- Asia-Pacific findings show organizations prioritizing performance, agility and control alongside AI as technology environments become more complex
- 49% of APAC organizations are behind schedule on their modernization goals
- Organizations across APAC are expanding across multiple technology environments rather than consolidating on a single platform
Kyndryl (NYSE: KD), a leading provider of mission-critical enterprise technology services, today released the Asia-Pacific findings from its first global Modernization Report, which found that as organizations expand investments across legacy and modern platforms, modernization increasingly requires business orchestration, not technology consolidation.
“Across Asia-Pacific, modernization is no longer a choice between investing in AI and strengthening the technology underneath it,” said Megawaty Khie, Vice President & Managing Director for ASEAN & Korea, Kyndryl. “Organizations need both. As technology environments become more distributed, the challenge is deciding where to invest, what to modernize and how to keep those environments secure, resilient and future ready.”
Based on insights from 2,000 business and technology leaders across five continents and 12 industries, with 30% of respondents based in Asia-Pacific, the research shows how AI is reshaping investment priorities across infrastructure and applications, while also challenging organizations’ operating models.
In Asia-Pacific, AI is one of several closely ranked modernization priorities. Enhancing performance, security and integration; improving business agility, innovation and scalability; and increasing control, predictability and governance each rank at 36%, compared with 34% for enabling advanced AI capabilities.
AI is the top driver of increased mainframe and edge computing use, the second-biggest driver for SaaS and private cloud expansion, and the leading reason organizations are upgrading their networks and application portfolios. Every organization with a mainframe now reports plans to deploy AI to the platform.
In Asia-Pacific, 49% of organizations are behind schedule on their modernization goals. Among organizations that have postponed modernization projects, 44% reported higher long-term costs, 43% reported an inability to adopt new capabilities quickly and 38% reported new security or compliance vulnerabilities.
Agentic AI, which can autonomously plan and execute tasks, is emerging as a way to modernize faster. Adoption remains at an early stage, with 10% of organizations in Asia-Pacific using agentic AI in production for modernization – in line with the global average. Organizations are applying it to typically time- and skills-intensive tasks such as dependency mapping, code conversion and generating documentation.
Among other findings, Kyndryl’s study shows that:
- Modernization has become a business-wide priority, not just a technical oneThe findings underscore the growing demands on CIOs, who must advance several priorities at once: AI adoption, cyber resilience, regulatory compliance, operational efficiency, and business growth. Respondents named nine distinct stakeholder groups with control over modernization, from CIOs and CTOs to boards of directors and finance and compliance teams. Modernization has outgrown the IT department and become a board-level business decision. Its growing importance also requires organizations to coordinate decision-making across more stakeholders without sacrificing speed.
- Global events shape technology decisions alongside cost and performanceSovereignty considerations are a growing factor in modernization strategies. In Asia-Pacific, 37% of organizations address sovereignty selectively where external requirements apply, while 26% view it mainly through a compliance lens. Only 7% anchor enterprise transformation in sovereignty principles from the outset, even as 65% expect to increase their use of sovereign cloud regions or dedicated zones over the next year. The findings suggest that the geographic location of where technology runs is increasingly being shaped by governance and geopolitical considerations alongside performance, cost and innovation.
- Complexity keeps compounding The findings challenge the long-held assumption that digital transformation would lead organizations to gradually migrate toward a single preferred technology environment.As digital transformation extends across the business, it must be underpinned by strategic, governance, and operational coordination—including a more integrated approach to cyber resilience as AI-driven threats accelerate and broaden.