Kyndryl Study: Mainframe Projects Triple Investment Returns

Mainframe modernisation projects now deliver returns of between 288% and 362% on investment, according to research published by Kyndryl. 

The technology services provider’s third annual State of Mainframe Modernization Survey questioned 500 business and IT leaders about their infrastructure strategies and found that costs have decreased whilst returns have increased across different modernisation approaches.

The study indicates that 80% of organisations have altered their mainframe modernisation strategies within the past year. These changes respond to market dynamics, geopolitical developments, regulatory requirements and emerging technologies.

“The mainframe has become the AI-fueled catalyst of hybrid enterprise strategies, delivering billion-dollar returns while powering innovation for customers,” says Hassan Zamat, Global Practice Leader for Core Enterprise at Kyndryl. “Organisations are taking a much more pragmatic approach to modernisation to drive better business outcomes and incorporate new technologies.”

The research reveals that modernisation costs vary depending on the chosen approach. Projects that modernise applications on existing mainframe infrastructure, integrate with cloud platforms or migrate workloads to alternative systems each produce different ROI calculations within the reported range.

Kyndryl survey finds AI implementation accelerating across mainframe environments

The survey identifies a shift in how enterprises view AI deployment on mainframe systems. Nearly 90% of responding organisations have either implemented or plan to implement generative AI on their mainframe infrastructure. This represents a movement from considering AI as a future technology to treating it as an immediate business tool.

Respondents project that AI and generative AI technologies will generate collective savings of US$13bn over the next three years. The same organisations forecast US$20bn in new revenues from these implementations during the same period. These figures suggest that enterprises see AI as both a cost reduction mechanism and a revenue generation opportunity.

The technology also addresses workforce challenges that have historically affected mainframe operations. Skills shortages in mainframe expertise have created operational risks for organisations dependent on these systems. The survey indicates that AI implementations help mitigate these gaps by augmenting existing workforce capabilities.

More than half of surveyed organisations reported increased mainframe usage over the past year. This contradicts industry assumptions about mainframe decline and suggests that enterprises are discovering new applications for these systems within hybrid IT architectures. The increased usage correlates with the integration of AI capabilities and the platform's role in supporting distributed computing environments.

Mainframe modernisation projects face talent and regulatory pressures

Workforce challenges remain significant barriers to modernisation success. The survey found that 70% of organisations struggle to recruit personnel with the required combination of mainframe expertise and emerging technology skills. This skills gap affects project timelines and implementation strategies across the sector.

Third-party support continues to play a role in modernisation efforts. According to the research, 74% of organisations rely on external providers to support their modernisation initiatives. This dependence reflects both the specialised nature of mainframe systems and the shortage of internal expertise capable of managing complex transformation projects.

Regulatory compliance influences modernisation planning for 94% of survey respondents. These requirements shape technology choices and implementation approaches, particularly in sectors such as financial services, healthcare and government where data protection and operational resilience standards are stringent.

Security considerations remain central to modernisation decision-making processes. The survey identifies security as a foundational concern that affects technology selection, implementation timelines and operational procedures. Enterprises must balance modernisation objectives with security requirements whilst maintaining system performance and availability.

The research suggests that successful modernisation requires partnerships between enterprises and technology providers with expertise across both traditional mainframe environments and emerging technologies. These relationships enable organisations to navigate technical complexity whilst accessing specialised skills that may not be available internally.

“Working with the right partners can help them build a resilient and future-ready platform,” Hassan says.