Reflections from Versent’s Modernisation Roundtable at Factor CIO Day

Reflections from Lachlan Wright, Head of Modernisation, Versent

We were at Factor’s CIO Day in Melbourne last week, sharing our perspectives and learning from Australia’s CIOs and technology leaders. I also had the pleasure of hosting a modernisation roundtable with leaders from banking, healthcare, government, and enterprise.

I went in assuming the conversation would fracture along sector lines and participants would spend the hour politely talking past each other. That is not what happened. The regulatory pressures were different and the blockers were nearly identical, and the blockers turned out to have very little to do with technology.

The blockers are cultural before they are technical

Almost every leader named the same first hurdle, and it was not a technical one, getting the business and IT to agree on the risk of standing still. In most organisations they do not agree, and being able to close this gap between the business and IT by tying modernisation outcomes to business value was a key indicator of success.

Culture came up more often than any technical constraint. Technology is moving faster than people can absorb it, and the people expected to absorb it are already stretched thin. The organisations making progress are driving it from the top, with KPIs and OKRs that give leaders something at stake.

The part that gets least attention is what happens after go-live. The old system still has to come out, and decommissioning is unglamorous work that rarely gets funded properly. That is one reason tech debt often survives a transformation programme.

Articulating the cost of inaction

Two phrases kept recurring and I underlined both in my notes: the cost of tech debt, and the cost of inaction.

CIOs are comfortable building a business case for new capability. They are less practised at quantifying what it costs to do nothing, which is often the number that moves a board. Foundations get talked about constantly but funded rarely, because weak foundations cost nothing visible until something breaks. Having a solid foundation and platform to build on is key to successful modernisation and AI adoption.

Data accessibility is the concrete version of this. If your data sits in tools your AI platforms cannot reach, every AI initiative you fund inherits that gap. One participant said content locked in their productivity tooling cannot be surfaced in their AI tool at all, which is an expensive thing to discover after you have bought the tool.

AI is taking up the oxygen

The most candid observation of the session was that AI is consuming enough attention and budget to crowd out any investigation of applications that are perceived to be working. Tech debt remediation and platform consolidation are landing in the too-hard basket.

Demand for modernisation is up while risk appetite has not moved. Boards want the outcomes of a modern estate without the disruption of building one.

About a third of the room said governance was a driver of their modernisation programme. One participant had an opposing view, that governance rarely drives modernisation. Total cost of ownership makes the case, risk forces the timing, and governance shapes how you go about it once the decision is already made.

The questions worth asking about embedded AI

As AI capability gets baked into every platform, the leaders in the room were asking sharper questions. What AI is embedded in the platforms we already run? Is it a frontier model from Anthropic or OpenAI, or something the vendor built themselves? Does the integration go direct to the provider, or through a platform we can observe and control?

Those answers determine your security posture and your vendor risk. If you cannot answer them for your top ten platforms, that is an exercise worth doing this quarter.

People risk is missing from the risk register

One story stuck with me: a critical piece of software maintained by a single person in their seventies. Key-person dependency on legacy systems is routinely left off the business case, and it is one of the few risks you cannot solve by spending more money.

Regulation adds urgency. In aged care, legislative reform is forcing modernisation on a timeline the sector did not choose. Others face internal deadlines that are just as tight, including one CFO who wants a new ERP inside nine months. The common thread is that multi-year change programmes no longer survive contact with the business. Breaking the work into months, with visible value at each step, is what gets funded now.

Boards want outcomes

Board conversations are now almost entirely about business outcomes, to the point where boards are being shielded from the technology conversation altogether. Tech debt discussions drove the move to cloud a decade ago and they are driving the modernisation theme now, but the framing has changed. “We need to replatform” does not land any more. “Here is what the business cannot do until we fix this, and here is what it costs us each quarter” does.

That is harder work for technology leaders, since it means translating architecture into outcomes rather than presenting it. The upside is that boards seem more receptive to a well-argued case for change than they have been in a while.

Where to from here

If I had to reduce the whole conversation to one instruction, it would be this: get fluent in the cost of inaction. Not the cost of the programme you want funded, which you can already argue for in your sleep, but the cost of the year you spend not doing it. Quantify your tech debt, your data accessibility gaps and your key-person dependencies in business terms, and get them in front of your board before an incident does it for you.

At Versent we help Australian organisations do that, assessing legacy estates and delivering modernisation programmes that ship value in months rather than years. If any of this sounds familiar, get in touch with our team to start the conversation.

Thanks to Factor and everyone who joined the roundtable for a generous and candid discussion.