails are in place,” Barnett added. “Involving employees through pilot programmes, workshops, and open feedback channels ensures they have a say in how AI is integrated.”

Ultimately, the benefits of the technology, such as productivity and efficiency improvements, will speak for themselves, Barnett suggested. Simply put, employees will come around in the end.

Gregg noted that appointing dedicated “champions” within the business can also help alleviate concerns and drive adoption rates.

“These early adopters will be instrumental in sharing tangible use cases and building trust among their peers,” she said.

“Their support, alongside continuous investment in training and measuring employee buy-in via ongoing feedback processes, will shape a company culture that embraces change rather than resists it.”

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Pegasystems has announced a strategic collaboration with AWS to drive IT modernization using the cloud computing giant’s generative AI services.

The five-year deal will give users of Pega Blueprint, the company’s application modernization and development platform, access to Amazon Bedrock and AWS Transform.

Bedrock is Amazon’s flagship AI service, offering customers the ability to choose from a selection of in-house and third-party AI models, while Transform uses agentic AI workflows to automate application modernization lifecycles.

According to Pegasystems, the tie-up between the two firms will enable enterprises to dramatically accelerate modernization projects and tackle technical debt - a key issue affecting businesses which hampers AI adoption.

John Higgins, chief of client and partner success at Pegasystems, said the collaboration marks “another major step” in helping enterprises accelerate legacy application transformation goals.

“It’s no longer enough to keep applying incremental changes to legacy systems in the AI era,” he said.

“Clients want to drive strategic business process changes to capture the AI driven productivity improvements; eliminating technical debt, enabling dynamic and intelligent workflows are significant value drivers for organizations seeking to embrace AI to drive business agility.”

What customers can expect from the AWS-Pega deal

Pegasystems has been highly vocal on the potential of AI to transform application and IT infrastructure modernization in recent years.

The firm unveiled the Blueprint platform in early 2024, and has launched a raft of new AI-powered capabilities in the 18 months following its launch.

With this in mind, creating deeper ties between Blueprint and AWS Transform makes sense. The company noted that drawing upon the agentic AI capabilities of the AWS service will help users “accelerate their journey to the cloud faster and more efficiently” by simplifying legacy system modernization.

"Generative AI is not only revolutionizing what customers can build in the cloud, but with services like AWS Transform, it's fundamentally changing how quickly and seamlessly they can get to the cloud in the first place," said Chris Grusz, managing director of technology partners at AWS.

The same logic applies to Bedrock, as it will allow customers to draw upon a range of AI models that can be used across its suite of solutions.

Indeed, Pegasystems said the AI model service will act as the “primary generative AI foundation” powering both Blueprint and the Pega Platform - an AI-based workflow automation service used for building applications.

“Now powered with Amazon Bedrock, clients can securely leverage generative AI large language models (LLMs) from companies including Anthropic, Amazon, Cohere, Meta, and more,” the company said.

“Pega clients can confidently use the power of Amazon Bedrock across the entire app development lifecycle – from requirements analysis to initial workflow design to continual refinement.”

Tackling technical debt

A key talking point for Pegasystems over the last two years has been the impact of legacy infrastructure and technical debt on broader AI strategies.

While enterprises are keen on AI adoption and investing heavily on this front, many are working with outdated tech that simply isn’t up to the task of contending with cumbersome AI workloads.

In a recent survey conducted by Savanta on behalf of Pegasystems, more than two-thirds (68%) of respondents identified legacy systems and applications as a key barrier to adopting new technologies.

Notably, the study found that many enterprises are now caught in a vicious cycle of “legacy dependency”, whereby they can’t embrace new technologies due to the fact that overhauling critical legacy applications may create larger problems.

Nearly half (48%) of respondents highlighted this as a key factor behind sluggish modernization progress. Another 68% said legacy systems are preventing them from improving operational efficiency.

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Engineers understand all too well that machines, and their components, become less efficient over time.

Whether it is a car or an electric motor, parts wear down and eventually, need to be replaced. Engineers and manufacturers design tolerances for this into their designs, along with maintenance schedules and timescales for replacing parts.

Although it might not seem obvious, the same happens with computer software. Applications become less effective over time, not because of physical wear and tear, but because of changes and additions made to code.

This is known as technical debt. Unless developers address it, software becomes less and less usable, and more and more expensive to maintain.

And the problem appears to be increasing.

“Development lifecycles are getting shorter,” says Stephen Gailey, director of systems architecture at Gurucul. “Organizations are much more focused on getting features out to customers quickly and so short-term decision making drives product management more than long term planning. The problem you have is that organizations tend to hide the issue until it is killing them.”

The concept of technical debt first came to the fore in 1992. The US-based software developer Ward Cunningham used the term to explain how taking short cuts in software design builds up costs later on. That is, unless developers take steps to update the software, or “pay down” the debt.

Since then, though, technical debt has taken on a broader meaning, covering legacy technology, software maintenance, vulnerability management and documentation (or, more likely, a lack of it). In the UK, a rising number of IT decision makers forecast rising technical debt, particularly as they rush to adopt AI.

Computer science researchers such as Steve McConnell have split technical debt into two halves: intentional and unintentional debt.

Technical debt: Making shortcuts

Intentional technical debt are shortcuts taken by developers, usually to hit targets such as release schedules, user demands, or budgets. They know the code is less than ideal. But it does the job it needs to do, at the expense of needing more maintenance or development later.

Unintentional technical debt, on the other hand, comes from errors and shortcuts in software design. These are not conscious trade offs, but rather problems that could, and probably should, have been avoided.

The consequences of both forms of debt, though, are software that is harder and costlier to maintain.

“A good thought exercise is to inventory all the cut corners, the decisions you didn’t make, the updates and changes you postponed, and the investments not made over the past decade,” technology consultant Wim Reyes tells ITPro. “The effects are compounding.”

And as with all debt, technical debt compounds, or builds up over time. In this way, the longer software operates, the more debt it accrues. This explains why technical debt is so often associated with older or legacy software, although of course it is possible to have older software that runs perfectly well.

But another aspect to technical debt is the impact of modifications, changes in functionality, or even scope for an application over time.

These changes can lead to poorly designed additions to code, as older software is adapted to take on tasks for which it was never designed. Even well-written applications will show the strain if they have new functionality grafted on to an old code base.

And expanding the scope of an application can reveal design compromises that were not obvious when designers first created the software. Modern applications make extensive use of APIs, for example. These were not commonplace 20 years ago. Today’s applications also need security measures that the original designers would not have been able to anticipate.

Unsurprisingly, adapting older applications to these modern requirements adds to costs, and reduces reliability.

“Technical debt is an even bigger issue than it has been, even if it is overshadowed by cyber or the dreams of AI,” explains Jaco Vermeulen, CTO at consultancy BML. “Both of those are actually big drivers to focus on the boarding but important foundations and remediate tech debt across the domains of core IT, infrastructure, enterprise systems and customer interfaces.”

Technical debt: Time and money

As Vermeulen points out, businesses often believe that they lack the budget – and especially the CapEx – to do more than keep IT systems running. Instead, they adopt a mentality of “if it breaks, we’ll fix it”, he says.

This, though, just perpetuates the problem. Recent research carried out for Pegasystems found that 44% of UK companies spent between 26% and 50% of their time maintaining legacy systems. A further 26% spent between half and three quarters of their time on legacy.

In one in four enterprises, legacy systems also accounted for between six and ten outages, performance issues, or security breaches; in five per cent of companies, the total was more than 20 incidents.

In one in four enterprises surveyed, legacy systems also accounted for between six and ten outages, performance issues, or security breaches; in five percent of companies, the total was more than 20 incidents.

And legacy systems still account for a large percentage of the technology in daily use. Pegasystems found that 29% of teams used one to five legacy applications and 34% used 6-10 legacy packages.

This shows the scale of the challenges posed by legacy systems; Pegasystems found that the vast majority (88%) of CIOs it surveyed believed that technical debt was making it harder for their organizations to keep up with more agile competitors.

“CIOs can tackle technical debt by shifting its perception from a mere IT nuisance to a strategic risk that impacts revenue,” Lee McClendon, chief digital and technology officer at Tricentis, tells ITPro. “This starts with translating technical issues into business impact, using metrics such as downtime, customer churn, or delayed releases to make the case.”

Enterprises, he suggests, need to focus on “smarter decisions earlier on in the development process”, as well as modernising those legacy systems. This will cost money. But failing to act inevitably ends up costing more.

Enterprises, he suggests, need to focus on “smarter decisions earlier on in the development process”, as well as modernising those legacy systems. This will cost money. But failing to act inevitably ends up costing more.

“Ultimately, reducing technical debt is not about chasing perception,” says McClendon. “It is about building systems that can move fast without breaking under pressure."

Technical debt has been a long-running problem for enterprises, and with big money AI adoption projects on the line, the stakes have never been higher.

That’s according to a survey conducted by Savanta on behalf of Pegasystems, which found more than two-thirds (68%) of respondents said legacy systems and applications are hampering their ability to embrace new technologies.

Tackling technical debt is no mean feat, however. According to Pegasystems, many enterprises are now caught in a cycle of “legacy dependency”, meaning they can’t stop supporting business critical legacy applications.

Nearly half (48%) of enterprise respondents specifically highlighted this issue as a key factor in sluggish modernization efforts, while 68% noted legacy systems are preventing them from improving operational efficiency.

Costs are also a common pain point for IT leaders in this regard, with (44%) of respondents having said time spent on maintenance was inflicting a significant impact on budgets.

The scale of the problem varies on a case by case basis, Pegasystems found. Some 47% of respondents revealed their oldest legacy applications were aged between 11-20 years old, meaning they’re simply incapable of meeting modern business requirements.

Don Schuerman, chief technology officer (CTO) at Pegasystems, said the study shows the significant problems faced by enterprises trying to keep pace with current industry trends.

“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,” he said.

Schuerman added that without drastic action, legacy tech will continue to perpetuate an “organizational culture of waste”.

Wasted resources and finances are just one aspect of the issue, alternative research shows. A study from Daisy Corporate Services earlier this year found legacy technology and infrastructure now accounts for more than a third (37%) of overall power consumption at enterprises.

The study detailed serious concerns among IT leaders over compounding costs and the impact of legacy applications on sustainability goals.

The long-term impact of legacy technology

While enterprises face a confluence of technical considerations when addressing legacy technology, the long-term business implications are equally alarming, Schuerman warned.

Simply put, failing to modernize has an adverse effect on customer satisfaction levels.

“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,” he said.

The study found an overwhelming majority (88%) of enterprises are increasingly concerned about the impact of legacy technology on their ability to remain competitive.

More than half (57%) said their reliance on legacy systems were the “likely” cause of customers defecting, for example.

These findings come in the wake of a consumer-focused study from Pegasystems earlier this year, which highlighted a growing sense of frustration over lackluster service delivery.

The study showed consumers are placing increased pressure on enterprises to improve user experiences, with more than three-quarters (77%) of respondents calling on organizations to ramp up investment in this regard.

User experiences have deteriorated significantly in recent years, respondents added, with more than half (56%) revealing interactions with businesses were now worse than they were a decade ago.

The combination of technology considerations and business concerns mean enterprises face a balancing act when embarking on a modernization program, the study found.

Three-quarters (74%) of enterprise respondents said their business prioritizes investments that focus on improving profitability rather than ways to improve customer experiences.

How Pegasystems plans to tackle legacy tech

The findings from the Pegasystems survey were announced at the company’s annual PegaWorld conference in Las Vegas this week. At the conference, the company unveiled a slew of new product updates, with one particular reveal targeting legacy debt specifically.

New capabilities for Pega Blueprint, for example, aim to “significantly accelerate” digital transformation initiatives. Updates to the platform include new agentic AI tools which help enterprises overhaul legacy systems and boost application modernization.

The tool works by allowing enterprises to upload documents, code analysis files, and even application screenshots.

Thereafter, the Blueprint platform “analyzes and synthesizes” these sources together to automatically suggest starting points for application modernization processes.

“This comprehensive approach gives business and IT teams a head start on their transformation projects while casting a wide net of legacy source information, enabling more informed decision and reduced iteration cycles,” the company explained.

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Virtually all UK public sector organizations are still working through digital transformation projects, according to research from SolarWinds, but just 6% say they've fully completed the job.

While six-in-ten public sector IT decision makers told SolarWinds that advancing digital transformation is a top future priority, only 42% say their efforts are well underway.

"These findings show that while digital transformation is high on the agenda, many public sector organizations are still only at the starting line," said Richard Giblin, head of public sector and defence at SolarWinds.

