How can CIOs turn ERP modernisation into value with 40% of apps still on legacy?

CIO Edge gathered 180+ tech leaders to explore strategies, real-world examples, and barriers in aligning platforms, people, and performance for the next era of IT leadership.

Technology leaders face mounting pressure to modernise core systems while proving early returns from AI adoption.

ADAPT’s 28th CIO Edge gathered more than 180 CIOs and IT executives, together responsible for technology strategies shaping a third of national prosperity and supporting millions of workers.

The discussions reflected three urgent priorities.

Leaders are redesigning platforms to be reusable business assets rather than fragmented estates.

They are investing in their people, reshaping operating models, and closing capability gaps that block execution.

And they are under pressure to show performance, with half expecting ROI inside 12 months of a major IT rollout.

ERP modernisation has risen to the top of the agenda, yet 40% of mission-critical applications still run on legacy platforms.

At the same time, 74% of leaders plan to invest in AI agents within a year.

CIO Edge 2025 was built around this inflection point.

Leaders from Westpac, ANZ, the Department of Defence, Telstra, Lendi Group, McKinsey & Company, and more explored how to reduce complexity, scale reusable platforms, and operationalise AI in ways that deliver measurable outcomes.

Redesign platforms to deliver value at scale

The question is no longer whether to modernise, but how to extract value once modernisation is underway.

ERP is now the top CIO priority, yet brittle estates and fragmented systems still undermine delivery.

Gabby Fredkin, Head of Analytics and Insights at ADAPT, noted that CIOs are concentrating spend on ERP as the pathway to simplification, but warned that duplication and silos remain entrenched.

MIT CISR Chairman and ADAPT Senior Advisor Peter Weill added that reusable platforms are the strongest predictor of profitability and innovation, shifting value away from projects and into enduring business assets.

This shift is already playing out in financial services.

ANZ Divisional CIO Peter Barrass described how the bank turned its payments systems into a platform now leveraged across institutional, retail, and even external clients.

By managing it as a product with clear governance, ANZ reduced duplication, accelerated innovation, and created new revenue lines.

These examples show why platforms designed for reuse rather than customisation are becoming the critical lever for ROI.

Without that discipline, ERP modernisation risks adding cost without generating performance.

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Align people and culture to cut through complexity

If platforms are the foundation, people and operating models determine whether modernisation gains traction.

CIOs know simplification is central, but few believe it will define their leadership legacy, only 13% say ERP delivery will.

That gap reflects the cultural and structural barriers slowing execution.

Loren Somerville, CIO at The Lottery Corporation, explained how developers are empowered to identify friction points, feeding directly into simplification agendas.

By blending ground-up problem discovery with executive sponsorship, her teams reduce bottlenecks that often stall delivery.

Westpac CTO David Walker translated technical debt into commercial impact, showing that every dollar of change cost an extra 70 cents due to duplication.

He secured board alignment by framing simplification as a financial drag, then introduced the BEAD framework—Built for change, Evergreen, Automated, Digital to the core—to give executives a common language for measuring progress.

For Chris Crozier, CIO at the Department of Defence, complexity is both an efficiency issue and a national security risk.

Defence is consolidating stovepiped Army, Navy, and Air Force systems into enterprise-wide platforms, enabling shared visibility and faster response in contested environments.

CIOs who translate complexity into financial, operational, or national resilience risks are finding stronger momentum for change.

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Prove AI and ERP investments through early performance

While ERP modernisation dominates investment, AI is shaping the boardroom agenda.

74% of CIOs intend to fund AI agents in the next 12 months, yet performance expectations are unforgiving: half of CIOs now expect ROI within a year.

The execution gap between pilots and enterprise value is widening.

Dave Hyman, CEO of Lendi Group, said AI is embedded across the property journey, from customer search to mortgage monitoring.

Every interaction is supported by agents with guardrails, ensuring both compliance and efficiency.

This shows how AI can move from pilots to operational outcomes when tied to defined use cases.

McKinsey Digital Leader Jessica Eyes urged CIOs to reframe ERP and cloud transformations as commercial bets rather than technology projects.

She warned that customisation, vendor dependence, and adoption failures cause value leakage.

CIOs must measure outcomes in revenue uplift, resilience, and risk reduction, instead of just on-time go-lives.

Telstra’s Group Owner of Strategy and Transformation Nathan Gumley, along with Technology Engagement Advancement Executive for Global Networks and Technology Channa Seneviratne, reinforced that performance is as much about orchestration as it is about innovation.

With more than 100 million daily network events, Telstra applies AI to predict faults, self-heal, and dynamically allocate capacity.

By exposing network APIs, they are enabling premium connectivity at stadium events and providing banks with fraud detection signals directly from the network layer.

Performance is being defined not by technology deployment but by the measurable impact it creates within tight ROI windows.

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Strengthen resilience and close the adoption gap

As AI adoption and ERP modernisation expand the technology footprint, resilience and adoption have become decisive factors.

Melissa Bischoping, Senior Director of Security and Product Design Research at Tanium, argued that vulnerability management must move beyond dashboards.

High-confidence automation can patch weaknesses as soon as they are detected, reducing risk and freeing skilled staff for higher-value work.

WalkMe’s Principal Customer Success Manager Matthew Barratt and Senior Solution Advisor Simon Carlson showed that adoption is often the last barrier to value.

They demonstrated how embedding guidance into workflows prevented payroll disruption in a government ERP rollout and enabled frontline staff in travel services to use AI without additional training.

Even well-designed platforms fail to deliver without embedded adoption.

Resilience today means more than system uptime.

It requires security, automation, and adoption working in tandem to ensure transformations translate into performance.

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What’s next for Australian CIOs?

CIOs are expected to modernise ERP systems, adopt AI agents, and simplify estates while proving measurable ROI inside 12 months. These pressures converge into a new operating model for leadership:

• Execute ERP modernisation with discipline – Avoid customisation traps and vendor overdependence. Success requires standardisation, co-ownership with the business, and ensuring ERP delivery enables frontline value rather than back-office plumbing.
• Operationalise AI agents with guardrails – Value depends on sequencing narrow use cases that directly drive revenue or resilience. AI must be embedded into workflows and measured against board-level outcomes.
• Drive simplification through cultural alignment – Developers, executives, and boards need a shared language and framework for measuring progress. Complexity should be tackled collectively, whether defined as financial drag, resilience risk, or operational friction.
• Embed resilience and adoption from the outset – Patching, automation, and user enablement cannot be afterthoughts. These determine whether major investments sustain their value or erode over time.

These priorities will shape the legacy of CIO leadership.

While only 13% see ERP modernisation as their defining contribution, impact will come from how leaders sequence bets, remove execution barriers, and prove returns quickly enough to sustain investment.

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CIO Edge made clear that Australian technology leaders are being asked to manage legacy risk, ERP modernisation, and AI adoption at the same time.

Success will hinge on how well they prioritise, remove duplication, and prove impact quickly enough to sustain investment.

Those who achieve this will move the discussion with boards from technology deployment to business outcomes, establishing a model of leadership defined by measurable performance.

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