Business executives have seen rapid developments in technology strategy over the past few years, with many exciting new opportunities in AI and automation. Despite this momentum, several issues remain top of mind. 

In our 2026 business and technology survey report, we gathered insights from East Tennessee executives across healthcare, manufacturing, professional services, finance, and other industries. Here’s what top executives named as their five biggest IT challenges—and how these concerns are shaping their priorities for the year ahead.

Tennessee executives face IT challenges such as lagging skill development, complex digital transformation, strict compliance demands, and the burden of outdated systems. Ongoing staffing shortages and difficulty retaining skilled talent add to the strain. TenHats helps overcome these obstacles through strategic IT management and expert support that keeps businesses secure, efficient, and ready for the future.

1. Skill Development Is Lagging Behind Technological Advances

A little over 44% of survey respondents cited skill development lagging behind technological advances as one of the biggest IT challenges in their organizations. Skill gaps create a structural bottleneck for IT because organizations cannot fully use the new tools they’ve invested in. 

When staff lack up-to-date skills in areas like AI, cloud infrastructure, and cybersecurity: 

• Implementations slow down 
• Error rates rise 
• Security risks increase 

All of this directly impacts reliability and trust. 

Educational programs and traditional training often move too slowly to reflect rapidly changing technologies, so even new hires arrive with only partial skill sets. Over time, this skills gap reduces innovation capacity, strains existing teams, and makes it harder to stay competitive in a market where faster adopters can move ahead.

2. Slow or Complex Digital Transformation Processes

Slow or complex digital transformation processes are another one of Tennessee executives’ biggest IT challenges, with 41% of company leaders agreeing that a slow digital transformation delays business objectives and increases cost. 

Prolonged projects tie up budgets and talent, making it harder to respond to: 

• Competitors 
• Customer demands 
• Emerging risks 

Complex transformations often require extra layers of coordination, approvals, and rework. This adds friction that frustrates business stakeholders and erodes trust in IT. 

When transformations drag on, requirements and technologies shift midstream, so solutions can be outdated by the time they launch. This creates technical debt instead of modernization, leaving IT leaders under pressure to justify investment with limited, late results.

3. Compliance Requirements and Regulatory Issues

37% of the executives we surveyed named compliance requirements and regulatory issues as regular IT challenges. Keeping up requires continuous monitoring of new laws, frequent policy updates, and complex technical controls. 

Yet doing so strains time, budget, and specialist capacity. Multinational organizations must reconcile overlapping or conflicting governments, such as differing U.S. state privacy laws, GDPR standards, and sector-specific rules. This increases legal risk and operational complexity. 

IT teams also have to provide detailed evidence, audit trails, and real‑time reporting from legacy systems, a task that is technically challenging and error‑prone. Failure to comply can lead to fines, enforcement actions, reputational damage, and personal liability for leaders. 

4. Managing Technical Debt and Legacy Systems

Additionally, 35% of executives say managing technical debt and legacy systems is an ongoing challenge. This is because technical debt and legacy systems quietly: 

• Drain resources 
• Limit agility 
• Increase risk

Legacy platforms are often brittle, poorly documented, and intertwined with critical processes, so even small changes can trigger outages or unexpected side effects. This makes modernization projects slow, expensive, and politically difficult to prioritize against visible new features the business wants. 

Technical debt also compounds. Many organizations lack clear visibility into how much technical debt they have, where it sits, and what its real business impact is, so they struggle to build a case for investing in remediation. As a result, IT leaders operate in a constant trade‑off between keeping old systems running and creating the capacity to innovate.

5. Staffing Shortages and Challenges in Recruiting or Retaining Skilled Employees

Finally, another big challenge facing Tennessee executives is staffing shortages and recruiting or retaining skilled employees. 35% of the organizations we surveyed see this as a major challenge because demand for specialized talent far outpaces supply, especially for roles in: 

• Cloud infrastructure
• Cybersecurity 
• Data
• AI

Open positions can take months to fill, while scarce experts often receive multiple offers and can command higher pay and flexibility. At the same time, rapid technology change shortens the “half‑life” of skills, so existing staff must constantly reskill or risk falling behind, which adds training cost and time pressure. 

High turnover and unfilled roles erode organizational knowledge, disrupt long‑term initiatives, and weaken security and reliability, leaving IT leaders stuck in a cycle of reacting instead of strategically planning.

TenHats Helps Tennessee Businesses with These Challenges

TenHats helps Tennessee executives tackle today’s biggest IT challenges by pairing deep expertise with local, enterprise‑grade support. When skill development lags behind technology, our experienced and diverse engineering team acts as an extension of your staff, providing knowledge in cloud, cybersecurity, and modern platforms without waiting on internal upskilling. 

As a Microsoft Direct Cloud Solution Provider, we can simplify slow or complex digital transformation initiatives, guiding: 

• Architecture 
• Migration 
• Application lifecycle management 

This ensures that projects move faster with less risk.

For compliance and regulatory pressure, we design and manage secure environments that align with industry standards while maintaining usability and uptime. Our managed services and business continuity planning reduce the operational drag of technical debt and aging systems by stabilizing, documenting, and incrementally modernizing critical infrastructure. 

At TenHats, we provide help desk support and a bench of cross‑industry engineers to help offset staffing shortages. This provides you with reliable coverage, burnout relief for in‑house teams, and access to specialized skills that are hard to recruit and retain on their own.