AI Growth Demands Core Modernization: Endava

Endava, a provider of next-generation technology services, unveiled an IDC InfoBrief titled Navigating the Digital Shift. Sponsored by Endava, the InfoBrief highlights the transformative potential of AI, contingent on robust core infrastructure investments.

Drawing from IDC surveys across Europe, APAC, and the Middle East, the InfoBrief reveals that digital services revenue is projected to rise by 44%, increasing from 34% to 49% of overall revenue by 2029. However, the report emphasizes a pressing need for operational efficiency upgrades, as nearly half of surveyed firms (49%) cite overspending on outdated digital infrastructure due to legacy systems—a significant obstacle to growth.

The report underscores data quality as essential to resilient infrastructure, but one in three companies struggle with poor data quality or inadequate infrastructure, limiting their success with generative AI projects. This challenge could prove critical, with 70% of firms indicating that generative AI is either already impacting their business or will do so within 18 months.

AI solution investments are aligned with growth ambitions, with 51% of organizations focusing on IT investments, followed by the need for skills (41%) and expanding internal capacity (38%). CEO priorities highlight AI deployment, with 60% focusing on AI, machine learning, or generative AI as top initiatives. Short-term, 54% of companies are modernizing business processes to support digital transformation.

The analysis shows a shift from a “generative AI scramble” in 2023-24 to an “AI pivot” in 2025-26, positioning firms for “AI-fueled business” models within three years. Additionally, 47% of organizations attribute generative AI success to strong strategic partnerships, with 50% planning to diversify partner networks for enhanced collaboration.

Endava CEO John Cotterell commented: “To navigate fast-evolving markets, companies must modernize core systems and address legacy challenges. As we move towards AI-powered business transformation, modernizing core systems is foundational.”

He added, “Our research highlights that investing in AI must go hand-in-hand with core infrastructure updates. This, combined with partner diversification, is critical for success in today’s digital economy.”