It's no secret that legacy systems are a big problem in the public sector, and SolarWinds’ study found six-in-ten are still relying on traditional, on-premises data center environments, with 42% expecting that to remain the case three years from now.

Meanwhile, a similar number said that workforce skillsets and talent gaps were their biggest problem. The Ministry of Defence (MoD) in particular appeared to be struggling, the report noted, with three-quarters saying these issues are their greatest obstacles.

Security and cost are also tricky issues, both cited by around half of public sector IT leaders.

"The research also echoes broader concerns across the sector that transformation efforts are being held back by legacy mindsets and severe underinvestment." said Giblin

“Skills gaps, legacy infrastructure, and limited budgets are creating a plethora of challenges — and without focused investment and strategic support, the gap between ambition and execution will only grow."

The key to public sector digital transformation?

Recent government research found that public sector legacy tech was holding back productivity, harming public satisfaction in services, and costing the taxpayer £45 billion.

More than one-in-four digital systems used by central government departments were found to be outdated, with this figure rising to seven-in-ten in some cases. The study also highlighted an over-reliance on contractors, largely due to weak salaries and headcount restrictions within departments.

The government is pinning its hopes on AI to help overcome these lingering challenges, however. Prime Minister Keir Starmer recently pledged to send AI teams into every government department to identify areas of improvement.

This move follows the launch of the AI Opportunities Action Plan, which the government said would allow the public sector to spend less time doing admin and more time delivering essential services.

However, the SolarWinds report found that public sector IT decision makers are skeptical. Only three-in-ten said they currently view AI integration as a top priority, while more than half thought that observability was more important.

"The opportunity is there, but we need to act now to equip public sector teams with the tools, training and visibility they need to move forward with confidence," said Giblin

“The public sector plays such an important role in the daily lives of millions - from healthcare and education to social services and public safety. Ensuring the modernization of these essential services isn’t just about efficiency, it's about delivering better, faster and more accessible experiences for all."

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When it comes to digital transformation, there are few organizations that face the unique challenges of the UK’s Ministry of Justice (MoJ)

The MoJ operates around 1,200 sites, across which 96,000 civil servants and 6,500 contractors work, with this number changing all the time. But to make matters even more complex, it also provides network services to the UK’s prison population – handling the laptops, Wi-Fi, and more for 87,000 prisoners.

It’s uniquely difficult to deliver such a wide range of services and online environments. Prisoners require secure, digital and educational services, staff including prison officers need secure access to corporate networks, and on top of it all the MoJ is responsible for cloud application services for UK citizens involved in the justice system.

“If you’re unlucky, anyone could be our client, so to speak,” says Tom Churnside, head of network architecture at the Ministry of Justice UK. “There are things from legal aid to compensation, and so on – it really is a very diverse set of users.”

Three to four years ago, the MoJ worked with several managed service providers (MSPs) delivering its WAN, LAN, and secure edge, alongside a legacy MPLS network.

Nava Ramanan, deputy director, Digital Infrastructure & Security Operations at the Ministry of Justice UK tells ITPro this was hugely inefficient,

“In some sites you may find multiple sets of network connectivity, costing taxpayers,” he says, adding that it reduces visibility for security teams.

Churnside explains that in the past, different physical infrastructure was used within prisons depending on one’s use case, which proved inefficient, costly, and incredibly hard to control.

Driven by this need to move away from its legacy approach toward secure access service edge (SASE) and a zero trust approach, the MoJ issued an invitation to tender which was won by Palo Alto Networks.

A chief aim of the MoJ’s digital transformation with Palo Alto Networks has been to make the user experience better while improving IT security and this required Ramanan’s team to maintain the same level of logical separation while dropping the need for redundant hardware.

In collaboration with Palo Alto Networks, the MoJ has now moved its networking config to a single cloud platform, improving its visibility, reducing complexity, and speeding up its deployment capabilities.

The MoJ’s entire user estate including mobile devices is now also, explains Churnside, connected to the cloud via Palo Alto Networks’ Prisma Cloud. This means its users can connect to the organizational systems remotely.

Over the past two years, the MoJ has expanded the service across 250 to 280 sites, accelerated by its new cloud-based approach. This is no small feat, as Ramanan explains.

“So for example, if you want to roll out Wi-Fi into prisons you can think about the width of the prison walls, how the Wi-Fi signals would penetrate,” he says. “So you need to put more access points that's another thing.”

Churnside adds that operating and expanding networks across prisons comes with unpredictable issues, such as the need for additional staff to escort network engineers seeking to install cables around sites.

Facing down cyber threats

So when it comes to zero trust, it's not just about networks, it's about endpoints, it’s about cloud, it’s about application security,” says Ramanan.

He tells ITPro that the MoJ has also consolidated its SIEM solutions, meaning it now has a single pane of glass view of its security operations.

As a government department, the MoJ is under constant threat from cyber attacks, both from state-sponsored threat actors. But across its sprawling estate, it also faces a challenge that other government departments do not: concerted, internal threats from its prison population.

“We’re different, we have a target on our fronts as well because half of our users are prisoners with a lot of time and some of them are in prisoners for cyber crime, some of them are very advanced,” Churnside explains.

He adds that the stakes for successful breaches are high, as prisoners could be attempting to contact previous victims or obtain court information.

Ramanan adds there have been “a number of attempts” by prisoners to carry out cyber attacks in the past, underlining the need for the MoJ’s capable security operations center (SOC).

Ramanan says that in light of this, ensuring systems that are deployed into prisons must have complex layers of defense including WiFi controls and firewalls and that the MoJ’s readiness to respond to cyber incidents is high.

As part of its digital transformation, the MoJ also had to deploy new laptops for prisoners, on which specialized penetration testing has been carried out.

The MoJ’s SOC already processes 11 to 12 billion events per year, with lots of automation used for incident resolutions. It’s also preparing for greater internal generative AI uptake, using Palo Alto Networks’ AI Access Security to mitigate potential data threats associated with internal AI tool adoption.

“There are just so many events that the reality would be, if you didn't have an intelligent way of analyzing them all because now we have so much more visibility, you’d just be picking which ones to ignore – which is a position nobody wants to be in,” Churnside says.

For organizations looking to complete a similar journey, Ramanan stresses how important it is to get stakeholders involved and in the right mindset, as well as to plan user personas and requirements really well in advance.

“Keep things simple, keep it out of the box, do not customize it so you can’t upgrade,” he adds.

Banks are spending a staggering 70% of their budgets on maintaining outdated legacy systems, with many using an expensive 'patch and upgrade' approach.

According to research from RS2, this strategy is soaking up resources, placing significant strain on IT workers, and holding back digital transformation goals across the sector.

RS2 said the traditional strategy of patch and upgrade - simply adding new features and functions - is leaving banks with fragmented, siloed platforms that then lead to poor customer services.

The answer, RS2 said, is that rather than building, buying, or partnering for new technology, banks should instead adopt AI-powered orchestration layers to enhance their existing systems, without the cost and risk of a complete overhaul.

“The insights in our research make it clear: banks cannot afford to continue patching outdated systems while the financial landscape evolves around them," said RS2 CEO Radi El Haj.

"Instead of investing their IT budgets in maintenance and patching, banks must prioritize and allocate their investments in innovation and new products if they want to stay ahead."

By introducing an AI-enabled orchestration layer, banks create a central intelligence hub linking all their platforms, sharing data and giving access to a centralized set of metrics.

This, said the firm, can optimize banking operations by intelligently routing transactions, lowering processing fees, increasing authorization rates and reducing the number of failures.

Legacy tech woes just won't go away

The impact of legacy IT systems on the banking sector has been a long-running issue for IT leaders, with many institutions struggling to modernize IT infrastructure.

A report last year from 10x Banking found that 55% of banks view their core banking systems as the biggest obstacle to achieving their digital goals, and that 53% of those using legacy core systems are struggling to scale their operations due to data silos and production bottlenecks.

Emerging technology adoption is a contentious topic in the sector, however. Many IT leaders are wary of moving to new technologies, particularly generative AI. Around seven-in-ten cited security and compliance considerations as primary concerns.

Two percent of those surveyed said they had no plans to move away from their legacy systems, with 42% planning to replace elements of their outdated technology stack within the year.

However, fewer than a third have successfully integrated AI into their core systems, although 39% are planning to implement it within the next year and 27% in the next two to five years.

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The rise of artificial intelligence (AI) has impacted countless aspects of business and work, with the digital transformation landscape among those affected most, especially when you consider it through the prism of cloud computing. 

While digital transformation is undoubtedly essential to business growth, capitalizing on it means tapping into the latest technological trends — with the integration of AI into cloud transformation one of the biggest opportunities for the enterprise in the current landscape. That's why Forrester VP research director Paul McKay has urged businesses to either defend or increase cloud and AI spending in 2025. 

While investing in AI and cloud computing to further fuel digital transformation efforts is an enticing proposition, it's also wise to remember what digital transformation is and isn't. Only then can these investments begin to take shape and work effectively to reap rewards for your business as it vies to take advantage of this emerging technological dynamic.

The role of AI and cloud in true digital transformation

Digital transformation is – quite literally – transformational in that it is not simply an exercise in bolting on new technologies to day-to-day operations. Rather, digital transformation is a process in which teams integrate technology into all areas of the business, which fundamentally changes how they operate – and subsequently delivers value to customers.  

Digital transformation, the process by which organizations integrate digital technology into all areas of their business, fundamentally changes how they operate and deliver value to employees and customers. These efforts should be meticulously planned and tethered with key business goals – and not simply "moonshot" innovations that lack any relevant business driver, no matter how attractive any particular project seems in isolation. AI is, as you would imagine, notorious for encouraging this, with Deloitte research showing 70% of organizations moved 30% or fewer generative AI experiments during 2024 into production. 

"True digital businesses aren’t just adopting digital technologies; they are reengineering their entire way of operating," wrote director of solutions at Experis Europe, Rahul Kumar, in a blog post. 

"This means embedding a digital-first culture, developing data-driven strategies, and creating agile, adaptive organisations that respond rapidly to market shifts, customer needs, and technological advancements. This holistic approach is the only way to fully leverage digital tools for competitive advantage."

Leveraging AI in digital transformation

Increasingly, digital transformation has moved away from migrating processes or operations from the physical to the digital realm. In the new age of digital transformation, enterprises are leveraging AI and related technologies to increase productivity, collaboration, automation, and reduce points of friction in these new digital operations.

Gartner has highlighted the role of AI in business operations this year and beyond, with the notion of agentic AI – autonomous entities that can plan and take action to complete goals set by a user – among the key areas to look out for. The key business benefit is realizing a virtual workforce of agents that can assist employees in their day-to-day tasks, offloading much of the more manual or labor-intensive workload and augmenting how they work. 

This is something that Forrester analyst Jayesh Chaurasia and VP research director Sudha Maheshwari have also identified as a key trend. However, there are significant challenges that must first be overcome. 

"The next big piece of emerging tech in the world of AI is agentic AI, but enterprises with ambitions to build advanced agentic architectures themselves will meet significant hurdles. The challenge is that these architectures are convoluted, requiring diverse and multiple models, sophisticated retrieval-augmented generation stacks, advanced data architectures, and niche expertise," they said.

It is but one example of how AI-infused digital transformation can lead to business success. Others include how the further integration of technologies like machine learning, natural language processing (NLP), customer-facing chatbots and AI-powered data analytics can reap business benefits. That said, in all cases, businesses must consider how to ensure proper data governance and preserve human oversight in key decision-making. 

Tapping into the cloud continuum

The cloud has been a more stable proposition throughout the last decade, unlike AI which has been subject to a massive expansion in capabilities and potential. But as cloud computing improves incrementally – and businesses become more cloud-aligned – so too do the opportunities swell. Its flexibility and scalability are key in its value for digital transformation, particularly if organizations could well do with resources to harness and process the vast amounts of data they now collect.  

"Cloud transformation, the shift from traditional on-premises IT infrastructure to cloud-based services, has been a critical enabler of digital transformation. It allows businesses to scale resources according to demand, optimize costs, and improve accessibility and collaboration," according to a study by independent researcher Elizabeth Onabanjo A. "However, the complexity and volume of data involved in cloud operations require advanced solutions to manage and optimize these processes effectively."

That's where AI comes in. Experts agree that the two technologies can combine highly effectively and create significant value for organizations. Benefits include faster innovation, where AI may generate content and the cloud provides the infrastructure to deliver that content, or a much better customer experience, where the cloud-facing infrastructure can easily integrate AI solutions to analyze customer feedback and preferences. However, according to the director, head of cloud transformation and engineering (KSG India), Amit Rathore, in a blog post with KPMG, realizing the full potential of cloud computing and AI means adopting a strategic approach that addresses core business challenges and aligns with defined goals. 

