Kyndryl’s second annual Readiness report has found that geopolitical pressures have become more important in IT decision-making compared with 12 months ago.
According to the poll of 3,700 senior leaders across 21 countries, including the UK, 83% of the people surveyed agree that emerging data sovereignty and repatriation regulations are influencing IT decision-making, while 82% agree that their IT decision-making is being influenced by rising geopolitical instability and tensions.
Kyndryl said that geopolitical pressures are forcing a data pivot. While reporting clear benefits from cloud adoption, organisations are now reevaluating where and how their data is stored, processed, accessed and secured, amid an increasingly fragmented regulatory landscape.
Three-quarters (75%) agree their organisation is increasingly concerned about the geopolitical risks associated with storing and managing data in global cloud environments. In fact, 86% agree the country of origin and regulatory alignment of cloud providers are becoming increasingly important factors in their cloud evaluation process. Businesses are also balancing legacy infrastructure challenges, with 70% of CEOs saying they reached their cloud setup by accident rather than design.
Looking at the data for the UK, Kyndryl reported that 80% of UK leaders are concerned about the geopolitical risks of storing and managing data globally, which is higher than the global average of 75%. This has led 68% of UK respondents to change their cloud strategies.
Overall, almost a third (65%) of the people surveyed agree that their CEO and chief financial officer are not aligned with the long-term value of technology investments. Nearly three-quarters (74%) say the pressure to demonstrate short-term return on investment undermines longer-term innovation goals.
The survey found that 63% of the organisations polled say they experienced more costs than expected from moving to the cloud. Kyndryl’s survey also reported that 62% invested heavily in cloud early on, but have since had to revert some workloads to on-premise. Over half (56%) of the organisations polled say they have inaccessible data in environments that were never properly decommissioned.
Kyndryl also reported that almost all of the companies surveyed (95%) would change the way their organisation implemented its cloud strategy if they had the chance. When asked how they would change their cloud implementation, the top priority would be more focus on security and compliance, followed by a better understanding of integration complexity.
In fact, 83% of UK businesses experienced a cyber-related outage in the past year, making cyber security and IT infrastructure upgrades the top two risk-mitigation actions (43% each).
Looking at the adoption of artificial intelligence (AI) among the organisations polled, Kyndryl reported that although over half (54%) say they are seeing positive returns on AI investments – an increase of 12 points from 2024 – 62% still have yet to advance their AI projects beyond the pilot stage.
The figures for the UK show that while 84% of UK executives polled say AI will completely transform roles and responsibilities in the next 12 months, 46% worry about having the right technical skills to get the most out of AI.
“A readiness gap exists as enterprises grapple with the promise of transformative value from AI,” said Martin Schroeter, chairman and CEO of Kyndryl. “While 90% of organisations think they have the tools and processes to scale innovation, more than half are stalled by their tech stack, and less than a third say their employees are truly ready for AI. Closing that gap is the challenge and opportunity ahead.”
