This article was based on the interview with Pega’s Matt Healy on the hidden costs of outdated technology by Greg Kihlström, AI and MarTech keynote speaker for The Agile Brand with Greg Kihlström podcast. Listen to the original episode here:
As marketing leaders, our focus is relentlessly forward-looking. We are charting the course for AI-powered personalization, orchestrating complex omnichannel journeys, and seeking the next competitive edge in a landscape that redefines itself quarterly. The pressure to innovate is immense, and the allure of generative AI and autonomous systems is understandably captivating. We convene strategy sessions, approve ambitious roadmaps, and evangelize a future where technology enables seamless, intelligent customer engagement. Yet, for many of our teams on the ground, this vision is a distant mirage. They are not piloting starships; they are wrestling with the digital equivalent of a steam engine, trapped in workflows dictated by systems built before the modern internet existed.
This disconnect between strategic ambition and operational reality is more than an inconvenience; it’s a critical business risk that we can no longer afford to delegate solely to our colleagues in IT. The technical debt accrued over decades is now coming due, with interest. New research from Pega confirms what many of us have suspected: outdated, clunky technology is a primary source of employee frustration, a drain on productivity, and a significant driver of talent attrition. While we chase the horizon of AI-driven transformation, the very foundation of our operations is eroding beneath our feet. To truly unlock the future, we must first have the courage to dismantle the past.
AI Has Turned Modernization From a “Nice-to-Have” to a “Need-to-Do”
The conversation around retiring legacy systems is not new. For years, it’s been framed in terms of IT overhead, maintenance costs, and a slow march toward the cloud. These arguments, while valid, often lacked the C-suite-level urgency to displace other priorities. According to Matt Healy of Pega, the proliferation of AI has fundamentally changed the calculus, transforming modernization from a long-term goal into an immediate strategic imperative. The very data needed to fuel sophisticated AI models is often locked away in these archaic systems, rendering our most ambitious plans inert before they can even begin.
“If your data is trapped in on-prem databases, or it’s trapped in proprietary data structures… you’re just unable to unlock the sort of fuel that you need to power AI-driven transformation now. So there’s all the same imperatives around getting off of legacy systems that have always been there—customer experience, automation, overall cost and maintenance—and now this just adds more fuel to the fire.”
Healy’s point cuts to the core of the issue for marketing leaders. We can invest in the most advanced customer data platforms and AI decisioning engines on the market, but if critical customer history, transaction data, or service interactions are sequestered in a 30-year-old mainframe, our models are flying blind. This isn’t just about efficiency anymore; it’s about competitive viability. The brands that can effectively harness their enterprise-wide data for AI will win. Those that can’t will be left wondering why their expensive new AI initiatives are failing to deliver. The anchor of legacy tech is no longer just slowing the ship down; it’s preventing it from leaving the harbor.
The Human Cost of Outdated Technology
We often talk about the importance of employee experience (EX) as a precursor to great customer experience (CX). Yet, we rarely connect the dots between EX and the daily software our teams are forced to use. The Pega research highlights a startling reality: over a third of employees would consider leaving their jobs due to poor technology. This isn’t about a preference for a slicker UI; it’s about the daily, soul-crushing friction of navigating labyrinthine systems that hinder their ability to do good work. As leaders, we must reframe this from an “IT issue” to a fundamental talent and culture crisis.
“Everyone talks about how the expectations of consumers have shifted… The funny thing that maybe comes up less is like, those consumers also work somewhere… So when I come into work and then I log in to a terminal-based mainframe application, that’s just completely disconnected from my life outside of work. And having to make that shift… is just jarring.”
Healy’s observation is a powerful reminder that our employees are also modern consumers. They manage their finances, book travel, and run their lives on intuitive, seamless digital platforms. To then ask them to spend eight hours a day toggling between a dozen non-integrated, command-line-era applications is not just inefficient, it’s demoralizing. The research found that nearly half of employees feel their tech stack prevents them from doing their best work. This creates a perpetual state of unfulfillment that leads directly to burnout and turnover, especially among high-performing, digitally native talent. The cost of recruiting, hiring, and training their replacements often far exceeds the perceived cost of a system upgrade.
AI as the Accelerator, Not Just the Destination
Perhaps the most significant shift in the modernization conversation is that AI is no longer just the reason to modernize; it is now the means by which we can modernize at unprecedented speed. The specter of multi-year, multi-million-dollar “rip and replace” projects has haunted boardrooms for decades, often paralyzing any real progress. CFOs hear “modernization” and see a massive cost center with a questionable, far-off ROI. However, AI-powered tools are now capable of dramatically collapsing those timelines and costs, fundamentally rewriting the business case.
“[A client] tried this about a couple years ago, and we had SIs come in and give us quotes. And they came in and they were like, ‘Hey, this is going to cost you $25 million and the project is going to take seven years.’ And this was pre-AI. And now with the AI-driven approaches, he was able to get from COBOL to a working application in the cloud for their disability claims in 90 days.”
This example, shared by Healy, is not hyperbole; it is the new reality. AI can now analyze legacy source code, map complex business processes, and even generate new, optimized applications in a fraction of the time it would take a team of human developers. This changes everything for leaders building a business case. The denominator in the ROI calculation has been slashed. Projects that were once non-starters due to prohibitive timelines and costs are now eminently achievable. This allows us to move from a defensive position of “reducing maintenance costs” to an offensive one of “unlocking new revenue and productivity” within a fiscal year, not a decade.
Ultimately, the journey away from legacy technology is a journey toward unleashing human potential. By removing the daily friction and cognitive load imposed by outdated systems, we are not just improving operational metrics. We are creating an environment where our teams can focus on what they were hired to do: think strategically, solve complex customer problems, and innovate. The goal isn’t just to replace an old system with a new one; it’s to create a technology ecosystem that acts as a partner to our employees, not an obstacle. As AI handles more of the repetitive, process-driven work, the value of human ingenuity, empathy, and judgment will only increase.
As we look to the future, the challenge for leaders will be to thoughtfully orchestrate this partnership between human and machine. It will require us to move beyond simply automating tasks and toward augmenting our teams’ capabilities. The most successful brands will be those that use technology to empower their people, freeing them to deliver the nuanced, high-value “human touch” in the moments that matter most to customers. The path to this future, however, begins with a clear-eyed assessment of the present. And for many of us, that means finally addressing the legacy systems that are holding both our people and our progress captive.
