CSA Exclusive: Retailers see AI-driven need for technology upgrade

Retailers believe key systems need to be modernized before they can benefit from artificial intelligence (AI).

Results of a new survey of global retail IT leaders exclusively released to Chain Store Age by Rackspace Technology indicate 83% of respondents say they will only benefit from AI if they modernize legacy apps and data.

Overwhelmingly, modernization initiatives are led by IT departments (67%) and executive leadership/C-suite (44%). Respondents identified ERP, CRM, and HR as the apps that most need upgrading; followed by business intelligence, data storage, content management, data analytics, governance and security and data integration.

According to the survey, respondents identified increased security (56%), increased cost reduction (52%) and improved efficiency (50%) as the leading motivators of modernization. Only about half (48%) of respondents’ legacy infrastructure, can be modernized, 59% saying they have been in the cloud between one and 10 years.

When respondents were asked to identify the top expected outcomes of modernizing, the ability to adopt advanced technologies led the way, followed by cost savings, security, efficiency, innovation and speed.  Respondents also noted that modernization has resulted in better data management, integration, quality, and lowered data costs.

However, many respondents say they still face unforeseen challenges to modernization, including limited resources (33%), integration challenges (17%), cultures resistant to change (16%), lack of senior buy-in (12%), lack of a clear roadmap (11%) and communication between stakeholders (6%).

If retailers fail to modernize legacy apps and data systems, respondents believe it will result in increased costs (33%), the inability of adopting advanced technologies, poor security (28%) and lack of innovation (26%).

 “Retailers cite costs and security issues as two of the main reasons why they have not modernized their apps and data,” said Jeff DeVerter, chief technology evangelist at Rackspace Technology. “However, they also say two of the key benefits of modernization are lower costs and greater security, indicating that many organizations are stuck in a Catch-22.”

 The survey was commissioned by Rackspace Technology and supported by Amazon Web Services (AWS), and conducted by Coleman Parkers Research between April 27, 2023 – May 25, 2023.  The survey is based on the responses of 1,420 IT decision-makers across sectors including retail, in the Americas, Europe, Asia and the Middle East.

[Read more: Exclusive: How important is AI in retail?]