"AI and cloud are powerful technologies that can transform businesses in various ways," he said. "However, organisations need to carefully consider their investments in AI and cloud to ensure that they get a positive return on investment. To do so, they need to implement key practices across data management, tracking results, and security, privacy, and ethics. By doing so, they can achieve a higher level of maturity and competitiveness in the digital economy."

In various sectors – from public utilities to education and finance as well as oil and gas and even in retail – organizations can utilize cloud computing and AI to achieve their digital transformation goals. 

For example, Unilever has integrated AI into customer supply chains with the creation of a new AI-driven customer connectivity model. Working in real-time, the model integrates forecasts and sales data between Unilever and customers, like Walmart, synchronizing the moment a consumer purchases a product to the source of the material. 

Public utilities, like energy and transport, also stand to gain from the new AI-cloud dynamic. South Africa's Prasa railway network is one example of an organization that has combined AI machine vision with vibration-sensing optical fiber to digitize operations and deter thieves – which have become a persistent threat. Finally, companies like Xcel Energy are using a combination of AI and cloud computing to accelerate the push to net zero.

Across various industries, enterprises that are seeking to integrate AI and cloud computing into their digital transformation efforts are reaping the benefits, unlocking this game-changing partnership to wield new tools and streamline processes to achieve core business goals.

In recent months, the retail landscape has witnessed a series of significant upheavals. For instance, Macy's announced the closure of 150 underperforming stores as part of its "Bold New Chapter" strategy to revitalize financial performance. 

Similarly, beloved local establishments like Dinghams Cookshop in Salisbury, Wiltshire, have shuttered after over 40 years, citing unsustainable rising costs and changing consumer habits. These developments underscore the pressing need for retailers to adapt to a rapidly evolving market.

The convergence of economic pressures, technological advancements, and shifting consumer expectations has created a complex environment for retailers. To navigate this successfully, leveraging data analytics, AI, and integrated digital platforms is essential.

This approach enhances operational efficiency, personalizes customer experiences, and maintains competitiveness in a digital world.

As Doug Stephens, a renowned retail futurist, aptly notes, "We are crossing over into a new era where competitive advantage for major retailers... will come, not through further extraction of value from society, but through contribution of value to society." This perspective emphasizes the necessity for retailers to transform their traditional models and embrace innovative technologies to meet evolving consumer demands.

The evolving challenges facing modern retailers

The retail industry is transforming significantly due to economic pressures, technological advancements, and changing consumer expectations. In 2024, the UK saw 13,479 store closures, with independent shops and major chains like Homebase and Shoe Zone facing significant challenges.

Economic uncertainties, including inflation and supply chain disruptions, have significantly impacted retailers' profitability. The rise of e-commerce has fundamentally altered consumer shopping habits, with many opting for the convenience of online platforms over traditional brick-and-mortar stores. This shift has been accelerated by the COVID-19 pandemic, which forced many consumers to embrace online shopping. Retailers that failed to adapt to this digital shift have struggled to remain relevant.

Consumer expectations have also evolved, with a growing demand for personalized, seamless, and omnichannel experiences. Shoppers now expect retailers to provide integrated online and offline experiences, allowing them to browse, purchase, and return products across multiple channels effortlessly. Retailers that fail to meet these expectations risk losing customers to more agile competitors.

Additionally, sustainability is a growing concern for consumers, who prioritize environmentally friendly and ethically sourced products. Retailers must adopt sustainable practices to avoid reputational damage and loss of customer loyalty.

In this changing landscape, retailers need to embrace technology, rethink business models, and focus on customer-centric strategies. Building an intelligent foundation is essential for success in this new era.

The intelligent foundation and what it means for retail

An intelligent foundation in retail refers to a robust technological and strategic framework that enables retailers to be agile, customer-centric, and resilient. This foundation is built upon several key components, including data-driven decision-making, artificial intelligence (AI) integration, cloud computing, Internet of Things (IoT) adoption, and robust cybersecurity measures.​

Data-driven decision-making involves harnessing the power of big data analytics to inform strategies, predict trends, and make informed decisions. By analyzing vast amounts of data, retailers can gain valuable insights into customer behaviour, preferences, and purchasing patterns, allowing them to tailor their offerings and marketing efforts effectively.

Integrating AI into retail operations can significantly enhance various aspects of the business, from demand forecasting and inventory management to personalized marketing. For example, AI-powered chatbots can provide customers with instant support and product recommendations, enhancing the overall shopping experience.

Cloud computing offers retailers scalability, flexibility, and real-time data access, facilitating better decision-making and operational efficiency. By migrating to cloud platforms, retailers can streamline their IT infrastructure, reduce costs, and improve collaboration across departments.

The adoption of IoT devices, such as smart shelves and sensors, enables real-time tracking of inventory, enhances in-store experiences, and provides valuable data on customer interactions. For instance, IoT-enabled devices can monitor product stock levels and automatically trigger replenishment orders, ensuring shelves are always stocked with popular items.

Robust cybersecurity is crucial for protecting customer data and maintaining trust. With frequent cyberattacks, retailers must implement strong security protocols to safeguard sensitive information and comply with data protection regulations.

Building this intelligent foundation allows retailers to respond swiftly to market changes, enhance operational efficiency, and deliver personalized customer experiences. By leveraging advanced technologies and data-driven strategies, retailers can position themselves for success in an increasingly competitive and digital marketplace.

From theory to reality: steps to building an intelligent retail foundation

Transitioning from traditional operations to an intelligent framework involves several strategic steps. Firstly, adopting a cloud-first infrastructure is crucial. Migrating to cloud platforms ensures scalability, reduces costs, and provides real-time data access, facilitating better decision-making. For instance, retailers can leverage cloud-based analytics to monitor sales performance and adjust strategies accordingly.​

Secondly, breaking down data silos is essential for creating a unified view of operations and customers. Integrating data across departments allows for cohesive strategies and personalized experiences. For example, combining online and in-store purchase data can help retailers understand customer preferences and tailor marketing efforts effectively.

Thirdly, deploying AI-powered personalization engines can significantly enhance customer engagement. Implementing AI tools to analyze customer behaviour and preferences allows for tailored recommendations and targeted marketing campaigns. For instance, AI algorithms can suggest products based on a customer's browsing history, increasing the likelihood of conversion.

Fourthly, integrating smart store technologies can improve operational efficiency and customer satisfaction. Utilizing IoT devices, such as smart shelves and sensors, enhances inventory management and offers interactive in-store experiences. For example, smart mirrors in fitting rooms can suggest complementary products, enhancing the shopping experience.

Lastly, embedding cyber resilience is crucial. Comprehensive cybersecurity strategies protect retailer and customer data. For example, multi-factor authentication and regular security audits help prevent breaches.

Real-world innovation with retailers leading the way

Several retailers have successfully embraced intelligent foundations, setting industry benchmarks. For instance, Decathlon has integrated RFID technology across its global operations. By January 2019, all its products had RFID tags, enabling real-time inventory tracking and improved supply chain transparency. This has enhanced inventory accuracy, reduced stockouts, and streamlined warehouse operations, boosting Decathlon's growth and efficiency.

Similarly, Sephora has transformed beauty retail through its omnichannel strategy. By integrating digital and physical environments, Sephora offers a unified shopping experience. Their mobile app provides access to products, tutorials, and personalized recommendations. In-store technologies, like smart mirrors and virtual try-on tools, enhance customer interactions, blending online and in-store benefits. This approach boosts customer engagement and brand loyalty.

Building an intelligent foundation is not just advantageous but essential for retailers aiming to thrive. By embracing advanced technologies, fostering innovation, and focusing on personalized customer experiences, retailers can navigate challenges effectively and secure sustained growth in the competitive retail landscape.

Public sector organizations are among some of the most strained businesses operating today, often working under a tough mandate to provide cheap or free public services while maintaining a financially viable operating model.

They are under immense pressure to perform without access to the infrastructure or budget enjoyed by the private sector. Staff often work longer hours while savings have to be made on digital services, creating outdated legacy tech stacks.

A report from Veracode found that the public sector had an 18% higher level of security debt than businesses in the private sector, while a report from the UK government found recently that public sector services are being severely hampered by “archaic” legacy tech. 

Few sectors are in quite so desperate need of digital transformation. Luckily, there are few technologies quite so ready to provide that transformation than AI, now increasingly utilized by public sector organizations as a method of improving productivity and ramping up efficiency.  

As it is doing with all manner of industries, AI in the public sector has the power to reduce the burden of certain tasks and speed up digital processes, thus lightening staff workloads and improving efficiency. 

How is AI being used in the UK public sector?

The UK government has been vocal about its desire to incorporate AI into the country’s public sector and bring the technology into public services to improve user and staff experiences.

One notable announcement came at the start of this year as Labour Prime Minister Keir Starmer unveiled the UK’s ‘AI Opportunity Action Plan,’ a project praised by the tech industry for its ambition. 

As well as increasing the level of jobs and investment in the UK, Starmer said the enhanced use of AI would also help transform public services. Chancellor Rachel Reeves echoed the sentiment, saying it would help make public services more efficient. 

More specifically, AI will be used to save staff time on administrative tasks, speed up planning consultations, and be applied to specific problems and use cases that need to be solved by the public sector.

For example, AI can analyze camera footage to identify and speed pothole repairs or provide support to healthcare professionals by performing medical diagnoses with increased speed and accuracy.

According to a prominent think tank in the UK, AI solutions could automate huge parts of the public sector workforce and reduce workforce time by 20%, though experts said that AI tools must be incorporated correctly.  

The think tank estimated that the implementation of AI tools could save up to £10 billion annually for the nation, and that total savings could total £34 billion a year by the end of the next parliament. 

How is AI being used in the US public sector?

Much like the UK, the US public sector is hampered by a lack of digitalization, weighed down by legacy tech. A report from the US Government Accountability Office (GAO) found that billions of dollars may be going to waste at the hands of dated technology in government. 

Little wonder, then, that the US public sector is looking to inject AI into its operations to overhaul efficiency and ramp up productivity. The Department of Homeland Security (DHS), for example, revealed its ‘AI Public Sector Playbook’ at the start of 2025.

The DHS claims to have launched various AI and machine learning (ML) initiatives to support capabilities in areas such as disaster response, cybersecurity, immigration services, and border security.

Some of the case studies published in the playbook include generative AI applications that improved investigation leads, assisted local governments with hazard mitigation, and developed training schemes for staff. 

The US Department of State (DOS) also reports positive AI use in its public sector operations, such as using AI tools to inform foreign policy decisions and increase overall operational efficiency. 

The DOS cited various needs for AI, including accessing and analyzing large amounts of text data from reporting in the department, assessing the impact of department outreach, and countering disinformation. 

How is AI being used in public sectors around the world? 

Elsewhere in the world, AI is also being rolled out in public sector services to create value. For example, Europe is championing many AI use cases in the public sector space.

According to the G7’s ‘Toolkit for AI in the public sector,’  AI has the power to overhaul efficiency in internal operations, improve the effectiveness of policymaking and responsiveness of public services, and bolster overall transparency and accountability.

A study from the European Union (EU) found that AI could have many positive results for citizen-government interactions, the improvement of analytics, and an uptick in efficiency in areas like healthcare, mobility, e-government projects, and education. 

“These sectors are identified as among the most ready for large-scale AI deployment, with applications ranging from autonomous vehicles and smart traffic systems to AI-driven healthcare solutions and education technologies,” the EU said.

Other countries such as Australia, India, Singapore, and South Korea, are noted by IDC as among some of the biggest public sector investors in AI and generative AI, with each country viewing the tech as a way of delivering on government objectives. 

This wealth of public sector AI use is just the beginning, with innovation through AI set to ramp up. This is particularly true given that many of the world's largest tech companies are creating solutions that specifically cater to public services and provide platforms for government organizations to lighten their workload.

The UK's manufacturing sector experienced a 0.4% decline in production output in November 2024, marking the third consecutive monthly decrease and reaching its lowest since May 2020. 

This downturn reflects broader challenges across Europe's industrial landscape, with the eurozone's industrial output shrinking by 0.7% in 2024, a significant downgrade from previous forecasts. Despite these setbacks, industry leaders remain cautiously optimistic. 

Clemens Fuest, president of the Ifo Institute, observed that the German economy is "increasingly falling into crisis," highlighting the urgency for strategic interventions to revitalize the sector. To navigate these turbulent times, manufacturers are increasingly turning to advanced technologies such as artificial intelligence (AI), automation, and the Internet of Things (IoT) to enhance operational efficiency and competitiveness.

