Hello. This is Stanton Jones with a special edition of the Index Insider. Today we’re sharing our firm-wide predictions for 2026. You can read the analysis here.
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10 Predictions for 2026: AI at the Core of Enterprise Transformation
In 2025, firms had to dig deep to optimize costs in the face of so much business uncertainty. In 2026, they will invest those funds in transformation that allows AI-related pilots to drive real business results. These transformations will impact every part of the business and every layer of the technology stack.Here’s how ISG sees these dual mandates of cost optimization and business transformation playing out in 2026:
- Technology modernization will be board-level priority: Legacy systems and technical debt are becoming existential risks. In 2026, organizations will start to shift to modular, API-liberated architectures, transforming industry processes and extending existing core platforms.
- Low-quality data and lack of governance will hinder agentic AI adoption: Most enterprises aren’t ready for the agentic systems that can make and carry out decisions. Fragmented data and limited governance maturity will be the biggest hurdles.
- AI use cases will continue to proliferate, but scaling business benefits will prove challenging: Rising costs, weak P&L impact and low organizational readiness will slow AI's business impact. Companies will need better metrics and redesigned workflows in 2026 to capture full value.
- AI will disrupt industry-specific business functions: AI leaders will embed domain-trained models directly into industry-specific workflows, initially to reduce costs and later to improve operations.
- AI pricing chaos will continue, but clarity is on the horizon: Agentic AI is creating a pricing “black box” for buyers and providers. This will be the year for both sides to pilot autonomy-level pricing to better align value with increasingly autonomous work.
- Generative AI and quantum computing will converge: The combination of AI and quantum computing is creating a perfect storm for security teams. In 2026 enterprises will invest in talent and technology to counter this emerging risk.
- AI will push more – not fewer – workloads to the cloud: Enterprises are ramping cloud spend to support model training, streaming and edge inferencing. This will require tighter FinOps, greater capacity commitment and deeper platform partnerships.
- Enterprises will accelerate their SAP transformation: Enterprises will sprint to finish ECC-to-S/4HANA migrations in 2026, but complexity, data risk and talent shortages will heighten reliance on advisory and managed services.
- Digital sovereignty will accelerate the adoption of U.S.-based compliance-ready platforms: European firms are looking to tiered hybrid architectures to support greater compliance with regulations, but U.S. hyperscalers will continue to dominate sovereign cloud adoption.
- Global capability centers will proliferate despite disconnect with HQ: A widening gap between HQ cost goals and local GCC ambitions will trigger resets, with some GCCs scaling down and others scaling up.
About the author
Stanton Jones
Stanton helps enterprise technology leaders, IT service providers and buy- and sell-side professionals make sense of the global IT services sector. Stanton's weekly briefing - the Index Insider - is read by thousands of industry stakeholders each week.
