Tech debt hinders growth for communication providers, warns Accenture
DUBLIN, IRELAND — A staggering 66% of communication service providers (CSPs) are grappling with the consequences of their technological debt, which is impeding growth and inflating IT costs, revealed IT giant Accenture.
The study, which surveyed over 250 CSP executives, found that less than 7% were fully satisfied with the returns on their IT modernization efforts over the past three years.
The average CSP’s tech debt, which is the cost of outdated IT systems, stood at 56% of total IT costs in 2023. This legacy burden is not only a drag on productivity but also stifles innovation.
CSPs have historically adapted their IT systems to accommodate new business models, architectures, and acquisitions. However, this has led to increased complexity and compounded tech debt, often without delivering the expected business value.
The study underscores the urgency for CSPs to overhaul their IT infrastructure. Companies with lower tech debt have outperformed their peers, with expectations of continued superior revenue growth from 2024 to 2026 (5.3% vs. 4.4%).
Meanwhile, 84% of CSP executives acknowledge that missing out on IT transformation will lead to lost growth opportunities. Yet, there is a disconnect between recognizing the importance of modern IT practices, such as Cloud First infrastructure, and actual implementation—only 26% of CSPs follow advanced practices that enable scalability and agility.
The report suggests that by reducing tech debt and modernizing IT systems, CSPs can transform IT from a cost center to an innovation catalyst.
Embracing cloud, data and AI, open architectures, and interoperability is crucial for operational excellence, personalized customer engagement, and faster time-to-market for new services.
Despite the challenges, some leaders are making strides toward modern IT systems. Companies at the forefront of technological advancement have reported more cost-efficient operations and are setting ambitious goals for agility in the coming years.
