2 years to transform: why executives are fast-tracking legacy modernization

AI has quickly become one of the top three drivers pushing businesses to modernize their legacy systems. Once a backburner initiative, legacy modernization is now a strategic imperative. 

Driven by AI, senior leaders are setting ambitious two-year timelines to complete an array of major modernization initiatives. However, these goals hinge on an equally aggressive effort to retire technical debt, something most organizations admit they won’t achieve even within five years. 

To succeed with their legacy modernization efforts and meet their goals in two years’ time, business leaders will need to be ruthless in prioritizing what needs to happen, when. 

At Cognizant, we’ve identified a practical path forward. Our self-propagating flywheel approach helps organizations strategically sequence their modernization initiatives to generate early cost savings, productivity gains and revenue growth. These early wins then fund and accelerate broader modernization efforts, creating a sustainable cycle of progress. 

This strategy is grounded in insights from our global study of 1,000 senior executives at Global 2000 companies. We defined legacy modernization as the transformation of any system, application or infrastructure that could hinder an organization’s ability to adopt AI or meet evolving customer expectations. 

Key findings from the study 

AI has made modernization non-negotiable: 85% of executives are concerned or very concerned that their current tech stack will prevent successful AI integration. 76% say they’ll struggle to support consumer adoption of AI. 

The two-year clock is ticking: Most leaders expect to complete major modernization milestones within two years, including back-office systems (77%) and customer-facing applications (80%). But these expectations may be overly optimistic. 

Barriers are real—and growing: Top challenges include complexity (63%), lack of skilled talent (50%) and limited capital (48%). 

Tech debt is the elephant in the room: While retiring tech debt is seen as essential to long-term modernization, the vast majority (79%) will retire less than half of their technology debt by 2030. 

A flywheel for the future 

Our research shows that a phased, self-funding approach is the most viable way forward. By aligning modernization priorities with initiatives that deliver early benefits and savings, organizations can build momentum and unlock the resources needed to tackle more complex transformations. 

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