In a detailed blog post released November 4, Microsoft revealed that organisations face significant hurdles in modernising their operations for AI implementation. According to an IDC survey cited in the blog, legacy systems comprise approximately 50% of typical application estates.
Mike Hulme, General Manager of Azure Digital and App Innovation at Microsoft, emphasised that successful modernisation extends beyond mere technical upgrades. The blog explains that modernisation means updating and improving assets across all business areas so they work well with evolving software and the cloud.
The framework addresses a pressing need in the business community. According to the blog, 61% of business leaders report their organisations plan to invest most in generative AI as they prepare for the next evolution of generative AI-infused apps. However, the transition presents substantial challenges, particularly for established institutions.
Jeroen Unger, Director of Global Alliances at Backbase, highlighted the financial implications in the Microsoft blog: "It's a multi-million-dollar exercise for banks to modernise their core. And for large banks, it could even be hundreds of millions of dollars and a multi-year effort."
The modernisation approach outlined in the blog consists of three critical components: technology strategy development emphasising leadership buy-in and clear alignment with business objectives; operational process updates focusing on mapping operational processes to modernisation activities; and technology stack enhancement addressing the need for integrated technology solutions supported by strategic partnerships.
Leading organisations are already seeing results from this approach. In the blog post, John Cox, Chief Technology Officer at Coles, reports: "Our entire supply chain is being driven through a machine learning engine... So, it is giving insight at a super localised level. We're also using it to ensure that we are scheduling our team members based on customer demand and making sure we keep the shelves stocked appropriately."
The framework represents a shift in how businesses approach modernisation, with Microsoft positioning AI readiness as a crucial outcome. The blog emphasises that success depends on coordinated efforts across organisational levels, from leadership to frontline workers.