Proven Strategies for Reducing Mainframe Costs by 50 Percent or More. By Sumeet Popli, Deepak Kumar

Transcription

1 Proven Strategies for Reducing Mainframe Costs by 50 Percent or More By Sumeet Popli, Deepak Kumar

2 Introduction Mainframes are a common element of today s IT infrastructures, but their closed, inflexible architecture can slow the timely delivery of products and services. Unlike newer, standards-based technologies, mainframes are difficult and expensive to maintain. Yet, many mission-critical applications still run on them or take advantage of them. As a result, organizations must continually enhance their mainframe applications to support the changing needs of the business. This white paper discusses common legacy modernization challenges organizations face and proven methods for effectively managing those challenges. Specifically, you will learn: The benefits of a Transformation and Modernization (TransMod) approach How to reduce mainframe costs by 50% or more How to future-proof your application portfolio Challenges Facing Existing Legacy Systems Legacy mainframe applications were built at a time when software development methodologies and business processes were not standardized. Mainframe applications tightly couple business logic at the presentation layer so they become inflexible as they scale. Many organizations have enhanced their mainframe applications using existing third and fourth generation languages (3GL and 4 Top Legacy Modernization Challenges High licensing costs GL) skill sets. However, the number of Lack of flexibility and closed architecture developers with 3GL and 4GL experience continues to dwindle as older programmers retire and younger developers embrace modern, standards-based technologies. As a result of scarce skill sets and high licensing fees, mainframe applications have become Complexity slows time to market Necessary integration with modern technologies Budget constraints Shortage of 3GL and 4GL skill sets Lack of documentation very expensive and difficult to maintain. While businesses continue to modernize their mainframe applications, lift-and-shift or re-engineering is nevertheless a daunting task. The continuous realignment of mainframe applications with changing business requirements has created a complex web of interconnections among the core applications and interfaces, making mainframe applications more complex over time. Mainframe applications have also been connected to other off-the-shelf packages and open system applications, further complicating the application portfolio. Meanwhile, non-standardized processes have been used to modernize mainframe applications and there is very little documentation explaining such changes. As a result, Nagarro White Paper 1

3 mainframe application development and maintenance have become tedious, challenging, and time-consuming tasks at a time when speed translates to competitive advantage. Over the past few decades, IT infrastructure flexibility has become more important as the pace of business and technology change has accelerated. However, the closed, inflexible architecture of legacy mainframe systems hinders their web-enablement, mobility, and integration with contemporary platforms. Nowadays, end customers expect businesses to respond to their desires with the rapid delivery of high-quality products and services. Businesses running on huge volume of data, growing at a substantially fast pace are paving the way for data analytics to play an important role. Cloud-based services, mobile applications, and value-added services have become necessary elements of the services portfolio. As a result, companies are moving toward Service-Oriented Architecture (SOA), which is forcing them to revisit their platform strategies, especially for legacy systems Regardless of which technology an organization adopts, it must decide how its mainframes can best serve the business in the future, which often involves leveraging legacy business logic and data. Unfortunately, connecting mainframes to other systems can be very complicated and IT budgets are limited so stakeholders have to set priorities. Future-Proofing the IT Infrastructure IT infrastructures must continually evolve to meet changing requirements of businesses and their customers, so IT organizations must build in flexibility. Elements of flexible IT infrastructures include: Seamless application integration to ensure system resource sharing and reduce functional redundancy Interoperability among disparate servers, operating Future-Proofing Tips systems, software packages, and home-grown Articulate short and long-term applications business objectives Scalability to accommodate future growth Comprehend the existing Systems intelligence that can anticipate workloads, infrastructure guarantee uptime, and enable resource sharing Understand the role of new Agile methods that allow faster delivery of technologies applications, solutions, and services Choose a modernization strategy Mobile and cloud-enablement to meet end user that balances business needs with demands at scale IT constraints Faster Time to Market to ensure high value for Align technology choices and money invested in deploying changes to IT integration with business objectives applications. Nagarro White Paper 2

