Most in hospitality and travel have been slow to modernize key applications including customer resource management (CRM), enterprise resource planning (ERP) and human resources (HR) systems. In fact, 76% of them agree they will only benefit from AI if they modernize legacy apps and data, according to a new Rackspace Technology/AWS survey of 1,420 global IT leaders across industries.
Although travel/hospitality respondents identify increased security (59%), improved efficiency (50%) and increased cost reduction (48%) as the leading motivators of modernization – and ERP, CRM, and HR as the apps that most need upgrading – organizations are still dragging their feet on updating legacy infrastructure. Of legacy infrastructure, only half (52%) can be modernized, industry IT decision-makers note with 50% saying they have been in the cloud between 1-10 years.
Who Is Leading Modernization at Travel/Hospitality Companies?
Overwhelmingly, modernization initiatives are led by IT departments (65%) and executive leadership/C-suite (46%).
The Benefits & Challenges of Modernization
When hospitality/travel IT executives were asked to identify the top expected outcomes of modernizing, security, cost savings and efficiency led the way, followed by speed, ability to adopt advanced technologies, customization and innovation. Respondents also noted that modernization has resulted in better data management, integration, quality, and lowered data costs.
The most critical apps and data to modernize are enterprise, CRM, HR, bespoke apps, business intelligence, data storage, content management, data analytics, governance and security and data integration.
However, many insurers still face unforeseen challenges to modernization, including limited resources, cultures resistant to change, integration challenges, lack of senior buy-in, lack of a clear roadmap and communication between stakeholders.
If insurers fail to modernize legacy apps and data systems, respondents believe it will result in increased costs, inability to adopt advanced technologies, lack of innovation, poor security, reduced speed/agility and integration barriers in that order.
“Travel/hospitality companies 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.”
Coinciding with the results of Rackspace’s Cloud Modernization survey Rackspace Technology recently announced Foundry by Generative AI by Rackspace (FAIR), a global practice dedicated to accelerating the secure, responsible, and sustainable adoption of generative AI solutions across industries. FAIR aims to aid in many of the problems respondents shared, including accelerating the pragmatic and secure adoption of generative AI.
Commissioned by Rackspace Technology and supported by AWS, the survey was 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 manufacturing, digital native/technology, financial services, retail, government/public sector, and healthcare sectors in the Americas, Europe, Asia and the Middle East.