Historical challenges in manufacturing

Over the past three decades, the manufacturing sector has encountered a series of challenges that have reshaped its landscape. A significant issue has been the offshoring of production to countries with lower labour costs, leading to domestic job losses and a decline in local manufacturing capabilities. This trend not only affected employment but also raised concerns about supply chain resilience and national security.​

Technological advancements have played a pivotal role in addressing these challenges. The rise of automation and robotics has enabled manufacturers to enhance productivity and maintain competitiveness. For instance, the integration of advanced industrial robots—capable of operating autonomously and collaborating with human workers—has streamlined assembly processes and improved precision. ​

Moreover, the adoption of digital prototyping has revolutionized product development. By creating virtual models, manufacturers can simulate and test products before physical production, reducing time-to-market and minimizing costs associated with physical prototypes. ​

The emergence of smart manufacturing, characterized by the integration of cyber-physical systems and the IoT, has further transformed the industry. These technologies facilitate real-time data exchange between machinery and systems, enabling predictive maintenance and reducing unplanned downtime. For example, sensors embedded in equipment can monitor performance and predict potential failures, allowing for timely interventions and continuous operation. ​

Current and emerging challenges

The manufacturing sector is currently navigating a complex landscape marked by significant challenges. Recent geopolitical tensions and changes in trade policies, such as the US imposition of tariffs on imports from key trading partners, have disrupted supply chains and increased production costs. Additionally, the sector faces labour shortages exacerbated by the retirement of experienced workers and a lack of interest among younger generations in manufacturing careers, which poses an obstacle to meeting production demands.

Technological advancements, including artificial intelligence (AI), automation, and the IoT, offer potential benefits for manufacturing, but integrating these technologies presents cybersecurity challenges. Increased connectivity elevates the risk of cyber threats, necessitating robust security measures to protect data and maintain operational integrity. 

Furthermore, manufacturers are under increased pressure to adopt sustainable practices due to environmental regulations and societal expectations, requiring investments and strategic adjustments to transition to renewable energy sources and reduce carbon emissions.

Global competition is also intensifying, with initiatives like China's "Made in China 2025" plan aiming to position China as a leader in high-tech industries. This strategy challenges manufacturers worldwide to innovate and enhance productivity to maintain their market positions. 

Addressing these challenges requires a comprehensive approach, including strategic policy interventions, investment in workforce development, robust cybersecurity measures, commitment to sustainable practices, and a focus on innovation to sustain competitiveness in the global market.

Leveraging technology for competitiveness

In the face of evolving challenges, the manufacturing sector is increasingly turning to advanced technologies to maintain and enhance competitiveness. AI has become a cornerstone in modern manufacturing, offering capabilities that extend beyond traditional automation. By analyzing vast amounts of data, AI systems can optimize production schedules, predict equipment failures, and improve quality control. For instance, companies like Standard Bots are developing AI-powered robots capable of learning tasks from humans and adapting to their environment, thereby enhancing operational efficiency.

The integration of robotics into manufacturing processes has significantly improved precision and productivity. Recent advancements have led to the development of humanoid robots designed to work alongside human workers. For example, BMW has collaborated with Figure Robotics to deploy a fleet of humanoid robots on their production lines, achieving a 400% increase in speed and the capability to perform 1,000 auto part placements per day with remarkable precision.

The IoT connects machinery, sensors, and systems, enabling real-time data exchange and monitoring across manufacturing operations. This connectivity facilitates predictive maintenance, reduces downtime, and enhances supply chain visibility. 

Platforms like Siemens' Insights Hub, an industrial IoT-as-a-service solution, allow manufacturers to collect and analyze operational data, leading to informed decision-making and process optimization.

Digital twin technology creates virtual replicas of physical assets to optimize performance through simulation. Additive manufacturing, or 3D printing, enhances prototyping and production by rapidly creating complex components with minimal waste. Cloud computing offers scalable resources, enabling efficient data management and global collaboration, improving cybersecurity, and promoting agility and cost reduction.

Establishing an intelligent foundation in manufacturing

Establishing an intelligent foundation in manufacturing needs a multifaceted approach that integrates advanced technologies, fosters data-driven decision-making, and emphasizes continuous workforce development. By collecting and analyzing real-time data, manufacturers can optimize operations and inform strategic decisions, leading to enhanced efficiency and responsiveness. 

The adoption of technologies such as AI, machine learning, and the IoT facilitates the creation of interconnected systems that boost productivity and adaptability. For instance, AI-powered assistants are now being deployed on factory floors to diagnose issues by analyzing vast amounts of data, streamlining operations and reducing human error. Concurrently, continuous training programs are essential to equip employees with the skills necessary to operate and maintain these advanced manufacturing technologies.

In China, companies like Tusk Robots and ABB Robotics China are actively training workers to operate new machinery, ensuring that the workforce can adapt to the changing technological landscape. Implementing small-scale pilot projects allows manufacturers to test and refine intelligent solutions before full-scale deployment, mitigating risks and facilitating smoother transitions. 

Collaborative ecosystems, formed through partnerships with technology providers, research institutions, and other manufacturers, enable the sharing of knowledge and resources, accelerating innovation and effective implementation of intelligent manufacturing solutions. 

Embracing an iterative approach of continuous improvement ensures that systems are regularly assessed and enhanced, allowing manufacturers to adapt to evolving challenges and opportunities in a dynamic market environment.

To weather the storm of surging technological innovation, impulsive decision-making without any clear direction has led to mounting rates of technical debt and failed digital transformation projects.

According to McKinsey & Co, 70% of digital transformation efforts fall short of their desired targets, demonstrating a widespread inability among organizations to keep up with their own overambition when turning to the ‘latest and greatest’ tech solutions at breakneck speed. Having overindulged, moving too fast for too long, organizations are feeling the pinch of a subsequent digital hangover and are in dire need of digital detox to restore their foothold on their digital transformation journey.

So how did we get here? The proliferation of AI and hybrid cloud environments to bolster efficiency and streamline workflows across departments has set the standard for digital transformation. In line with this trend, an awareness of increasingly sophisticated cyber threats prompts fear within organizations and leaves them with a prevailing sense of vulnerability. In a rush to deploy the latest technologies, organizations tend to overcompensate and overspend – a problem made worse by the seemingly exponential rise of high-profile breaches reported in the media.

Navigating the digital hangover

Similarly, to be seen as taking a proactive approach to threat mitigation and to keep up with competitors, organizations are failing to establish a clear understanding of how certain solutions will actually protect their specific environment. By neglecting their unique risk profile and making impulsive decisions as to where investments are made, IT professionals are tasked with managing technologies and lacking an overarching strategy for effective deployment and favourable ROI. Only by establishing what improvements are needed, where they can be implemented and how success can be measured over time will an organization be able to navigate today’s digital landscape successfully.

Incremental improvements that contribute to a scalable growth model will ensure IT professionals don’t bite off more than they can chew and allow teams to adopt new technologies without becoming overwhelmed. When digital transformation projects align with business goals and take stock of where existing infrastructure can be utilised more effectively, businesses can cut out redundancies and ensure their investments deliver real value. Sometimes, less is more.

As well as soaring rates of innovation, adoption of digital technologies to meet ever-changing internal and external demands has accelerated alongside the unprecedented socio-economic implications of COVID-19. In doing this, however, organizations’ tool stacks have become bloated over time, causing wastage across the board while inadvertently endangering data security. When implementing these new technologies, organizations have long since been drinking from the bottle; now it’s time for IT professionals to stamp out bad habits and develop a clear vision and roadmap for their digital transformation.

A path to recovery

Businesses should first prioritize use cases, investing only in solutions that address a specific need, such as improving user experience or boosting efficiency, to ensure their efforts are focused and intentional. The next step is to consider the vital aspect of human intervention that is so essential to the deployment of any new tech-based solution within an organization.

With technologies like AI frequently automating data-intensive and time-consuming tasks, leaders must remember that these innovations are not comprehensive solutions but tools to assist their human enablers.With this in mind, organizations must prepare their people for digital transformation initiatives by conducting a thorough skills gap analysis to establish areas in which a workforce is lacking necessary expertise and where they might benefit from upskilling through continuous training.

A cultural shift may also be needed across departments to leverage the right solutions in the right way. By fostering a collaborative and willing culture that understands why, where and how tools are contributing to business goals, organizations are more likely to find success with a pragmatic and staggered approach to digital transformation.

With worldwide spending on digital transformations set to reach $4 trillion by 2027 according to IDC, businesses will need to avoid the increasingly routine issue of projects failing before they have even begun. It is of course true that without the necessary infrastructure in place to support the proposed transformation, positive ROI will remain a distant possibility, but organizations should first establish KPIs to measure the ROI of planned digital transformation efforts.

A recent study suggests that $2.3 trillion is wasted globally on failed digital transformation programs, and with global spend in this area increasing year on year, this figure is likely to increase and enhance scrutiny surrounding how a business can measure its ROI. It is important to note that metrics used to measure ROI will vary depending on the size and nature of the business, as well as the scope of the transformation project itself, but organizations should not consider financial performance as a sole indicator of ROI.

Avoiding future failures

Looking at operational efficiency, employee engagement and customer experience metrics are key examples of where ROI might be determined. A clear picture of how much value is being gained relative to what was spent is an invaluable asset to any IT professional looking to scale their digital transformation project as without this, those elsewhere in the organization are less likely to sign off on future investments.

The exploding rates of technical innovation in recent years have prompted the need for a digital detox as many businesses have seen digital transformation efforts barrel out of control over time due to impulsive decision making. Moving at breakneck speed without any clear direction, technology organizations, as well as crucial providers and vendors, have no choice but to address this unsustainable growth model. With such rapid rates of innovation, digital solutions become obsolete before they are even put to production, forging a double-edged sword that prevents use of the latest and greatest tech and makes it more difficult for companies to gauge ROI.

Having moved too fast for too long, the industry doesn’t appear to be applying the breaks anytime soon. Only when innovation reaches a plateau will leaders be able to focus their efforts on stabilising their IT infrastructure, addressing emerging issues surrounding safety, security, and ethical usage.

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Consumers are placing increased pressure on enterprises to improve user experiences and update clunky legacy technology, according to new research from Pegasystems and YouGov.

More than three-quarters (77%) of surveyed consumers said organizations should invest in improved interactions with customers, while over two-thirds (69%) feel companies are more interested in driving profits with tech investments than improving customer experience.

Many consumers feel this is a problem that has deteriorated in recent years, with 56% describing the difficulties of interacting with businesses as worse now than they were a decade ago. Over a quarter (26%) strongly agreed this was the case.

Consumers complained of several issues, including slow, siloed customer service operations. Nearly two-thirds (63%) said customer service wait times were their top pain point, while 40% said customer service agents lacked the information needed to provide good service.

Website and app disruption is also a leading problem, with just under a third (29%) saying they are frequently told by customer service agents that systems are down or not working correctly.

28% say that websites and apps they use to interact with businesses are slow or have crashed.

All this affects bottom lines for enterprises, Pegasystems warned, as unhappy customers are likely to switch providers and complain. More than a third (37%) of consumers revealed they’ve taken their business elsewhere as a result of frustrating online services.

"In an age where customers are more demanding than ever, many of their needs are not being met as a direct result of organizations carrying technical debt,” said Don Schuerman, CTO at Pegasystems.

“Businesses have to start taking the amount of technical debt they are managing seriously and examine ways they can use new innovations such as generative AI to make the existing systems they have in place work better for everyone,” he added.

Legacy tech causes problems internally, too

It’s not just consumers that are being affected by technical debt. Staff are facing challenges with regard to productivity and work rate when dealing with legacy tech internally.

A recent survey of c-suite leaders by Protiviti found nearly 70% of respondents highlighted technical debt and legacy tech as key barriers to innovation, for example.

The survey found the cost of managing and maintaining outdated technology significantly hampered their ability to modernize and engage with customers.

The cost of managing legacy tech is estimated to total $2.41 trillion a year in the US alone, Pegasystems noted.

Across the Atlantic, the situation is the same. In the UK public sector, legacy tech issues have hampered the productivity of civil servants through reliance on paper-based systems and dated digital systems that wrack up huge maintenance costs.

It’s also draining budgets for enterprises, with research from early last year finding that legacy tech accounts for over a third (37%) of overall power consumption.

A report from the US Government Accountability Office (GAO) found that federal services in the US could be wasting investments of over $100 billion in maintaining IT systems and developing new ones that often fail.

