Kyndryl released a report showing that many organisations in Canada are falling behind on IT modernisation, putting the country among markets facing stronger operational and budget barriers than the global average.
Canadian firms lag behind global modernisation pace
According to the survey, 47% of Canadian respondents say they are behind their modernisation targets. The most-cited hurdles include integrating legacy systems, budget or approval delays, reluctance to alter established processes, and limited technical-team capacity.
The study sampled roughly 2,000 business and technology leaders across five continents and twelve industries. Across the full sample, nearly half of organisations were off schedule, and 98% that delayed modernisation reported negative business effects.
Canadian pressures appear sharper than the global picture. 58% of Canadian firms listed legacy-system integration as a top challenge, versus 48% worldwide. Likewise, 57% pointed to budget constraints or approval delays, compared with a similar share worldwide.
Resistance to change is also more pronounced. 51% of Canadian respondents said business reluctance to change established processes hindered progress, while the global figure stood at 39%. Technical-team capacity was a concern for 50% of Canadian firms, versus 42% elsewhere.
Despite these constraints, 73% of Canadian organisations are engaged in mainframe modernisation, outpacing the global rate of 68%.
The report notes that firms are not simply swapping old systems for a single new platform. Instead, they are expanding use across mainframe, edge computing, private cloud, SaaS and network infrastructure as artificial intelligence reshapes investment priorities.
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Adopting AI now ranks ahead of efforts to cut spending, replace legacy systems or address a shrinking pool of legacy-systems expertise. Every organisation in the global survey that operates a mainframe plans to deploy AI on that platform.
This shift creates more complex technology estates. Mission-critical applications are now spread relatively evenly across public cloud, private cloud, mainframe and on-premises systems, forcing leaders to manage a hybrid operating model.
Only about 10% of organisations have deployed agentic AI in production for tasks such as dependency mapping, code conversion and documentation generation. Those early adopters report better delivery progress: a majority say they are ahead of or on track with modernisation goals, versus roughly half of others.
Visibility into existing systems remains limited. Just 9% of respondents claim they fully understand their applications’ dependencies, and a quarter admit to having large numbers of undocumented applications.
Decision-making now involves nine stakeholder groups, including CIOs, CTOs, boards of directors, finance and compliance teams. This diffusion makes modernisation as much a business-governance issue as a technical one.
Geography and regulation are influencing infrastructure choices. 63% of organisations expect sovereign cloud usage to increase, while 55% anticipate that sovereignty and regulatory requirements will place greater demands on network architecture.
Martin Schroeter, Chairman and Chief Executive Officer of Kyndryl, said: “AI is creating new possibilities and raising expectations for the business outcomes technology should deliver. Modernization is about preparing for what comes next, and the leaders making the most progress are investing across their technology environments – strengthening resilience and putting those investments to work where they deliver the greatest value.”
