Rocket Taps IDC To Assess The Benefits Of Full Scope IT Modernization

September 22, 2025 Alex Woodie

It wasn’t long ago that the words “IT modernization” conjured images of old, clunky 5250 screens becoming nimble, fresh Web interfaces. That is one form of modernization, but today the phrase can refer to a gamut of upgrades across applications, infrastructure, skills, processes, and people. So what defines success with IT modernization in 2025? Rocket Software recently commissioned IDC to find out.

To understand what modernization means today and how well organizations are pursuing it, IDC polled 822 IT modernization decision-makers at organizations in North America, Europe, and the Asia/Pacific region. The surveyed firms included companies in financial services, healthcare, and manufacturing and governmental agencies with employee counts ranging from less than 1,000 employees to more than 10,000.

IDC measured how the organizations faired across the six pillars of IT modernization. Those include:

IT Infrastructure: Optimizes cost and performance across hybrid environments
Application Development: automates DevOps using modern languages, cloud-native containers, and AI
Data Management: Ensures consistent data quality, security, and accessibility across all workloads and systems
Cybersecurity: Ensures data assets and business processes are hardened and protected from unauthorized access or malware
IT People, Process, and Skills: Ensures the effective IT performance while maximizing staff retention and skills
And AI Readiness: Supports the deployment and operation of mission-critical AI applications and infrastructure

IDC concluded that there was a considerable spread in maturity when it comes to organizations with IT modernization initiatives, with those at the high end of the distribution showing twice the level of business outcome improvement in some categories than those at the bottom.

For instance, the highest achieving organization improved employee productivity by an average of 28 percent, versus only 14 percent for organizations at the bottom of the curve. Customer satisfaction similarly was improved an average of 27 percent among top performers, versus 12 percent for those at the bottom. IDC also measured innovation, operational efficiency, and revenue growth (see Fig 1).

Fig 1. The percent improvement in business outcomes reported due to IT modernization.

IDC classified these organizations into four buckets. IT modernization experts compose the top 10 percent of the curve, and typically have coordinated their programs across infrastructure, application development, data management, and other domains, IDC says. They display the highest levels of business outcomes.

The next top 30 percent of organizations are IT modernization leaders. They have typically taken several steps to modernize components of their IT setup, but they usually have not fully coordinated them. The 30 percent cohort below that is composed of IT modernization pioneers, those brave organizations that have started down the path of IT modernization, but are still working to fully fund programs and deliver results.

Finally, the organizations at the bottom 30 percent of the ladder are IT modernization explorers, who are at the earliest stages. They take a tactical approach to modernization, and typically lack internal metrics and KPIs. They lag far behind industry experts when it comes to delivering business outcomes.

IDC also analyzed IT-centric key performance indicators (KPIs), including data quality and compliance, customer satisfaction/NPS, cybersecurity, service level/performance improvements, and IT sustainability improvements. IDC found a similar spread in achievement rates with the KPIs, with the IT modernization experts demonstrating twice the scores in metrics like data quality and customer satisfaction than the less mature organizations.

IDC found that organizations with highly rated IT modernization programs spend more on modernization, which is not surprising. The group found the highest performing groups spent 47 percent more than the lowest performance groups.

Fig 2. The percent improvement reported with IT modernization metric as a result of IT modernization.

Much of the modernization work today is being done in anticipation of AI technology. This was a trend spotted in a recent Kyndryl modernization survey, which we wrote about last week. IDC found 82 percent of the top-ranking IT modernization groups are prioritizing the deployment of AI-ready infrastructure over the next two years, versus just 22 percent of IT modernization explorers looking to do that.

The survey found 76 percent of the top-rated IT modernization groups are looking to consolidate datacenter servers, storage and facilities, while 70 percent are eyeing having a fully interoperable hybrid or multi-cloud infrastructure and 69 percent are looking to migrate as many workloads as possible to the public cloud, IDC found.

When it comes to planning, it should be no surprise that higher performing IT modernization groups take a strategic view to mitigating business risks, cost concerns, or security constraints. Lower achieving IT modernization groups, on the other hand, or more apt to tackle these on a tactical, project-specific basis, IDC says.

As AI projects loom, the higher performing IT modernization groups are upskilling their in-house developers and investing in AI copilots, DevOps, containerization, improving data pipelines, and adopting SaaS versions of packaged apps. The lower performing IT modernization groups, on the other hand, have less interest in improving data quality or implementing DevOps practices. Instead, IDC says they’re “primarily focused on maintaining existing in-house code and ISV software.” Even the lower performing IT modernization groups, however, are investing in AI copilots (isn’t everyone now?)

Fig 3. Higher performing IT shops plan to expand headcount, not shrink it.

The differences in investments in data management stand out. “Some 81 percent of experts prioritize improving data quality, as they recognize that having high-quality, consistent data available across the organization is mission-critical to enabling data-driven decision-making and helping their organization to fully exploit data-intensive AI-enabled opportunities,” IDC says. What’s more, 80 percent of the top performing IT modernization groups prioritize creating and maintaining a complete inventory of all data assets while 78 percent are favoring data centralization, usually in the cloud.

But many of the least mature IT modernization explorers are just beginning to consider data management, IDC says. As the current wave of AI builds, those who have invested in data management will be better positioned to capitalize on it, IDC points out.

Cybersecurity is another area where the top-performing organizations have a leg up on their less-sophisticated counterparts. “Experts also recognized that they need to start planning for quantum-resistant cryptography and fully protect in-flight, in-use, and at-rest data using software- and hardware-based strategies, including confidential computing,” IDC says.

When it comes to people and processes, there’s a clear distinction between the top-ranked modernization groups and those at the bottom. Among the areas that the higher ranked groups are investing in training are AI infrastructure configuration and operations, cybersecurity and resilience, and datacenter facilities design and sustainability.

“They understand that having appropriate in-house knowledge about AI infrastructure and development technologies and best practices will be critical to making the best possible decisions about how to evolve the organization’s overall IT outlook and its ability to cost-effectively extract the full value out of its IT investments,” IDC says.

“Modernization maturity isn’t just about technology adoption – it’s about the ability to adapt, scale, and deliver measurable business value despite ongoing challenges,” said Mary Johnston Turner, an IDC Research vice president and co-author of the report. “Organizations that are modernizing holistically across all six pillars are navigating cybersecurity risks, data silos, and technical debt more effectively, enabling them to sustain faster innovation and stronger performance over time.”

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