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A lack of digital maturity is holding UK businesses back, hampering growth, and slowing down AI adoption, according to a report from SAP.

Businesses face a range of issues when it comes to the maturity of their tech portfolios, with 27% of surveyed firms citing the burden of legacy technology as a key barrier to scale.

This highlights the difficulty of integrating advanced technologies into dated systems, SAP said.

Data and management infrastructure are also an issue, with over a third (34%) of organizations stating that either a lack of quality data or a lack of quality tools for planning are among the top three challenges affecting business growth.

As many as a third of firms indicated that insufficient datasets are hindering AI model training and affecting accuracy, while 32% are struggling with inaccuracies generated by AI systems.

“Addressing barriers to growth, like digital immaturity, must be a priority for the UK’s high-growth organizations if they wish to reach their potential,” Wesley Doyle, Head of new business at SAP UKI, said.

Similarly, businesses are contending with a significant shortage of skilled talent in the technology sector.

More than a third (34%) face difficulties in attracting and retaining employees with the necessary expertise to properly adopt AI. Little wonder, then, that 40% of firms are prioritizing skills development in their growth strategies.

Businesses struggle with AI adoption

Despite feverish enthusiasm for AI, businesses have been contending with many of the problems highlighted here for a while as adoption projects ramp up in size and volume.

Data, for example, has been a continuous thorn in the side of many firms, with a recent report finding that 26% lack a formal data strategy and 39% report little to no data governance despite a keen focus on AI use.

An earlier study from Red Hat found similar concerns around skills and training, with 80% of IT managers pointing to an urgent skills gap and 40% suggesting their own firms lack the necessary skills to fully harness AI.

Other concerns include the quality of the technology itself. A KPMG report from last summer found that 60% of tech leaders consider result accuracy and the potential for hallucination as their biggest concern.

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US government IT operations may be wasteful and dated, according to a report from the US Government Accountability Office (GAO).

Government IT acquisitions face major challenges and critical action is needed to implement more effective, cost-efficient solutions, the report said. The GAO offered nine actions that must be taken to make these changes.

A strengthening of oversight and management is needed, the report detailed, including improved effectiveness of those in IT leadership positions such as CIOs and chief artificial intelligence officers (CAIOs).

There needs to be a more detailed strategy for the management of IT systems and applications, and improved levels of monitoring of the performance of IT investments.

Government departments must improve IT acquisition and development practices and strengthen the management of cloud services, supply chains, and telecommunications services.

Similarly, the review called for expanded federal IT capacity and capability through workforce management, technology management, and improved digital services for federal customers.

The federal government invests over $100 billion in maintaining existing IT systems and developing new ones but, according to the GAO, these investments frequently fail, exceed budget, or go over schedule.

“The federal government is not fully reaping the benefits of modern technology to reduce costs and better serve the American people,” Gene L. Dodaro, U.S. Comptroller General and head of the GAO, said.

“As federal IT needs intensify and technologies evolve and become more complex, federal agencies must address the longstanding IT acquisition and management challenges GAO has identified since this area was designated high risk in 2015,” Dodaro added.

Legacy tech woes span both sides of the Atlantic

The US government is not alone in these issues. In the UK, one report found that legacy had been holding back public sector efficiency to the tune of £45 billion in wasted taxpayer money.

"Technology that sits at the foundation of our country has been left to wither and decay under the hands of the previous government, too often grinding to a halt and stalling essential public services – racking up a huge bill for the taxpayer," technology secretary Peter Kyle said at the time.

The report found that over 25% of digital services in UK government departments were outdated, racking up maintenance costs over three to four times higher than if systems were kept up to date.

The UK's National Audit Office (NAO) has released a critical report into the way the government has worked with technology suppliers, saying it has wasted taxpayers’ money and missed opportunities to modernize government.

Government departments have treated tech suppliers in the same way as any other, according to the NAO, with procurement guidance failing to address all the complexities of digital commercial issues.

It must learn from its past procurement approaches to large-scale digital transformation projects, which have experienced decades of poor progress and billions of pounds in cost increases.

The government’s central digital function, which leads on digital and data policy, isn't formally responsible for - and lacks the resources for - more extensive engagement in digital procurement.

Meanwhile, the report warned there aren't enough people with digital commercial skills in government - and departments aren't making full use of the digital expertise they do have when procuring for technology-enabled business change.

Similarly, commercial teams often fail to engage their internal digital experts at the right time.

Digital contracts are awarded without enough preparation, with teams often rushing to award contracts because of pressure to deliver, without always fully understanding what is actually needed from a contract.

Notably, approaches to contract design can have a negative impact on successful digital delivery, with the government sometimes opting for mechanisms which limit the flexibility for suppliers to use their expertise to help the government deliver the desired outcomes.

"A lack of digital and procurement capability within government has led to wasted expenditure and lack of progress on major digital transformation programmes," said Gareth Davies, head of the NAO.

"Government needs to rethink how it procures digitally, including how to deal with 'big tech' and global cloud providers that are bigger than governments themselves. The creation of the new digital centre of government provides an opportunity to make the systemic changes that are needed."

The NAO said that it's the central government that should decide who takes ownership for addressing the problems it's identified, producing a sourcing strategy to include improvements in how it deals with ‘big tech’ and strategic suppliers.

It should also create a digital skills plan to plug recruitment shortfalls and to improve the way decision makers responsible for digital commercial activities and ensure teams are equipped and trained.

For individual departments, the NAO wants to see them strengthening their ‘intelligent client function’. They need to identify and develop key requirements before tenders and bid processes commence, and improve how policymakers and technical specialists work together with procurement specialists.

They should also improve their capability to collect and use data to inform a pipeline of supply and demand, which would help the center of government build a more strategic approach to suppliers.

The National Trust is Europe’s biggest conservation charity, boasting around six million members and serving customers at hundreds of sites littered across the UK.

Founded in 1895, the Trust has dedicated itself to preserving nature, biodiversity, and historic sites the length and breadth of Britain. But while it may have been launched in the twilight years of the 19th century, it’s by no means a relic of a time gone by.

In recent years, the Trust has undergone a rapid period of digital transformation, overhauling legacy IT infrastructure and systems to help the organization maximize the use of data and cultivate closer relationships with customers in a digital age.

Jon Townsend, chief information officer (CIO) at the Nationa Trust, sits down with ITPro to explain how the organization focused heavily on overhauling its network infrastructure, which had fallen short of modern standards.

Ageing IT infrastructure also placed a major strain on the organization while clunky applications severely hampered workforce productivity. All told, this was a three-pronged approach for the National Trust, focusing on networking upgrades, cloud migration, and transforming it into a data-driven organization.

“When I started looking at how the National Trust was set up from a technology perspective, I mentioned that we have 500 major sites, but at the time we didn't really have a network that joined everything together,” he says.

“We had challenges around using old legacy equipment in physical data centers and end-user services that weren't really fit for purpose. So what I set about doing was thinking ‘How do we rebuild this and redesign it from the ground up?’

“And quite literally from the ground up, we had to start digging fiber optic cables in a lot of our places because it just didn't exist. A lot of our places are in very remote locations.”

In some instances, Townsend says staff at sites were trying to operate on broadband ADSL links capable of a meager half megabit. Given some of these locations saw up to 400,000 visitors a year, the impact on workforce efficiency was significant.

No simple lift and shift for the National Trust

Years of iterative expansions to data center capacity meant the National Trust’s systems had become cumbersome and lacked the power efficiency required for modern operations.

“We had about 1,000 hosts in two data centers, all built on infrastructure we owned,” he explains. “Some of it was virtualized, some of it was physical hosts, some of it was a bit of both.

“What had happened over the years is things had become a spaghetti-type architecture,” Townsend adds. “I think that’s quite common, we’d had that data center in place for well over a decade, and it had become a bit of an entangled mess to be honest.”

The National Trust was faced with two choices: begin modernizing its in-house infrastructure, or embark on a cloud journey. Reflecting on this period, Townsend notes that cloud was “still quite a new thing” for a lot of organizations, especially in the non-profit space which has traditionally lacked the financial resources to embark on widespread migration projects.

Townsend explains that the National Trust worked with both Microsoft Azure and Amazon Web Services (AWS) to migrate its existing infrastructure, as his team was keen to adapt workloads for the cloud rather than simply lift and shift.

“So we redesigned the architecture underneath it to make it cloud-fit, if you like, and it really allowed us to fast forward into the future and made our infrastructure ready and fit for purpose.”

Part of this cloud journey included the adoption of software as a service (SaaS) tools, and the organization selected Microsoft 365 as its go-to suite of solutions. This allowed the National Trust to adopt a remote work model in 2020 when the pandemic hit, a feat Townsend said would otherwise have been a monumental challenge.

Maximizing the use of customer data

With its digital foundations laid, the National Trust looked to capitalize on its transformation by ramping up its customer engagement capabilities. It’s here that the organization began its now close relationship with Salesforce, Townsend explains.

Initially, the Trust implemented Salesforce’s Nonprofit Success Pack in a bid to streamline the processing of its memberships. This saw the tech team migrate from an “outdated Oracle eBiz system” that Townsend says was “no longer fit for purpose and was holding us back as an organization".

The benefits became clear very early on, according to Townsend, and prompted the organization to ramp up its adoption of Salesforce services. This included looking at overhauling how National Trust members could purchase or renew memberships via Salesforce, as well as embracing Experience Cloud to improve supporter engagement.

The organization also worked with independent software vendors within Salesforce’s ecosystem including FinDock, a native Salesforce payments app that the National Trust uses to process donations payments. At this time, the UK was emerging from repeated lockdowns and the National Trust was keen to tap into the trend of Brits looking to get back out and embrace nature.

“There was a real appetite for that, especially coming out of the pandemic,” he says. “We found that people wanted to reengage with nature because for the first time, they weren’t allowed to. That fear of separation was really painful for a lot of people.”

A National Trust campaign that saw it give free passes to sites across the country proved a roaring success, Townsend says, and Salesforce’s Marketing Cloud Platform helped the organization raise valuable insights into the raw appetite among Brits hoping to get back into the countryside and to historic sites.

Prior to adoption, these granular insights would not have been possible, and the Trust may have missed out on a sizable pool of potential customers.

“But of those, we found that 41% of them actually signed up to hear more from us, to get that marketing. So that meant 450,000 people that had never really engaged with us before, but now we were able to bring in as prospects to actually hear more.”

A more personal customer experience

Establishing a clear, overarching view of a customer, their appetites, and preferences was the ultimate goal here – Townsend notes that customers can easily be turned off a business they’ve subscribed to if they feel it is too impersonal.

Townsend says that through Data Cloud, staff at the Trust now have a clear view and understanding of a customer’s preferences.

“Our members, they're the lifeblood of our organization,” he tells ITPro. "We have almost six million of them, but many of them are also the people who buy things from our shops, they buy food at our food and beverage outlets, they go on holiday with us, they may donate to us.

“They might actually be volunteers or members of staff. And so really understanding all of those different relationships for the first time, we can really build upon that.”

Achieving this “single view” of the customer wasn’t a cut-and-dry process, Townsend notes. This was a huge undertaking given the sheer scale of data at the Trust’s disposal.

The National Trust boasts a staggering 100 million records, each of which paints a picture of a customer and their relationship with the organization. Shifting this from one environment to another was a huge task for the small yet capable data team.

“When we were doing the digital transformation, we had to pause, for example, direct marketing, because we were shifting from one platform to another and we were moving all of our data sources,” Townsend explains.

“When we were doing the digital transformation, we had to pause, for example, direct marketing, because we were shifting from one platform to another and we were moving all of our data sources,” Townsend explains.

He tells ITPro that the stakes were high during this process, as the organization had to ensure its member direct debits weren’t affected by the move. From a legal, financial, and customer experience, the timely and accurate handling of payments had to move forward like clockwork.

“It’s almost like moving from one aircraft carrier to another one. We had to take off with those direct debits in flight for six million folks, and then land it perfectly in the space of one month.”

Worker benefits and the future of the National Trust

The primary focus of this long-running series of projects was to improve customer experience. But Townsend adds that as with any digital transformation project, an equally important goal was to streamline daily workflows for staff.

Measuring success here, Townsend says the response has been “overwhelmingly positive”, as in-house teams and the partner organization that handles supporter services no longer have to juggle multiple systems.

“They were having to take supporters through journeys that would require them to hit 20-odd different screens as they were going through that. To have all that on a single interface was transformational for them, as all of a sudden they were able to rapidly respond to customer needs.”

