- research report
The Role of IoT in Urban Development
Reinvention-ready organizations that have developed Intelligent Operations are 3.3x more likely to have successfully scaled high-value gen AI use cases and report 2.5x higher revenue growth.
- 7 March 2025
- 20 Minute read
Key Sections of the Report
- Artificial Intelligence Evolution: The rise of explainable AI and its integration into everyday life.
- Sustainability in Focus: Green technologies and circular economies gaining traction.
- The Future of Work: Hybrid work models and the role of automation in the workplace.
- Digital Transformation:How 5G and edge computing are redefining connectivity
Key Sections of the Report
- Artificial Intelligence Evolution: The rise of explainable AI and its integration into everyday life.
- Sustainability in Focus: Green technologies and circular economies gaining traction.
- The Future of Work: Hybrid work models and the role of automation in the workplace.
- Digital Transformation:How 5G and edge computing are redefining connectivity
Trends, innovations and insights you need to know about
The rapid adoption of generative AI and other emerging technologies is leading to a surge in new technical debt. Generative AI and AI are now the highest contributors to a company’s tech debt along with enterprise applications, according to our digital core research. This trend will likely exacerbate: in our Pulse of Change survey, 52% of organizations said they plan to allocate more funds toward generative AI, heading into 2025.
Generative AI is leading to a classic catch-22. On the one hand, it has the potential to create new technical debt. On the other, when used appropriately, generative AI can help manage tech debt remediation as well as minimize tech debt creation.
Balancing investment with innovation
AI is just part of the tech debt picture. In the US alone, tech debt costs $2.41 trillion a year, according to a 2022 report, and would require $1.52 trillion to fix. In our digital core report, we explored how companies can use their critical technology capability to thrive through change. That research revealed that leading companies balance tech debt liabilities with investments for the future, targeting 15% of IT budgets, using programmatic and autonomous methods.
For chief information and technology officers, this means deliberately investing in the parts of the digital core that are critical to their corporate strategy while being proactive, structured and data-driven in how they identify, measure, prioritize and remediate such debt.
30%
Accelerate timelines with modular construction for reduced environmental impact
70%
Adopt green building certifications for eco-friendly construction.
$50T
Leverage nature-based solutions for flood and climate resilience
Balancing—not eliminating—tech debt is key to reinventing with a digital core
One thing we don’t recommend is trying to eliminate your tech debt entirely. A degree of tech debt is healthy for the balance sheet as it’s often an unavoidable cost of innovation and agility. But too much of it can hinder progress.
Throwing too much money at tech debt can also be counterproductive. Our analysis found there is an inverse U-shaped relationship between a company’s digital core maturity and technical debt remediation. Using more of the IT budget to pay down tech debt only improves digital core maturity to a certain point. Beyond this peak, it indicates that a company is over-indexing investments in technical debt and not building their digital core capability effectively and efficiently.
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