Endava and IDC’s latest research highlights the importance of core modernization for successful AI adoption. The report explores the challenges and opportunities of AI-driven transformation and the role of strategic partnerships in achieving business goals.
Endava, a leading provider of next-generation technology services, today launched an IDC InfoBrief, sponsored by Endava, Navigating the Digital Shift. The IDC InfoBrief explores how AI can unlock new potential for organizations, but only if supported by the right core infrastructure investments.
Compiled from IDC surveys across Europe, APAC, and the Middle East, the paper reveals that digital services revenue is set to rise by 44%, expanding from 34% to half (49%) of organizational revenue by 2029. However, the paper highlights an urgent need to modernize for greater operational efficiency. Half of all surveyed firms (49%) attribute overspending on digital infrastructure to the cost of maintaining legacy systems, underscoring the need for change.
The research also reinforces the importance of data quality as the backbone of resilient core infrastructure. Yet, one in three companies report that poor data quality or inadequate infrastructure hampers their ability to achieve higher success rates in generative AI projects. This could have a significant impact, given that 70% of firms believe generative AI has either begun disrupting their business or will do so in the next 18 months.
With this in mind, AI solution spending aligns with growth expectations, with 51% of organizations prioritizing IT investments to enable growth, followed by access to skills (41%) and addressing insufficient internal capacity (38%). This is also driven by the C-Suite agenda; while transforming business processes is the leading short-term modernization and transformation initiative in support of digital business ambitions across all personas (as nominated by 54% of IDC survey respondents), 60% of CEOs highlighted deploying AI, machine learning or GenAI, making it their leading priority.
The analysis found that we’ve moved from a state of “generative AI scramble” from 2023-24 to “the AI pivot” in 2025-26, resulting in “the AI fuelled business” in three years’ time. These findings highlight a critical juncture for organizations to move beyond experimentation and adopt a structured approach to AI projects, aiming to operate AI-fuelled businesses. Additionally, 47% of firms identified strong strategic partnerships as the key factor in the success or failure of generative AI projects. 50% of organizations are set to expand and diversify their partner networks, recognizing collaboration as key to unlocking AI’s full potential.
Also Read: Cracking the Code on Deepfake Speech Detection
Endava CEO John Cotterell commented: “To navigate the fast-changing markets in the era of AI, companies must modernize their core systems and address outdated legacy structures. As we advance towards AI-driven business transformation, core modernization is a foundational step.”
“Our research shows that businesses are actively looking to invest in AI. However, addressing existing systems through internal modernization, new technology investments or partner network diversification is a critical first step in doing so. It’s encouraging to see industry leaders recognising this value, and as AI becomes increasingly ubiquitous, core modernisation will continue to rise as a key enabler of success in the digital era.”To learn more about how modernizing AI-led digital transformation, including strategies for rising above challenges, read the InfoBrief here.
