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2023 State of IT Modernization – Securing Enterprise Competitiveness

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Today’s world is characterized by rapid technological changes. New technologies are emerging at an unprecedented rate, disrupting businesses and industries worldwide. Adoption of these new technologies can be a make-or-break moment for organizations. Therefore, businesses need to keep modernizing their IT infrastructure to stay competitive and relevant. The pace of technological change is accelerating. In the past, it took decades for a new technology to go mainstream. Today, new technologies can go from concept to commercialization in just a few years.

Nasscom’s 2023 State of IT Modernization report aims to assess the level of IT modernization preparedness of across enterprises across various sectors. It also elaborates on the evolution of IT modernization and its phases over the years, insights from the first ever nasscom IT Modernization end user survey, roadmap for end users, and playbook and framework for enterprises for scaling IT modernization.

Key Findings

IT Modernization has become the mainstay for enterprises to survive in this rapidly digitalizing world

  • Planning – assessing current needs, goals, and IT infrastructure
  • Implementation – changes made to IT infrastructure
  • Testing – testing new infrastructure
  • Deployment – new infrastructure provided to users
  • Key modernization benefits include over 30% increase in IT productivity, upto 60% reduction in defects, upto 60% reduction in time to market, and over 40% increase in employee motivation.
Over the years, the scope of modernization has expanded to include cloud, security, data, platforms, applications, and emerging tech.

  • Cloud Migration – Migration of enterprise’s applications, data, and other resources to cloud.
  • Application modernization – Updating / replacing legacy applications.
  • Platformization – Creating / updating platforms for applications to run.
  • Emerging Tech infusion – Adopting new technologies.
  • Data modernization – Updating / replacing data systems.
  • Security modernization - Updating / replacing security systems.
Nasscom’s 2023 IT Modernization Survey – first of its kind assessment of IT modernization levels across a mix of end user sectors

  • Modernization is topmost priority for most enterprises- 88% users have up to 60% of their Tech budget dedicated to IT modernization.
  • Top 4 key benefits of IT modernization - productivity boost, reduced operational costs and tech debt, improved business agility, and scalability.
  • 61% enterprises intend to re-architect/rebuild legacy applications.
  • North American enterprises are ahead of others in the IT modernization journey due to strong focus on innovation, large and mature IT markets, well-developed financial markets and strong regulatory environment. Indian enterprises are fast catching up.
  • Larger enterprises (>$100Mn revenues) have a more planned approach in their modernization journey with a long-term vision in place.
  • Gen AI, 5G/6G, Web 3, and Blockchain are top emerging technologies completely reshaping IT modernization journeys of enterprises.
  • Key future considerations for enterprises in IT modernization journey include data residency and security.
  • In the next 2 years, 47% of enterprises would have modernized up-to 60% of their applications.
2023 IT Modernization Maturity Index

  • Nasscom’s modernization maturity analysis by vertical keeps in mind several factors such as the size and complexity of the business, their modernization priorities, cloud strategy, the sector’s specific needs, their usage of emerging tech, and the level of investments, to arrive at 4 maturity levels – Commencer, Enthusiast, Expert, and Evangelist.
IT Modernization Business Growth Playbook for Service Providers has 5 Building Blocks

  • Only 1/3rd of end users are satisfied with their current state of modernization.
  • Technology service providers need to focus on five building blocks that are essential to successfully scaling IT Modernization – Strategy, Technology, Data security, and Process.

Get The Report

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