John Cotterell, CEO of Endava, stated, “To navigate fast-changing markets in the era of AI, companies must modernize their core systems and address outdated legacy structures. Core modernization is a foundational step in advancing towards AI-driven business transformation. Our research shows that businesses are eager to invest in AI.
However, addressing existing systems through internal modernization, new technology investments or partner network diversification is a critical first step in this process.
Cotterell added, “It’s encouraging to see industry leaders recognizing this value. As AI becomes increasingly ubiquitous, core modernization will remain a key enabler of success in the digital era.”
Digital transformation is crucial for the evolution of the energy sector, with legacy technology unlikely to hinder progress thanks to the potential benefits of artificial intelligence (AI). This is the primary finding of a new study by Eaton.
The survey, which explored digital transformation within utilities, data centers, buildings, and manufacturing sectors, indicated that digital strategies are being rapidly developed across all these fields. Fewer than one-quarter of the companies surveyed consider legacy technologies a barrier to digitalization, a significant drop from one-third in 2022. New AI and machine learning (ML) applications, credited with reshaping industries, are behind this shifting perspective.
This research shows how urgently businesses want to implement digital technologies that deliver the benefits of AI and ML,” said Mark Roces, vice president of digital offer management at Eaton. Roces highlighted the role of the data center sector as fundamental to this transition, as other sectors depend on it to support their AI initiatives. The report, which included input from leaders in North America, Europe, and the Middle East, found that utilities face significant pressure.
Over half of the respondents pointed to outdated infrastructure as their main issue. They anticipate a substantial increase in grid capacity requirements over the next decade—some as much as 100%—due to the electrification of transport and industry, population growth, and climate change.
Core systems modernization critical for AI
Grid stability, renewables integration, electric vehicle charging, and load shedding were pinpointed as top operational challenges. Energy storage emerged as a significant concern, particularly in Eastern Europe. From an organizational standpoint, changing business models driven by smart meters, more sophisticated customers, and the transition to performance-based regulation were identified as significant challenges.
Regional challenges were noted, such as regulatory inconsistencies in North America and the siloed nature of organizations in the Middle East. Given the increasing demand, utilities must expand their power supply and grid capacity. Traditional solutions like adding renewable capacity and energy storage can take years.
Therefore, digitalization is viewed as critical to expanding grid capacity efficiently. Utilities expect digital solutions to increase load capacity by a quarter through enhanced capacity forecasting and management, demand response, outage detection, predictive maintenance, and vegetation analysis. “In each of these cases, data-driven insights can help utilities significantly stretch current grid capacity, enabling them to match supply and demand better, anticipate and forestall outages, and more proactively maintain critical equipment.”
The survey also revealed that data centers, manufacturers, and building operators are scaling up to meet growing demands.
Nearly half of the data centers are focusing on facility upgrades, while one-third are expanding capacity and improving IT asset performance utilization. Manufacturers see AI as a tool to facilitate decarbonization and enhance their environmental, sustainability, and governance scores. Over half invest in electrical energy monitoring and optimization, digital twins, and predictive maintenance applications.
Similarly, building operators are committed to digital transformation to achieve sustainability goals. Over 50% plan to install building management systems within the next year to optimize energy use, with two-thirds viewing AI as a future asset for predicting space utilization.
