In an era defined by rapid technological advancement, businesses must continuously adapt to remain competitive. Evolving technologies like artificial intelligence (AI), automation, and enhanced cybersecurity protocols are reshaping industries. Companies that embrace these changes are unlocking new efficiencies, improving customer relationships, and strengthening their market position.
However, organisations still relying on outdated business systems face challenges in scalability, security, and operational efficiency. Business leaders must prioritise business system transformation to future-proof their operations and stay ahead of industry shifts.
Organisations that still rely on legacy systems are hindering their growth, preventing themselves from fully harnessing the potential of new digital tools. Over a third of business leaders identified system upgrades as a critical priority in 2025, recognising that outdated infrastructure can limit innovation, pose security risks, and increase costs.
With cyber attackers growing more sophisticated, nearly 50% of technology leaders identified cybersecurity as their top concern for 2025. Legacy systems often lack modern security measures, leaving businesses vulnerable to breaches. Investing in up-to-date business systems with advanced security protocols reduces these risks while protecting customer data.
Incidents such as the cyber-attack on M&S that led to millions of pounds in losses underscore the importance of protecting your IT infrastructure against cyber threats. Not only did the attack cost them financially, but it also dramatically damaged their customer loyalty, with 25% – 32% saying they would shop elsewhere directly because of the recent cyber-attack.
Outdated systems struggle to integrate with modern tools, limiting automation and slowing down operations. Many businesses relying on old software experience delays in processing tasks, leading to reduced scalability and missed revenue opportunities. Investing in upgraded systems not only enhances efficiency but also improves resource effectiveness and allows organisations to remain agile in fast-changing markets.
Ghan Varsani, ERP Programme Director, with 30 years of experience in this sector, explained that “AI offers businesses an exceptional opportunity to grow; however, organisations relying on outdated legacy systems will miss out on this growth opportunity as their current systems simply will not be able to cope with AI technologies.” Not only does this demonstrate the ability of businesses to increase overall efficiency, but it also demonstrates the competitive advantage that they could miss out on if they fail to modernise their systems.
Legacy systems often lead to escalating operational costs due to frequent bug fixes, expensive maintenance, and inefficient workflows. A well-executed business systems transformation can reduce overhead expenses by automating repetitive tasks and improving cross-system integration.
Additionally, security vulnerabilities in outdated systems can lead to costly data breaches, making upfront investment in modern systems essential in the long run. Ghan agrees with this by stating, “Transformation can equally bring down cost and risk within an organisation. Especially when it comes to AI. AI can help optimise processes and, in many cases, when it comes to aspects that are more hidden, or not visible to the human eye”.
By adopting AI and automation, organisations can uncover new ways to cut overheads and improve profitability. If outdated systems are ignored, as newer technologies advance rapidly, the gap only widens. So, not only does this make future transformation more complex and costly, but businesses that delay modernisation risk becoming less competitive, less secure and losing stakeholder confidence.
While the challenges are significant, the solutions are equally promising. The key lies in embracing agile, digital-first technologies that empower businesses to move faster, operate smarter, and remain competitive.
AI enables businesses to analyse customer data in real-time, offering insights that drive targeted marketing strategies and optimise decision-making. Predictive analytics allows businesses to anticipate consumer behaviour, enhancing customer relationships and business growth.
In some sectors, such as HR, we are already seeing a shift. Ghan states, “the HR function is open to adopting AI and new technologies as it helps drive accuracy and effective record keeping”. Gartner qualifies this by reporting that 76% of HR leaders expect to fall behind if their organisation doesn’t adopt AI in the next year or two. Other sectors, such as banking, pharma and insurance, are moving forward more slowly, taking a heavier focus on perfecting their technology and protecting intellectual property before putting it into practice.
Automation has become essential for business optimisation. It streamlines processes, reduces manual workloads, and enhances customer experiences. From chatbots to email automation and predictive reporting, AI-powered automation helps employees focus on strategic innovation while ensuring seamless business operations.
Notably, 74% of automation users report increased efficiency, demonstrating the value of integrating automated tools into business systems.
However, the adoption of automation is not without friction/resistance. Ghan expresses, “there’s fear of taking jobs. AI isn’t always seen as a tool for efficiency; it’s seen as something that reduces headcount. In many cases this isn’t always the case”. This element of cultural resistance is often the biggest challenge that transformations face.
Therefore, overcoming this resistance is a crucial task which requires transparency, communication, leadership support and investment in change management, so that the change is understood across the whole organisation, not just at the top. “You can build the greatest car, but if you don’t have the best driver, you can’t exploit its benefits,” Ghan offers. In other words, the best technology only succeeds in driving results when people are empowered and equipped to use it.
AI-driven data analysis allows businesses to extract insights faster than ever before. Many HR professionals are now leveraging sentiment analysis to gauge employee experiences, helping reduce turnover and foster a motivated workforce. More broadly across organisations, advanced analytics is allowing them to gain insight into performance, customer behaviour and operational risks.
This visibility is particularly important for Enterprise Resource Planning (ERP) systems, which are rapidly evolving. “ERP companies are investing heavily in their products,” says Ghan. “There’s a huge opportunity for companies to get ahead. If they don’t react, they’ll be left behind”.
Much like the introduction and boom of the internet age, the current wave of transformation represents a pivotal moment. Those who get on the front foot can establish a significant competitive edge.
To stay competitive in 2025 and beyond, organisations must embrace continuous learning and strategic investments in digital transformation. AI, automation, and cybersecurity advancements are reshaping industries, and companies that fail to modernise risk falling behind.
Organisations must promote and ensure continuous learning and adaptability. Ghan states, “There’s conflicting information and education out there. Leaders are waiting to see where the technology develops first before investing, but the ones who are adopting now will be ahead”. Transformation isn’t just about tools; it’s about a cultural shift and adoption of a different mindset.
Ghan summarises, “This is a massive generational opportunity”. Businesses that act decisively and strategically will be the ones shaping and leading the future of their industries.
For a deeper dive into business transformation strategies, check out BIE’s Business Transformation Guide.