Looking ahead, Townsend tells ITPro there’s much more on the horizon for the National Trust, especially in the age of AI. Having laid the foundations to become a digitally literate organization, further enhancing staff capabilities and improving customer service is a tantalizing prospect.

There will be challenges here, not least in ensuring safe and responsible AI use and ultimately ensuring that the data used in any project is clean. It’s here that Townsend sees the real value of Data Cloud.

“The key thing with any implementation of AI is getting your data sorted out, and that was the fundamental building block,” he says. “And one of the reasons why we selected to go with Data Cloud.”

“For the first time, we’ve got all of our support data into one place and will provide us the platform to then place AI on top of it.”

Salesforce unveiled its Agentforce service at Dreamforce 2024, which allows users to create autonomous AI ‘agents’ capable of carrying out tasks on behalf of human workers. Regarding this specific service, Townsend says he’s “super excited” about the prospect of AI agents working alongside human workers in the future.

Sharp Europe has announced plans to acquire Apsia, a French company specializing in digital transformation and cloud integration.

The deal, which marks the latest in a series of acquisitions, is aimed at boosting Sharp's IT services business across the region.

"This acquisition is a key strategic step for Sharp Europe as we continue to extend and expand our IT services footprint and offering in the region," said Yoichi Tomota, president of Sharp Electronics Europe.

"Like Sharp, Apsia puts the customer at the heart of its priorities which aligns with our plans to consistently meet the changing needs of our customers and future customers across Europe."

Apsia generated over €22.5 million in revenue in 2022 and has more than 150 employees. The company offers a broad range of services across cloud ERP, cloud CRM, cybersecurity, data/IA, and cloud analytics.

Sharp said the acquisition will expand its technical expertise and help it offer services for businesses of all sizes. Apsia will continue to operate under its own brand in the French market.

"We are very excited to join a pioneer of innovation such as Sharp. Joining Sharp will enhance our offering to meet the evolving needs of our customers and cloud transformation," said Olivier Massonnat, CEO of Apsia.

"We are looking forward to supporting an even wider range of customers with new challenges, such as preparing for the arrival of AI in management applications."

Sharp expansion continues

In 2019, Sharp took over UK-based support services firm Complete IT, aiming to boost its digital transformation credentials with a more sophisticated suite of integrated solutions.

In 2021, it acquired Swiss IT services company ITpoint Systems, saying the deal would help the company expand its range of services across Switzerland, with ITpoint Systems services being gradually developed into a new strategic business area.

Soon after, the company opened a dedicated European IT Services division, headed by Complete IT founder Colin Blumenthal.

This included a new European Technology Support Centre (ETSC) and a pan-European IT service helpdesk offering services from cybersecurity to active system monitoring.

Sharp appointed Roland Singer, the former head of ITPoint Systems as its new vice president of IT services earlier this year.

At the time, the company said Singer’s primary objective was to expand its IT services division across Europe and establish itself as a leading provider.

"With the team’s expertise and leadership, I am confident we will become a trusted IT services advisor and partner for our clients, helping them navigate the complexities of the IT landscape and make the right choices for their future," said Singer.

As firms across the world aim to meet net zero targets, it’s become increasingly clear that leaders need a better understanding of the carbon footprint of their entire supply chain rather than just their immediate emissions.

Scope 3 emissions, which are currently optional to report, refer to those produced by all the entities in an organization’s supply chain. While tracking these emissions is an essential part of the private sector embracing sustainability and clamping down on carbon emissions, this is a challenge as by definition they originate from sources outside an organization’s direct control.

Mondra is an environmental product footprinting platform, which works to help food companies identify the emissions in their supply chain.

Leaning on the Microsoft Azure cloud computing platform, Mondra provides AI predictions for where emissions might be in a customer’s supply chain. In practice, this means combining AI and digital twins to make a copy of existing data from which emissions numbers can be extrapolated, using Azure Databricks.

“We set out on a thesis to prove that if you could do LCA at speed, at scale for 30,000 products – that's what you're talking about with a retailer – then you end up with a really high resolution map of how your scope 3 is made up,” says Jason Barrett, CEO at Mondra, in conversation with ITPro.

“You can target investment, you can collaborate with suppliers.”

Marco De Sanctis, CTO at Mondra, tells ITPro that identifying where in your supply chain emissions originate is one of the most important steps to reducing your company’s carbon footprint.

“This is technically an incredibly challenging exercise, because the data is often incomplete and sometimes even wrong,” de Sanctis says.

These results are scored according to their estimated accuracy, so that leaders can check how Mondra’s inference approach produced the results. They can then take this data to their suppliers, to double check the accuracy and find out where emissions can actually be reduced.

To highlight the complexity of the task, Barrett tells ITPro that Mondra has paired with a leading UK retailer that had previously attempted to track its food-linked emissions internally. The retailer had been forced to stop after realizing that the task would take a century – a time that Mondra has now shortened down to just four hours.

Mondra is now working with 85% of UK retailers, representing 20% of the total footprint of the UK, but aims to go further and offer retailers more granular emissions insights.

To achieve this it’s developed a new chatbot offering called Sherpa, a natural language layer for interfacing with Mondra data powered by OpenAI’s large language model (LLM) GPT-4o.

This is rooted in Microsoft Azure OpenAI’s servers, and individually grounded in the dataset for each customer. The cloud architecture, which provides Microsoft customers with a range of generative AI models for differing use cases, has also allowed Mondra to offer Sherpa as a multi-agent offering meaning it uses other AI models in tandem with GPT-4o.

De Sanctis tells ITPro that Mondra is in the process of integrating OpenAI’s o1 model to assist customers with ‘what if’ questions about their supply chain emissions.

Through Microsoft Azure, Mondra’s customers can also check the carbon emissions of their AI model use, which can apply to Sherpa as well as any other AI models on which they rely.

Barrett says that although Mondra only measures scope 3 in the food and beverage industry, it’s aware of the need for responsible AI use and will work to ensure its AI use doesn’t undo its environmental benefits. De Sanctis adds that this is a prime benefit of its partnership with Microsoft:

“Microsoft Azure, as a cloud platform, allows you to do this very measurement quite precisely, projected over your usage of the platform itself.

“So you can literally see reports where your carbon footprint, for the services that you're using, is presented and justified much like we do for food. And it’s amazing because it allows you to see, for example, when we optimize our code, when we improve the efficiency of our code, the benefits this is generating in terms of less CO2 being released into the environment.

“Or even being able to choose the data centers in regions which could be more carbon efficient, depending on the power sources in the given country where your services are deployed.”

The financial services industry is undergoing a profound transformation, driven by the rapid integration of artificial intelligence (AI) and comprehensive digital transformation initiatives. This evolution is reshaping how financial institutions operate, compete, and serve their customers.

Recent data underscores the scale and impact of these changes. A joint survey by the Bank of England (BoE) and the Financial Conduct Authority (FCA) revealed that approximately 75% of financial companies are now utilising AI, a significant increase from 58% two years prior. This surge in AI adoption is enhancing various facets of the sector, from customer service to risk management.

In tandem with AI adoption, digital transformation efforts have intensified across the industry. According to Deloitte's recent analysis, organisations are allocating, on average, 7.5% of their revenue to digital transformation initiatives, with the financial services sector leading this trend. 

This substantial investment reflects a commitment to modernizing operations, improving customer experiences, and maintaining competitiveness in a rapidly evolving market. 

The impact of these investments is evident. A survey by Bain & Company found that financial services firms have experienced an average productivity improvement of 20% across functions such as software development and customer service due to AI implementation. These enhancements not only streamline operations but also contribute to improved customer satisfaction and competitive advantage. 

However, the integration of AI and digital technologies presents challenges. Deloitte's Q4 2024 report, "Now decides next: Generating a new future", highlighted that while Generative AI (GenAI) technology advances swiftly, organizational change occurs at a more measured pace, underscoring the difficulties in scaling and integrating these innovations.

Moreover, the Financial Stability Board warns that AI could amplify certain financial sector vulnerabilities, including third-party dependencies, market correlations, cyber risks, and challenges related to model risk, data quality, and governance. 

"GenAI could increase financial fraud and disinformation in financial markets. Misaligned AI systems that are not calibrated to operate within legal, regulatory, and ethical boundaries can also engage in behaviour that harms financial stability," the report said.

These potential risks necessitate robust regulatory frameworks and vigilant oversight to ensure that the integration of AI into financial services does not compromise financial stability.

Many benefits on the horizon

Despite this, IT leaders in the financial services sector remain upbeat about their digital transformation prospects in the years to come - and a key factor here is the emergence of generative AI. 

With the advent of generative AI, organizations across a slew of industries globally have begun ramping up adoption to unlock operational efficiencies. The technology is used across a wide variety of business functions - from software development and cybersecurity, to HR and compliance. 

Generative AI has evolved rapidly, enabling financial institutions to automate complex processes, enhance decision-making, and offer personalized services. For instance, Commonwealth Bank (CBA) has integrated AI to analyze over 20 million payments daily, flagging suspicious transactions and issuing proactive warnings to customers. This initiative has led to a 50% reduction in scam losses and a 30% decrease in customer-reported frauds. Additionally, CBA's AI-powered messaging services have reduced call center wait times by 40% over the last financial year, significantly improving operational efficiency and customer satisfaction.

Similarly, JPMorgan Chase has introduced an internal AI assistant dubbed LLM Suite, designed to enhance employee productivity. This generative AI tool assists in tasks such as preparing briefing materials and processing legal documents, enabling staff to manage and utilize information more efficiently. The bank expects this AI integration to drive operational efficiencies over the next three to five years, potentially delivering up to $2 billion in value. 

These advancements illustrate the financial sector's commitment to leveraging generative AI to drive efficiency and innovation. As this technology continues to mature, its integration into financial services is expected to deepen, offering enhanced services and achieving greater operational excellence. Financial institutions that strategically adopt and implement these technologies are likely to gain a competitive advantage in an increasingly digital world.

The use of AI can also help unlock basic process efficiency gains, according to research from analyst firm Gartner. In a study published in June 2024, the consultancy identified the key areas that financial leaders anticipate AI having a profound impact. 

The use of AI to improve budget forecasting was the most commonly-cited area in which leaders were excited about the technology, with more than a quarter (26%) identifying this as the most impactful use case. 

Other areas of anticipated impact included coding assistance, cited by 11% of respondents; contract and document reviews (13%); financial/regulatory reporting draft creation (7%); and market/competitor research analysis (9%).

Challenges may still lie ahead

While finance sector leaders acknowledge the benefits of AI implementation, they still remain wary of key considerations - especially with regard to regulatory compliance and risk. 

Respondents told Gartner that issues around talent, governance, data accuracy, and technical compatibility were all key concerns and had been identified as potential barriers to success. 

Concerns over data accuracy in particular have slowed down deployment rates in other industries, such as manufacturing, research shows. 

Analysis from Lucidworks in July 2024 showed manufacturers had actively slowed generative AI initiatives due to accuracy-related issues, with 44% of leaders voicing concerns. 

Given the critical nature of the financial services industry, organizations and IT leaders must adopt a prudent approach to integrating generative AI. Gartner highlights the importance of aligning AI initiatives with key performance indicators (KPIs) to ensure that projects enhance operational efficiency or generate new revenue streams. They recommend that finance leaders connect "use cases to KPIs to ensure that any project either improves operational efficiency or creates net new revenue or better experiences."

Additionally, Gartner advises maintaining human oversight in AI-driven processes to ensure transparency and effectiveness. It suggests that finance functions should design AI-driven processes so that automated steps and decisions are observable and people can interrupt an automated process and supplement actions with human judgment.

Emerging trends in AI and digital transformation in financial services 

It's clear then that the financial services industry is undergoing significant transformation, driven by advancements in AI and other, emerging digital technologies.

As mentioned earlier, generative AI is automating routine tasks and enhancing customer experiences. According to Accenture, by 2030, generative AI is expected to be fully integrated into every aspect of banking, automating routine tasks and fostering seamless collaboration between AI and human employees.

Another emerging trend is the rise of digital-only and neo-banks. These institutions operate without physical branches, offering cost-effective and flexible services that appeal to tech-savvy customers. The global neo-bank market is expected to grow significantly, indicating a shift towards fully digital banking experiences.

Financial institutions are also exploring the integration of quantum computing with AI to enhance complex financial analyses, risk management, and trading strategies. This combination has the potential to revolutionize financial services by processing vast amounts of data at unprecedented speeds.

Lastly, the adoption of finance automation is accelerating, with technologies like robotic process automation (RPA) streamlining tasks such as accounting and financial reporting. This shift not only enhances efficiency but also reduces errors and operational costs.