4 Real time customer processes so as to reflect true point in time customer records throughout the application portfolio supporting a business function. Because mainframes preceded open, interoperable systems that Mainframe Maintenance provide anywhere, anytime access to information on any device, Budgeting Factors organizations must think carefully about how they modernize their legacy application portfolios because there are many Licensing costs options. Mainframe modernization efforts can vary greatly in Skill set scarcity complexity, time required, and costs. Moreover, it is not always Modernization required apparent which strategy is best, particularly in the absence of a Ongoing maintenance methodology that enables stakeholders to make an informed and support decision. Using an effective methodology, it is possible to choose a strategy that balances an organization s short and long-term business requirements with technology innovation and cost control. Reducing Mainframe Licensing and Maintenance Costs Maintaining mainframe legacy applications is costly due to their ongoing licensing costs and the lack of relevant skill sets. According to experts, 70 75% of IT budgets are spent maintaining legacy systems. Not surprisingly, cost owners are under pressure to reduce the costs of the mainframe portfolio, which can be accomplished in the following ways: Enabling resource flexibility using external skill sets to provide necessary maintenance and support services Consolidating systems and software to reduce licencing and maintenance costs. Undertaking Transformation and Modernization initiatives to reduce interdependencies, risks and TCO. Reducing system complexity to simplify maintenance and enhancement Reducing MIPS by adopting more efficient application architectures and improving the efficiency of batch execution Optimizing database structure and performance to reduce CPU overhead Eliminating redundant mainframe application code to reduce CPU overhead Adopting lean storage to improve system efficiency and to reduce costs While any one of these strategies can help lower costs, the scope, cost, and most effective prioritization of them may not be obvious in the absence of an upfront assessment that provides an accurate view of the existing environment. Nagarro White Paper 3

5 Assess Renovate Transform Proven Strategies for Reducing Mainframe Costs by 50 Percent or More ART: A Proven Methodology for Reducing Mainframe Portfolio TCO Many organizations have adopted some sort of Transformation and Modernization (TransMod) strategy that aligns business objectives with their application portfolios. Common goals are to make application environments more flexible, more responsive, more competitive, easier to maintain, and cheaper to support. TransMod usually involves replacing mainframe applications with third-party packages, re-hosting, re-engineering, re-architecting or re-aligning mainframe applications. Which approach is best depends on the needs of the organization at a given point in time. A successful TransMod strategy enables businesses to compete more effectively and use resources more efficiently. The Nagarro Center of Excellence developed its own Assess, Renovate and Transform (ART) methodology that enables organization to increase the ROI of their legacy mainframe investments. In the Assess phase, the team discovers system characteristics and builds an understanding of the current environment to develop a roadmap for the appropriate modernization strategy. The selected strategies could be of type renovate or transform. Renovate techniques are meant to improve cost effectiveness, efficiency and flexibility of existing mainframe systems. While transformation involves building the mainframe applications on new age technologies or migrating them to open systems or integrating them with off-the-shelf packages. Assessment Trans-Mod Solution Trans-Mod Strategy & Plan Scoping & Roadmap Risk Identification Cost & Effort Estimates Proof of Concept Statement of Work Application Optimization Peak MIPS Load Reduction Batch Restructuring Technology Consolidation Integration Enablement Solution Application Reengineering Application Portfolio Re-architect Off-the-shelf software packages Nagarro White Paper 4

6 Assess The Assess phase uses a Discover-Analyze-Recommend (DAR) process to thoroughly assess the mainframe application portfolio in just a few days. Organizations use the assessment to understand the cost, scope, and feasibility of a modernization plan at both technical and business levels. Discover The Discover phase uses automated and manual methods to discover many details of the mainframe modernization environment, some of which are commonly overlooked. Automated discovery provides in-depth views of the mainframe portfolio, including applications, interconnections, interfaces, total lines of code, dependencies, and database characteristics. An exhaustive questionnaire helps to enable a more accurate understanding the application portfolio s characteristics and the risks involved in the TransMod effort. Nagarro White Paper 5

