Nilekani flagged that the large enterprises have not updated themselves.
“They have a mainframe from 1960, a menu computer from 1980 and a LAN from the 2000s and all co-existing in silos,” he said.
That days are over. As a firm, you want to take full advantage of AI; you must fundamentally clean up, Nilekani noted.
He said everyone is currently dealing with the massive cleanup exercise, but the challenge is the financial drain.
Many large companies spend 60 to 80 per cent of their IT budget on maintaining systems, for which there is no business value. These companies wanted to flip it by spending 70 per cent to 80 per cent on new systems, but without the fundamental clean up, they were not able to invest in the new systems, Nilekani said.
He highlighted that many of the systems were designed before an era where online attacks did not exist, and so on, which has serious security breach issues.
Nilekani said the good news is that, because of the AI, we have the tools which will do modernisation faster, more quickly, and in a much more economical way.
“Fundamentally, accumulated tech debt over a decade must be paid; you have no other option to defer this,” he said.
