Modernize its mainframe heritage, an option often overlooked, in favor of tactical actions at the periphery of systems. We are nevertheless seeing that the market, faced with budgetary pressures, is taking the plunge and that an exit from the mainframe is now becoming more and more present.
The information system, of which the mainframe heritage is often the cornerstone, is under pressure, both in its development (“Change”) and in its operations (“Run”).
We note with most of our customers that tactical actions – which represent a substantial effort – have already been taken, but at the “peripheries” of mainframe systems: to extend their lifespans and serve digital use cases, without necessarily attack structurally at the heart of the systems.
The actions generally go through the implementation of layers of rich services on top of the mainframe systems, and by offloading (dumping of the data) towards a Data Platform to build a data-centric IS. A judicious approach to accelerate its digital transformation and deliver use cases for users, but a simple observation: not modernizing factories (with a very large mainframe footprint) puts pressure on the “Change” and “Run” of CIOs …
Indeed, the mainframe heritage, despite its robustness greatly hinders the ability to “Change” :
- These architectures, by nature monolithic and most often closely coupled with the rest of their ecosystems, generate growing complexity and a lack of flexibility;
- The total cost of making the changes available therefore increases as the costs of each of the information system architecture layers are added;
- As for the delivery rate of these systems, it is most often counted in quarters. And, while automation of delivery processes and agile are possible, these practices remain uncommon, even among industry leaders.
In the end, the pace of deliveries with strong functional content is “leveled down”, due to its dependence on the necessary changes in the mainframe.
This underlying trend is all the more crystallized in the face of the new challenges of hyper-personalization of financial products and interoperability with partners to create ever more innovative value propositions. Because it is difficult for the mainframe:
- To enrich the data of the company to restore it is often a “core business” process.
- To set up a Lean approach to integrate and integrate into a partner ecosystem, due to the lack of connectivity, modularity, and the necessary parameterization capacity.
Regarding the “Run” budgets, the share of the mainframe is growing continuously.
- The mainframe portfolio is a system that is still alive and well, the technical debt of which continues to grow as a business and regulatory changes pile up …
- The development of digital is also pushing to an over-solicitation of mainframe systems and therefore to the growth of MIPS.
- To keep Run’s budgets afloat, several market players are degrading their quality of service.
And if for a long time, negotiating contracts was the solution to control costs, this lever has often been exhausted. The subject has become a question of architecture and technological obsolescence.
Re-platformization and the Cloud, major allies to regain control of its mainframe heritage.
Most companies share these findings of their mainframe heritage, but it is so structural and critical that many don’t know how to tackle it or where to start. Proven and progressive methods make it possible to generate significant savings, without a “big reboot”, while addressing the inherent risks.
For example, Accenture has helped a major public service player providing social benefits, to modernize its mainframe heritage through total re-platformization. For a portfolio of around 20 million lines of code spread over 2 mainframes and totaling 55,000 MIPS, the savings made on the total cost of ownership (TCO) exceeded 80%, with a secure return on investment from the 3rd year.
We are currently supporting our clients in Europe in large-scale programs to modernize their mainframe assets and we are seeing an acceleration in there-platformization project market: the “momentum” is there.
This approach consists of taking a first step outside the mainframe by implementing virtualization of the Z / Os operating system on an x86 platform, without changing the COBOL code. This allows us to desensitize ourselves from the technology and rethink our operating model on a cloud (private or public).
This modernization alone makes it possible to generate savings in the total cost of ownership (TCO) of around 40% on a volume of several thousand MIPS. These savings on the run than being reinvested to gradually transform the strategic areas towards a Cloud Native architecture: decouple and rewrite the domains in COBOL code towards modern development architecture languages and principles and thus, derive the full benefits in terms of agility and innovation.
What role does the cloud have to play?
Standards from the cloud have become the standard to achieve to develop your information system. The benefits obtained are numerous: resilience, elasticity, the agility of the IS, innovation, cost control. In this sense, the Cloud is the enabler of the financial institution of tomorrow, as was the mainframe in its time. Re-platformization is the fastest pivot between these two worlds.
Even if regulatory obstacles are present for the adoption of the public cloud – especially for core services – the prospect of a sovereign cloud and the possibility of relying on a private cloud in the first instance, make it possible to commit to out of the mainframe.
How to get your leaders on board in this initiative?
Faced with projects that do not generate value directly for the businesses, the first step is the construction of a comprehensive business case both quantitative (savings generated) and qualitative (eg gained agility) to achieve a shared vision of becoming part of the mainframe, and more generally, of the information system.
This vision should highlight the potential situation thus created for the businesses over longer time horizons, by specifying the budget capacity gained to reallocate to business initiatives. These initiatives will have to be operated with a short-term ROI and must allow, gradually, to set up a flexible and agile architecture for the business core allowing to no longer transform progress, to accelerate the time-to-market. , promote innovation while controlling costs.
It is also an opportunity to create value through technology and to accelerate its technological rotation. Indeed, attracting the talents of tomorrow requires abandoning yesterday’s technologies. Thus, this modernization is a formidable vector of innovation allowing financial institutions to reinvent themselves and why not, to rethink their strategic areas through the practices of digital champions (Agile & Lean, Domain-Driven-Design, Data & IA).
How Accenture Can Help Your Business
Accenture offers a full range of services from definition to execution. We can help you define your modernization strategy, to offer the most sensible approach in your context while aligning it with key business initiatives.
Our vision is based on a proven and industrial approach to the transformation to be implemented. Indeed, tackling mainframe heritage requires putting in place the necessary safeguards to address operational risks and make automation a key success factor.
We thus have centers of excellence for the execution of modernization projects. In particular, our ability to re-platform the mainframe for which we have forged solid partnerships with industry leaders (Microfocus, RainCode, LzLabs, etc.). We are also a leader in setting up Digital Factory on a scale to modernize heritage.
A new era is emerging
Insurance Companies that persist in delaying the modernization of their mainframe assets are not only depriving themselves of an opportunity to reduce their costs but above all, they will not be able to seize all the business opportunities that digital and data can offer.