7 As a result of the discovery effort, organizations are able to understand the structure and behavior of applications, alone and in relation to other applications, the database, and storage. The applications are mapped to business functions, simplifying the application portfolio and aiding the management of the TransMod initiative. Business process flow is also assessed in detail, which is particularly helpful for re-engineering, rearchitecting, and third-party package implementation. Analyze In the Analyze phase, the details of the automated and manual assessments are analyzed to provide the basis for a recommendation and roadmap. The details are quantified, assessed, and prioritized. Recommend In this phase, the most appropriate TransMod technique is recommended based on the assessment reports, whether it involves performance optimization, technology consolidation, reengineering, re-architecting, re-hosting or third-party package implementation. Included is a detailed assessment of the application portfolio which reveals benefits, savings, risks, estimates, and timelines. A Proof of Concept (POC) validates the recommended modernization approach. Final recommendations are proposed based on the POC findings. Renovate Depending on the goals of an organization a renovation typically drives better efficiencies and cost savings, while retaining the legacy applications on legacy platforms. It is renovating legacy applications and its components in a way to reduce maintenance and running costs. by optimizing the code and the database, reducing CPU, MIPS and DASD storage consumption, restructuring batch operations, consolidating technologies or building interfaces to enable web/ cloud/ off-theshelf packages. Renovate initiatives tend to be less costly, less complex, and less risky than Transform initiatives because they focus on making incremental improvements. More dramatic changes are made in the Transform stage. Transform Transformation techniques either re-host the mainframe applications or re-write using a new technology to a target platform. Decommissioning existing legacy applications and replacing with off-the-shelf third party software packages or solutions running on open systems is another transformation technique. Unlike Renovate initiatives, Transform initiatives impact all architectural layers of the organization including business, information, technology, and infrastructure. Nagarro White Paper 6

8 Strategies for Reducing TCO If your organization has not undertaken any modernization efforts in the past five years or more, then a combination of the following strategies can be used to drive down costs by 50% or more. Renovate & Transform Strategies Renovate Transform #1 MIPS Reduction #10 Re-hosting Solution #2 Batch operation optimization #11 Re-engineering solution #3 Code optimization #12 Re-architecting application portfolio #4 Application restructuring #13 Mainframe software replaced by thirdparty packages #5 Database optimization # 6 Technology consolidation #7 Database migration #8 Operating system migration #9 Web/ Cloud Enablement and Third Party Package Integration Renovate Strategies 1. Reduce peak MIPS load for better cost control. Mainframe CPU is charged at peak MIPS load rather than average load so organizations have to monitor the peak load to ensure it remains below the contract threshold limit. Batch applications are analyzed with the goal of reducing the load. Since individual application SLAs are the most challenging constraint, this strategy can be a very challenging exercise. Sometimes modifying the business model can help reduce peak load. Nagarro White Paper 7

9 2. Restructure batch operations to enable parallel execution. The batch schedule and related dependencies are analyzed for mandatory dependencies so that the overall batch schedule can be restructured. The objective is to break the dependencies to achieve as much parallel execution as possible. The parallelism should be designed in a manner that does not add to the peak usage. 3. Optimize code to reduce CPU usage, memory swapping frequency, I/O operations, database calls. Since executables are the basic entities affecting the cost of running an application, refining each executable can help reduce the operational cost. 4. Restructure applications to reduce their complexity and improve their performance. Generally an application serves a particular business function. It runs a set of executables in a sequence that are retrieving information from data storage flat files or databases. Continuous changes to legacy applications increase the complexity of the logic so many processing threads become redundant. Application restructuring realigns the code execution sequences to reduce the instruction set for a particular business function. The code changes require a change in the batch schedule to accommodate the new code sequences and the related code logic changes. As part of a restructuring effort, batch schedules are analyzed. Also, batch jobs capable of running in parallel are identified to reduce the batch window. 5. Fine-tune the database so it operates more efficiently in terms of storage and response time to I/O requests. A DBA or expert reviews the existing structure and depending on the current storage volume, database hits, and future growth projections and recommends changes for restructuring the existing database. The project may involve introducing indexes on a table, removing indexes on a table, introducing composite indexes, merging two tables into one, dividing a table into multiple tables, or redefining the relationships among tables. The goal of database tuning is to decrease the response time of the database for any I/O operation and also to avoid any wasted storage. Sometimes code optimization is also included so that dedicated programs can be created to perform I/O operations instead of embedded SQL statements. 6. Consolidate technology to reduce maintenance, tool, and human resource costs. Consolidating technology helps reduce the amount of supporting software required (such as compilers and debuggers) and may also reduce licensing costs as well. It also helps reduce the dependency on technical SMEs but most notably it makes the core system technology homogeneous. 7. Migrate to a more efficient database platform. The utility of the existing database solution is critically analyzed and compared with the benefits of another database solution. Depending on what exists, an organization may migrate from VSAM to DB2, from IDMS or IMS to DB or DB2, from flat files to VSAM KSDS, etc. Nagarro White Paper 8

