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Accenture report reveals legacy tech debt hindrance for CSPs' growth
Thu, 29th Feb 2024

A new report titled "From survive to thrive: Tech transformation for CSPs future" by Accenture has highlighted issues communications service providers (CSPs) face on their IT transformation journey, specifically regarding tech debt legacy systems. CSPs have been striving to devise new systems in order to gain a technical edge, but tech debt remains unresolved, impeding financial growth and enhancing business agility.

The study surveyed senior executives from global CSPs and revealed that three-quarters of the companies reported at least 55% of legacy tech debt in 2023. High tech debt impacts IT expenses and diminishes business agility, an issue recognised by 84% of the surveyed companies. With increasing IT costs and decreasing business agility, the need for continuous IT transformation is being acknowledged more than ever.

In terms of satisfaction from IT modernisation investments made within the last three years, less than 7% of executives at CSPs expressed full satisfaction. This lack of satisfaction coupled with an inability to monetise their networks at 60% contributes to the top business impacts of legacy IT systems. Continuous IT transformation failure could risk future growth opportunities, as voiced by 84% of CSP executives.

The report also revealed that operational and financial costs of maintaining legacy systems have been rising annually for 77% of CSP executives. Moreover, while 93% of CSPs acknowledge the importance of a cloud-first infrastructure, surprisingly, only 26% are practicing such a transformation in their business models. Artificial Intelligence (AI) also remains a stumbling block for numerous companies. While 91% recognise AI's significance, only 22% have incorporated it into their customer and network operations.

Paolo Sidoti, Communications, Media, Technology (CMT) Lead for Accenture ANZ, commented on the survey results. He emphasised the urgency to accelerate transformation in order to reduce tech debt, given that companies with lesser tech debt consistently outperform their peers in IT costs, business agility, and financial growth. Sidoti highlighted decoupling legacy systems as a crucial step, and investing in modern IT systems, cloud, data and generative AI, retraining talent, and implementing open technology architectures are vital to achieve it.

Only 18.7% of CSP executives believed their organisation has the appropriate talent to meet emerging IT needs. As per sidoti, a people-first mindset is essential, and 80% of CSPs agree that a cultural shift within the organisation is required, focusing on fostering a skills-driven talent with a data-driven approach.

Accenture surveyed 252 global CSP senior executives and decision makers to assess the challenges CSPs face on their IT transformation journey and their maturity on the modern digital core. To complement the survey findings, the company collected case studies focusing on the evolution of organisations towards the modern IT, its transformative impact on the business and best practices.