The sprawling, costly mess of enterprise IT is no longer a secret. What once promised agility now often delivers a tangled web of legacy systems, shadow IT, and ballooning budgets. But a new report from the IBM Institute for Business Value (IBV) suggests that intelligent automation isn't just a nice-to-have; it's the only viable path to navigate the escalating 'Automation IT complexity' that threatens to derail digital transformation efforts.
According to IBM's survey of 680 IT leaders across 21 countries, the systems meant to power modern business are instead becoming its biggest bottleneck. Corporate IT spending has surged 50% since 2023, now consuming 9% of revenue, with two-thirds of that budget funneled into transformation. Yet, much of this investment struggles to deliver real value, bogged down by antiquated software, siloed data, and uncoordinated purchasing.
"AI isn’t the problem anymore, it’s the solution to its own complexity," states Jacob Dencik, IBM IBV’s Research Director and lead author. The challenge, he notes, is that most organizations haven't figured out how to harness it effectively.
Highly automated organizations, the study found, aren't just saving money; they're thriving. They reported a 10% increase in revenue, a 28% reduction in IT costs, 16% faster time-to-market, and a significant 36% drop in downtime costs from cybersecurity incidents. These aren't minor tweaks; these are fundamental shifts driven by AI-powered systems that monitor networks, fix code, and allocate resources in real-time, often without human intervention.
The Flywheel Effect of Intelligent Automation
IBM defines intelligent IT automation as the use of AI and machine learning to link processes across the enterprise, enabling systems to act autonomously based on what they learn. This creates a powerful "flywheel effect": better data and cloud strategies fuel smarter automation, which in turn strengthens those foundational strategies. The most advanced firms are already moving towards self-directed operations, where AI agents manage infrastructure, compliance, and security at scale.
The report highlights that complexity remains the primary hurdle. "Shadow IT" alone eats up an estimated 24% of total IT spending, translating to roughly $192 million annually for a $10 billion firm. Technical debt from legacy systems further exacerbates the issue, with three-quarters of executives expecting it to reach "high severity" by 2026. Automation, however, reverses this trend. Highly automated enterprises spend less overall, employing 90 IT staff per billion dollars of revenue compared to 140 for their less-automated counterparts. A key differentiator is cloud maturity; firms with 75% or more of their cloud migration complete are nine times more likely to be highly automated.