10 8. Transition to a modern operating system that addresses challenges such as peak load, virtualization, and agility. Linux runs on IBM mainframes, for example. It supports virtualization, runs on dedicated hardware (which helps reduce fluctuating MIPS costs) and lowers the cost of running applications on a mainframe. Linux runs on general purpose central processors (CPs) as well as Integrated Facility for Linux (IFLs). IFLs are mainframe processes dedicated to running Linux so they are best suited to smaller applications where scalability will not be required in the future. 9. Enabling integration with modern systems. Enterprise application portfolios span a number of platforms. Integration enable builds links between legacy mainframe applications and newer applications. In these cases, the mainframe applications acts as data-stores. Transform Strategies 10. Hosting the core application from a legacy platform to a distributed platform such as Windows, Linux or UNIX using products that emulate mainframe environments on distributed platforms. That way, the embedded business logic remains intact which drives more value from previous investments. Meanwhile, modern technologies reduce license, operational, and maintenance costs and enable the use of advanced IDEs. Re-hosting is the fastest and most cost-effective Transform method. 11. Re-engineering a mainframe application to run on a new platform involves reverse engineering and forward engineering. Reverse engineering decodes the business logic embedded in the legacy applications. Reverse engineering is used to understand the details of business process flow, data flow, system architecture, and database structure. Forward engineering codes the business logic to a newer technology running on UNIX/Linux or Wintel systems. Re-engineering is complex, labor-intensive exercise so its risks and costs are high. 12. Re-architecting applications to suit current and anticipated business needs. Re-architecting may be performed on an existing platform or a new platform. If existing an application portfolio is on legacy platform, re-architecting is executed on an open system platform. If the application runs on an open platform, it is re- for new version of the platform and frameworks. The result is more efficient applications that are easier to maintain and extend, which increases IT efficiency and lowers operating costs. However, re-architecting is the costliest and most risky approach of all possible TransMod approaches. Nagarro White Paper 9

11 Renovate Re-engineer Re-host OTS Package Renovate Re-engineer Re-host OTS Package Renovate Re-engineer Re-host OTS Package Renovate Re-engineer Re-host OTS Package Proven Strategies for Reducing Mainframe Costs by 50 Percent or More 13. Moving to third-party products. This approach does not allow for the use of existing business logic because the mainframe application is abandoned in favor of an off-the-shelf package. However, with certain customizations, it may be possible to provide similar functionality. Comparative Analysis of Different Cost Reduction Strategies For the purpose of comparing different Cost reduction strategies as described in the previous section, we are grouping them into following four. Renovate, Re-hosting, Re-engineering and Off-The-Shelf Packages. There are four main driving factors behind each of these groups. The best suited approach would be one which would match more closely with organization objectives of modernization & transformation. These factors are Investment Required, Risk Appetite, Complexity Levels and Business Processes. High Improved Moderate As Is Low Investment Risk Complexity Business Process Nagarro White Paper 10

