Kristen Smith 
The federal government’s continued dependence on outdated information technology could undermine efforts to deploy artificial intelligence across agencies, said Nick Dunn, CEO of PCI Government Services, in an opinion piece Nextgov/FCW published Monday.
Modernizing legacy IT is no longer optional in the age of artificial intelligence. The Potomac Officers Club’s Artificial Intelligence Summit on March 19, 2026, will convene federal and industry leaders to explore how modernization, secure architectures and data readiness can unlock AI’s full potential across government. Register now to hear how agencies are overcoming digital debt and building the technological foundation for the next generation of mission-driven AI.
Dunn said that agencies face a “digital readiness debt” driven by the high costs of maintaining legacy systems, warning that this issue could be intensified by AI adoption rather than resolved by it.
What Challenge Does the Federal Government Face in AI Adoption?
The PCI-GS chief executive noted that agencies spend nearly 80 percent of their annual IT budgets maintaining aging systems, leaving limited resources for modernization. He described the practice as a “strategic readiness deficit” that increases cyber risk and weakens operational performance.
Dunn stressed that AI will not fix obsolete data architectures or fragmented workflows and pointed to the Department of Veterans Affairs’ troubled electronic health record modernization as an example of poor readiness ahead of technology implementation.
What Actions Does Dunn Recommend?
Dunn called on federal leaders to prioritize eliminating this digital debt through structural reforms in data management, procurement and security. His recommendations include:
- Prioritizing data readiness: Agencies should ensure mission data is authoritative and interoperable before integrating AI tools.
- Shifting to performance-based procurement: Contracts should focus on measurable outcomes and modular approaches rather than fixed deliverables.
- Establishing a security baseline: Zero trust frameworks and secure cloud architectures must serve as foundational elements to prevent AI systems from inheriting legacy vulnerabilities.
- Developing workforce skills: Agencies should close capability gaps in data engineering, cybersecurity and governance to manage AI operations effectively.
Why Must Agencies Act Quickly to Modernize?
The rise of AI-enabled threats from adversaries and new Office of Management and Budget policies requiring operational deployment of AI demand immediate modernization.
Dunn urged federal leaders to assess and reduce their digital debt honestly and strategically, calling the effort a national resilience imperative.