These trends underscore a period of rapid innovation in financial services, as institutions leverage AI and digital transformation to enhance operations and customer experiences.

Business leaders in the UK are anxious about sustainability, with efforts to go green hampered by a lack of sustainable investment.

That's according to research from BT, with three-quarters (72%) of surveyed business leaders saying they feel stress over sustainability targets.

With the UK government pushing towards climate targets — including an 81% reduction in emissions compared to 1990 levels by 2035 — the report said just shy of a quarter (23%) of businesses are feeling pressure to adopt technologies that support net zero objectives.

"As environmental, commercial, and political pressure builds, sustainability isn’t a nice to have; it’s business critical," said Sarwar Khan, sustainability director at BT’s business arm.

"Tech can be a tool to help businesses tackle climate challenges, but it’s not a silver bullet – and our research tells us that anxiety around where and how to invest is holding organizations back," he added.

Indeed, two-fifths of surveyed execs said they were suffering from ‘investment paralysis’ when deciding what technology to commit to. This could slow the pace of change, the report said.

Green investment falling short

While half (56%) of businesses are optimistic about hitting sustainability goals, just over a fifth (22%) plan to invest in sustainable tech over the coming year. This includes circular IT technology, BT said, such as refurbished or remanufactured computers that help to reduce carbon footprints.

BT's research, carried out by Censuswide between 26 March and 5 April 2024, took in responses from 2,000 UK business decision makers.

The research aligns with a similar report from Kyndryl and Microsoft, which noted that few businesses are deploying technology to meet sustainability quotas despite pushing green objectives.

As many as 84% of organizations placed a high level of strategic importance on achieving sustainability goals, but only 21% said they were doing so with the assistance of technology.

Research from OVHcloud found that over 30% of IT leaders in the UK don’t think they will meet sustainability targets over the next two years, with cost cited as one of the main challenges by 45%.

Lackluster technology investment among British enterprises has cost the economy billions, according to new research from Virgin Media O2 Business.

A study from the telecoms giant found that if UK-based firms had begun increasing their use of digital technology in 2021, they could’ve helped deliver a £111 billion increase in turnover by 2023.

Similarly, increased tech adoption between 2021 and 2023 could have created 676,000 new jobs, the study found, including over 313,000 new roles in small and medium-sized companies.

Nina Skero, CEO at Cebr, which carried out the survey on behalf of the firm, said the research findings underline the high stakes for both businesses and the broader UK economy.

"Our findings clearly illustrate how digital leadership is directly linked to higher turnover, increased productivity and better performance across every economic metric,” Skero said.

"By prioritizing cultivating a strong digital culture, organizations can unlock their full potential and drive sustained growth for the UK economy and wider society."

The report found that three-quarters of UK firms identify as having a “strong digital culture”, with enterprises using a wider array of technologies today than they were in 2021. Notably, 77% said they have increased technology spending across this period and virtually all identified operational benefits as a result.

However, fewer than half said they have implemented regular digital skills programs, only a third are increasing their use of collaboration tools and platforms, and only four-in-ten are implementing better data and cybersecurity measures.

Strong digital cultures deliver success

Workplace culture consultant Bruce Daisley said firms are “sitting on a huge opportunity” and must seize the initiative to capitalize on potential gains.

“The data shows that many businesses have already made significant investments in digital technology, but now they just need to put it to work by focusing on building a stronger digital culture," said Daisley.

"This isn’t just about buying tools — it’s about integrating them effectively into everyday practices. Businesses have dazzling new opportunities to maximize their tech, but we’re seeing that many firms have been slow to implement permanent changes."

Companies with a strong digital culture typically embrace technologies and tools to boost performance and financial results at higher rates, helping to enhance customer and employee satisfaction, the study found.

Four-in-five organizations with a strong digital culture feel their workforce is well-prepared for the future, compared with only 43% of those with weaker digital cultures.

Organizations actively investing in digital solutions also saw turnover growth of 12%, compared with only 5% for the digital followers. Similarly, on average these firms more than doubled the productivity growth of those lagging in digital adoption.

Meanwhile, Gross Value Added (GVA) grew by 8% for digital leaders, while their peers saw no growth at all.

"Digital innovation has the power to spark economic and social progress," said Jo Bertram, managing director at Virgin Media O2 Business.

"By building a strong digital culture and embracing new tools, businesses can unlock an £111bn boost to the UK economy, creating new jobs and growth for companies across a range of sectors."

Fewer than half of digital initiatives hit their business outcome targets, according to research from Gartner, with only a small proportion doing much better.

A survey of more than 3,100 CIOs and technology executives - and over 1,100 executive leaders outside of IT (CxOs) - by the consultancy found it's only among the 'digital vanguard' that the majority of digital initiatives meet or exceed business outcome targets.

"This digital vanguard distinguishes themselves from the rest of CIOs and CxOs because they co-own digital delivery," said Raf Gelders, VP of research at Gartner.

"CIOs and CxOs are equally responsible, accountable and involved in delivering the digital solutions their enterprises need. This is a radical departure from the traditional paradigm of IT delivery and business project sponsorship that predominates in most enterprises."

More than 80% of EMEA CIOs said they expected to increase their investments in cybersecurity, AI or generative AI, and business intelligence and data analytics in 2025, Gartner noted, underlining the continued appetite for digital transformation and emerging technologies.

But the difference between success and failure is how the organization views the adoption of these technologies and what they can deliver, Gelders noted.

"Digital vanguard CIOs do not invest in these technologies to be used by their IT staff only. They also make them easy to use for potential or actual technologists outside of IT," said Gelders.

"On average, there is 26% of business/corporate area staff outside of IT dedicated to building, implementing or managing technology. Many of these technologies naturally lend themselves to easing the burden of work enterprise-wide, accelerating time-to-market and time-to-value, and fostering the accountability of CxOs."

Meanwhile, 43% of EMEA CIOs said they expect to decrease their investment in legacy infrastructure and data center technologies - a trend that's become more common in recent years, mainly thanks to migrating to cloud-based solutions.

One-third, however, are planning to increase investment in this domain. The majority of this investment will be among organizations that are using on-premise infrastructure to experiment and produce generative AI solutions.

Perhaps surprisingly, skills development doesn't seem to be much of a priority.

Only 14% of EMEA CIOs said they prioritize building an enterprise-wide technology workforce - beyond their own IT departments - and just one-in-five are prioritizing sharing technology leadership with other business areas.

Cross-functional collaboration and knowledge exchange is critical to delivering success in any digital transformation program, according to Daniel Sanchez-Reina, VP analyst at Gartner.

Therefore, businesses that lack synergy across different business areas could encounter significant problems. The digital vanguards, however, excel at this.

"Digital vanguard CIOs nurture their peers to become digital vanguard CxOs. Those CIOs make it easier for their CxOs to lead digital with them and for business area staff to build digital solutions together with IT,” said Sanchez-Reina.

“CIOs' success now depends on their CxOs’ success," he added.

To become a digital vanguard, Sanchez-Reina said there are four key areas that CIOs must prioritize. These include:

• Making digital platforms easy for the workforce to build solutions
• Teaching them the interdependencies between technology and business
• Helping business leaders become “innovation leaders” in digital
• Expanding digital skills beyond the IT department

Officials from the San Francisco transportation department have announced they will be replacing their floppy disk-based train control system, jumping on the bandwagon to do away with the legacy storage platform.

The Municipal Transportation Agency board, which is responsible for overseeing San Francisco’s Muni Metro light rail network, signed a new $212 million contract with Hitachi Rail to overhaul its use of floppy disks in its aging control system.

The system was first installed in the city’s Market Street subway station in 1998, using software running the Automatic Train Control System (ATCS) that was stored on 5 ¼ in floppy disks.

The floppy disks need to be loaded each morning and also relied on an antiquated, and notoriously error-prone wire loop communication technology, officials told the San Francisco Chronicle.

They added that they expected the train control system to last for 20 to 25 years, noting it moved data at a glacial speed that was even slower than a wireless modem.

The Hitachi contract is part of a wider $700 million project to transform the Muni Metro’s control system; the purchase will still need to be approved by the Board of Supervisors.

If approved, the new communications-based system, which uses Wi-Fi and cellular signals to keep track of the precise locations of trains is expected to be in place by late 2027 or early 2028.

As part of the deal, Hitachi will provide 20 years of support.

Is this finally the end for floppy disks?

The demise of floppy disks, the once ubiquitous storage technology, has been a protracted one, with some industries and regions finding it harder than others to kick the technology.

Japan, for example, only recently ‘won the war’ on floppy disks in July 2024 after the country’s digital minister Taro Kono announced the nation’s decision to finally deprecate the storage medium in 2021.

Kono said the transition was finally complete after the country completed the process of removing over 1,000 regulations that required the government to use floppy disks in a number of instances.

Although Sony ceased production in 2011, Japanese citizens were still frequently required to submit documents for use on government systems on floppy disks.

This proved a significant issue due to the limited capacity and dismal transfer speeds, meaning trying to use the platform to store anything other than the most basic files was a challenge.

But Japan still has some way to go in getting its digital transformation efforts back on track, with Kono now turning his attention to the nation’s reliance on fax machines.

The vision of the smart office building — and the broader idea of smart cities — haven't quite lived up to the perhaps unfair promise attached to them. For our office spaces, once home to a daily 9-to-5 congregation, it hasn't been exactly certain what the future holds. There have been lofty ambitions to transform the sterile and corporatized environments we frequented daily into thriving and forward-thinking spaces that tapped into emerging technologies like the Internet of Things (IoT), augmented reality (AR), and, of course, artificial intelligence (AI). 

But then COVID-19 struck and the workforce abandoned these spaces in their droves. Since then, "hybrid work" has become the new normal for most, with different businesses adopting different policies – but all among this camp expecting workers to divide their time between the home and the office. But there remain plenty of workers who once commuted in now opting to work remotely most, or all, of the time, leaving many office spaces feeling eerily vacant. Does that mean we should abandon our once-held visions for smart buildings?  

Our changing attitudes to working from the office

Just over half (53%) of US workers prefer a hybrid work model, according to Statista, with a Gallup survey conducted after the return to the office in 2022 reinforcing this idea. It's undeniable to say that offices are now less full than they have ever been. When employees are required to work fully on-site, it leads to lower engagement, lower well-being, higher intent to leave, and higher levels of burnout, the research concluded. And the main reason why people prefer hybrid work? Avoiding the commute – at least for some of the typical working week. 

There is no clear consensus among the workforce as to whether they prefer mostly working from remote or on-site – and this will vary further between organizations. But for at least a part of the week, there is an active desire to work on-site and be surrounded by colleagues. This suggests that the office, as a function and a concept, is far from dead. Moreover, this presents even more reason to invest in the future of the workplace – and tap into these ideas that underline our dreams for smarter buildings. 

With the workforce's sensibilities fluctuating – how long each employee will spend in the office is difficult to nail down – it's important to use the office as a proverbial beacon of light – shining the values of innovation, technological foresight, and collaboration. By doing so, the office becomes a far more attractive place for hybrid workers – and you can use this momentum to continue innovating and upgrading the workspace. 

But most offices are not making the most of this opportunity, Kinly research suggests, with almost two-thirds (65%) of enterprises admitting their workspaces are not optimized for hybrid working. With two-thirds (66%) also wanting to encourage staff back into the office for at least part of the time, you can see the problem here. 

The hybrid technologies to smarten up your building

Smart buildings make use of various technologies, like sensors, to gather data that can be then fed into improving sustainability, reducing inefficiencies, and boosting productivity. In that vein, the smart office could include anything from smart air quality management systems that precisely finetune temperature and humidity to futuristic meeting spaces that deploy AR or holographic solutions. 

"The shift towards hybrid working has placed new complex demands on our workplaces at a time when employee experience determines organizational success more than ever before," said Tina Batham, managing director of Office Principles, a commercial workplace design company, in a blog post in August. 

"This is precisely why smart building technology presents such a compelling opportunity to reimagine our spaces. By embedding offices with networked sensors, automated controls, and integrated data analytics, we can effectively upgrade the IQ of our buildings and work areas. The result is intelligent workplaces that can dynamically adjust to our preferences, tasks, and business goals in real-time."

Right now, communication is key to work in the post-COVID hybrid working environment – where teams are distributed across many geographies, and often time zones too. This is why there has been a sharp surge in collaborative infrastructure and equipment – like meeting rooms rigged from floor to ceiling in technologies that power hybrid sync-ups. 