12 Conclusion An effective mainframe legacy modernization effort requires a thorough assessment of the existing environment followed by diligent planning as agreed by all stakeholders and executives. It is extremely important to identify all risks and have a mitigation strategy in place before moving into the execution phase because the effort required for modernization may be easily underestimated. Which strategy an organization chooses depends on the unique circumstances of a company, although the major drivers are business objectives and budget. The best migration approach is the one that balances risks, investment, complexity, and ROI in a manner that best suits the company. The initiative can be phased so that if any outcome of a particular phase does not meet expectations, the effort can be stopped without further investment in a particular strategy. The strategies that require the longest implementation timelines are usually the riskiest. Regardless, it is important to do health checks on the modernization work during the execution phase to ensure that time is not wasted. Using Nagarro s ART methodology, it is easier to predict the outcomes of a legacy modernization effort and be confident that the strategy chosen is the right one, selected for the right reasons. Using ART, our clients have been able to plan and execute their Legacy Modernization efforts in ways that reduces inefficiencies and lowers costs. About the Authors Sumeet Popli, Senior Architect at Nagarro Software Pvt. Ltd., Gurgaon, India. Sumeet has been working on mainframe technologies for more than 13 years, designing, developing, managing and deploying challenging solutions for various clients. He is an expert who specializes in designing and managing modernization solutions for legacy mainframe systems. Deepak Kumar, Architect at Nagarro Software Pvt. Ltd., Gurgaon, India. Deepak has been working on mainframe technologies and legacy modernization for more than 10 years. He designs modernization solutions and has successfully a number of challenging re-hosting projects. Nagarro White Paper 11

13 About Nagarro Nagarro is a high-end technology services firm specializing in strategic software and IT projects. It maintains offices in the U.S., Europe, and India to provide the highest level of service quality to organizations around the world representing virtually every industry. Fortune 500 companies and other industry leaders hire Nagarro to gain a competitive advantage. Recognized worldwide for its expertise developing complex software products and applications, Nagarro brings unmatched technical leadership and commitment to the success of every project. Nagarro s Legacy Modernization service uses proven methodologies, tools, accelerators and partnerships to deliver the most efficient solutions, cost effectively. Our legacy modernization experts are available to provide the resources your company needs, when you need them. With Nagarro as your partner, you can gain the confidence of knowing that the Legacy Modernization strategy you choose is the right one for your company given its business objectives and budget. Our Center of Excellence ensures best practices and continuous innovation to ensure the highest possible service quality and results. When you hire Nagarro, you get a seasoned team of experts that are dedicated to the project s success, including customer and technical support that is second to none. Nagarro White Paper 12

14 Nagarro specializes in building complex, business-critical software and IT projects for leading companies across multiple industries. Headquartered in Silicon Valley and a member of the Allgeier Group in Germany, Nagarro is recognized worldwide for its technical expertise, agile deployment, and bedrock commitment to customer service. Central to the company s character, Nagarro draws on almost two decades of experience providing premiere software product engineering services with highly trained resources around the globe. From initial research and design, to rapid prototyping and roll-out, including legacy modernization as well as new product creation, Nagarro has covered the spectrum of software product development for demanding corporate customers with the most exacting standards. Innovation and strategic excellence remain hallmarks of Nagarro s involvement. Nagarro has also been named to the Global Outsourcing 100 List by the IAOP (International Association of Outsourcing Professionals ), earning the highest possible scores in three categories Customer References, Employee Management and Executive Leadership. Identifying Nagarro among the 25 Rising Stars, this ranking reinforces Nagarro s reputation as a top global provider of business-critical outsourced software development and IT services. For more information, visit us online at Follow us on: sales@nagarro.com /company/nagarro /nagarro /nagarroinc 226 Airport Pkwy 5 Penn Plaza 400 Galleria Pkwy Zurich Vienna Timisoara New Delhi Suite rd Floor Suite 1500 New York, NY Atlanta, GA (408) (212) (678) Frankfurt Munich Stockholm Jaipur WHITEPAPER JUNE 24, 2014 Copyright Nagarro In. All rights reserved. No part of this document may be reproduced in any form or by any means, without express written permission from Nagarro Inc. All other trademarks mentioned herein are the property of their respective owners. Specifications subject to change without notice. 226 Airport Parkway, Suite 390 San Jose, CA 95110, USA; Phone: +1 (408) / Fax: +1 (408) Nagarro White Paper 13