The Kinly research found that poor hybrid workflows (57%) and outdated AV technologies (58%) damage the productivity of hybrid employees. Indeed, you cannot simply offer a Zoom connection or an old TV that you could hook up to a laptop – you need hybrid solutions that offer far more for employees, to allow real-time meetings to take place seamlessly no matter where workers are based. That is why, this research and others like it, suggest that undergoing an AV transformation is a key first step to embracing a smart building so that your hybrid workers have more of a reason to come in.

But this is just the beginning of the journey. True smart buildings incorporate sophisticated internal communications networks and intelligence systems in the very infrastructure, and the day-to-day operations, added Batham. Not only will this lead to productivity benefits, but employee well-being will rise and you may start to see the beginnings of a resurgence in the thriving 'office buzz' that workplaces now sorely lack – while preserving the flexibility and freedom that hybrid work allows. 

The economic conditions in the years following the COVID-19 pandemic offered many organizations access to incremental capital and additional funding, which led them to increase their spending on software to enable remote work and increase digital transformation.

The rapid adoption of specialized software left many organizations with an overcrowded and disconnected technology stack, however, negatively impacting their productivity and efficiency. Now many organizations are consolidating their tech stacks to manage software sprawl and curb inefficiencies.

At a high level, it may seem like a simple fix – get rid of the software you aren’t using. But there’s more to consider. When looking to consolidate technology, organizations need to understand how each piece of technology fits into workflows and processes and what the implication would be if it were removed. This is where process becomes key, and where MSPs can serve as trusted partners for organizations navigating software consolidation.

The pains of software sprawl

According to Canva’s 2024 CIO report, 72% of CIOs are concerned about application sprawl, and 64% say they don’t have the resources to train employees on new technologies. Their concerns stem from the far-reaching impacts of software sprawl, which often manifests itself in a breakdown in workflow and process. Because teams are using a wide range of different and disconnected tools, data can become siloed, making it harder to share insights across departments. This disconnect can lead to workflows taking longer or being completely disrupted.

Another key concern is shadow IT, where unauthorized tools are used without proper oversight. Emerging technologies, like AI, are only exasperating the challenges of shadow IT as more employees opt to use generative AI daily. The lack of governance that comes with shadow IT introduces security vulnerabilities, like the risk of breaches and data loss.

Additionally, the costs associated with the licensing, maintenance, and integration of software can spiral out of control, especially when the technology is underutilized. A 2024 report found that, on average, organizations use only half of their SaaS licenses, leading to significant financial losses – £18 million for mid-sized companies and £2 million for small companies.

That brings us back to consolidation. Many small and mid-sized businesses feel overwhelmed by software sprawl and are unsure of the best path forward. Enter MSPs.

The opportunity for MSPs

Software consolidation involves more than simply cutting technologies from a stack. After consolidating, businesses must assess how the remaining technologies work within existing processes. This presents an opportunity for MSPs to help businesses ensure that their technology is helping work flow efficiently throughout the business.

MSPs should begin by focusing on what powers businesses: people, and how processes can bring people, technology, and data together to remove friction and enable people to do their best work. This happens by identifying a new platform or expanding the use of an existing platform that can serve as a centralized hub for a business's workflows.

Embracing end-to-end process automation

Many organizations find themselves in their current predicament because they solved specific business challenges with point solutions. HR adopted a new piece of software to process applicants, for example, or finance bought a new tool to process invoices, and so on.

As a result, organizations were left with sprawling point solutions instead of leveraging applications that can automate processes across departments in a repeatable manner.

End-to-end process automation delivers the visibility and connectivity needed to blend process management, workflow automation, and application development into a single platform so that processes can be optimized at-scale. Here’s how:

• Process management identifies touchpoints with software and illustrates how work moves through and between systems. By mapping out processes, MSPs can highlight inefficiencies and determine which tools are essential for productivity. For example, a financial services organization that processes loan applications can leverage process management to see how an applicant moves through the organization and identify where they may be getting stuck.
• Workflow automation helps organizations get more ROI from their software by automating how data moves through the stack and eliminating any peripheral tools that complicate operations. This unification not only enhances collaboration among teams but also maximizes the potential of existing software investments. For example, the same financial services organization can leverage workflow automation to optimize many customer-facing steps, like application forms, approvals routing, and more.
• Application development allows organizations to present data from across systems and resources, providing a comprehensive view of operations and facilitating informed decision-making. These applications present data in user-friendly formats to increase adoption among users and easily scale across organizations. For example, once the financial service organization has automated its loan process workflows, it can use a low-code application development environment to create a single application for users to apply for numerous loan types instead of separate systems.

Creating functional, automated processes not only unites people and technology but also identifies the most critical technology needed to drive business outcomes. A significant driver of technology consolidation is the strain excessive software places on IT teams. Low-code process automation platforms reduce the need for dedicated IT resources by enabling non-technical users across departments to automate their processes and connect technology across the organization.

As UK businesses seek to drive efficiency and manage software sprawl, MSPs are uniquely positioned to assist. By applying automation and refining processes, MSPs can help businesses optimize their consolidated tech stacks, integrating disparate systems and automating workflows to unlock greater operational efficiency. In this way, automation empowers MSPs to navigate the complexities of modern IT environments while driving sustained business success for themselves and their clients.

The patchy hues of pale blue and cream carpet that line the hallways of Pittsburgh International Airport (PIT) are dimly lit. Its vintage decor is a nod to its heyday as a major transportation hub. With four runways and 10,000-plus acres of land, the airport was once a major beacon of travel – with 100-plus direct flights taking off daily – and some 90% of passengers connecting to the rest of the US.

But turbulence following 9/11 and shifts in consumer behavior have impacted PIT over the years. At its lowest point, activity dropped to roughly 50 daily direct international flights, with bankruptcy looming at one notable stage. What followed was well over a decade of stagnation, before a turn of fortunes and fresh leadership – Christina Cassotis's appointment as CEO in 2015 – put PIT back on track. It was now chasing not only 'restoration', but evolution through digital transformation.

Today, the airport is in the midst of a major transformation project to the tune of $1.4 billion, symbolized by its new Departures terminal set to open in 2025. In 2021, PIT also became the first airport in the world to power itself with its own on-site microgrid – using solar farms and natural gas supplies. Its eco credentials are bolstered with an on-site honey production operation, with bee farms dotted around the site.

But among its most exciting projects is xBridge, a program that has set its sights on injecting innovation into the aviation industry by giving startups the perfect testbed to trial and launch innovations: the airport itself.

An airport is like a small city

For decades, the city of Pittsburgh – and the wider Allegheny County – has been on a technology-driven modernization journey, powered by an engine comprising top universities and the expansion of its AI and robotics industries.

These efforts follow economic devastation in the 1980s, triggered by the shuttering of much of the regional industry, such as steel-making, that had served as a lifeline for its people since the 1800s. Pittsburgh's reputation as a tech hub has emerged from these ashes, with a roll call of successful startups and massive infrastructure projects underlining this turnaround. When Cassotis joined PIT, she posited: why can't the airport get in on this? Thus the idea for xBridge was born.

"When you think of an airport, it's kind of like a small city," says Cole Wolfson, director of xBridge, in conversation with ITPro. "Every industry that you can think of operates within an airport. It's not just transportation, but everything from food and beverage, to security, to material handling, to logistics, to communication, to sustainability. So that means that there are opportunities for new companies and new technologies to interface within the airport to help perfect their product, or their service, or their value proposition, or whatever industry they're looking at."

Wolfson joined xBridge three years ago with no background in aviation. Rather, he worked for an early-stage venture investment organization and had previously run a hardware accelerator in town. "When I came in here, I looked at the airport through the lens of early-stage technology companies,” he says. “And when you look around an airport through that lens, what you see is this massive resource with so many opportunities to positively impact the growth and development of technology companies, especially early-stage ones."

Presently, xBridge examines 100 individual projects. From that pipeline, PIT has so far engaged with approximately 25 projects to create a technology proof of concept.

To date, there have been three solid examples of projects that have been implemented either at PIT or elsewhere in the industry. The timeline from conception to adoption ranges from four months to two years, Wolfson adds, depending on how complicated it is and what infrastructure is required. But he insists PIT moves quickly relative to other airports.

PIT: Projects for the future

Carnegie Robotics' automated floor scrubbers

One of the earliest projects, before even Wolfson's time, centered around deploying a robotic cleaning machine developed by Carnegie Robotics – an autonomous vehicles startup based in Pittsburgh. The company outfitted the airport with a number of its self-driving SC50 floor scrubbers and when COVID-19 hit, it outfitted these robots with ultraviolet lights to kill more surface bacteria and viruses. PIT went on to buy four of these machines, with airports around the world also buying into the new technology.

Mapless AI's remote-controlled taxis

PIT started working with this startup – founded by two people who came out of the local autonomous vehicles scene – more than two years ago. Conceding that true autonomy was years away, they pivoted to remotely operated vehicles. The company’s proposition is that in the medium term, this technology has great potential value. In partnering with PIT, Mapless AI plugged into the existing rental car presence at the airport, allowing it to test its ideas in the surrounding parking lots and roads. To date, it has had success in providing a tele-operated car service to passengers.

AlgenAir's 'living' air purifier

On the baggage claim level at PIT, there sits a giant air purifier that uses algae to reduce carbon dioxide indoors and produce oxygen – combatting indoor air pollution using photosynthesis. The installation has the carbon-positive equivalent of more than 5,000 plants and can be used in composting or to fertilize plants in the airport. The project emerged from a startup named AlgenAir that built a consumer-grade air oxygenator that looked like a lava lamp but wanted to expand into the commercial space. Deploying a prototype at the airport helped to test passenger reactions, what the cleaning cycle is like, and other considerations, so it could figure out whether there was an opportunity to deploy the 'living machine' at scale.

A unique model for digital transformation

"The secret sauce of what we do at xBridge is really about process, more than anything else,” says Wolfson. “We come out of this early-stage world and so we have a large network of universities, accelerators, venture interest, venture capital groups, et cetera. So essentially, we went out to them and we said: here's what we're doing here, have you got any companies that would be interested in this?

“And every single one of them had a couple – because the biggest hurdle that early-stage tech companies have is finding that first deployment site, and that first customer.”

Wolfson has examined how other airports run similar projects, noting that some have ‘innovation studios’ with a staff of around 100 people who go out into the airport and solicit ideas to use internally. There are also models in which an airport builds an incubator, or an accelerator, with capital or without external capital. Some models also see airports that solicit need and then go out and find solutions externally to bring in.

"Everybody does different ones, and there's certainly some overlap. What I have found is that we've gotten a lot of attention because nobody really does it this way," he adds.

The model xBridge uses sees it curating this vast pipeline of projects, taking time to evaluate which candidates pass the "smell test". Then they speak with the project organizers and perform due diligence on the proposal – before xBridge representatives approach a consortium of internal stakeholders spanning representatives of every major kind of business unit across the airport.

Rather than asking whether or not they think it's a "good idea", they ask "Will it break the airport?" explains Wolfson. That's because the knee-jerk response is to avoid change and taking risks, which xBridge avoids by lowering the bar. "It's not going to hurt anybody to try it," he adds.

From there, xBridge evaluates the technology, deciding whether it does what it was supposed to, and then seeks a business unit or partner airline to match with the project to test its value proposition.

"We're working as stewards with that customer to implement that project,” Wolfson explains. “Then we evaluate it again, and then we either bury it or we hand it off to that business unit or that partner to decide to scale."

Overcoming hurdles to successful modernization

There are two key challenges that Wolfson encountered after joining PIT's xBridge project. The first is that the responsibility for different processes and operations generally are so vastly distributed and involve a large number of parties. There's the airport itself, alongside the individual airlines, baggage handles, the ground crew, the concessionaires – and more. So it's tricky when you're trying to do something new.

Airports are also highly regulated environments, so there are easy places and hard places to do new things. "In the easy places, a lot of stuff has been done, and so it comes down to how do you do it in the hard places? And there are even more stakeholders when you get into that group," Wolfson says.

The group is working hard to overcome these hurdles and achieve success. But what does that actually mean? One is the number of projects that you push through, Wolfson says, the other is around adoption. "How many of these [projects] have found a place within the industry in some way or another?"

Ultimately, though, Wolfson isn't one for metrics alone.

"Those mean something, but I don't really use them, because anecdotally there are a lot of interesting things happening that can't be necessarily quantified. I could talk about 'continued engagement' but what does that really mean?

“I think more broadly if you look at the partners that we're engaged with, the ways in which we're pushing various aspects of the industry forward, the way that we're getting outside groups to spend more time with Pittsburgh companies in order to figure out how to deploy these technologies – those are soft metrics. But they certainly are metrics that if you look at, you can see the value."