Escaping the mainframe trap

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1 Escaping the mainframe trap

2 EXECUTIVE SUMMARY Mainframe environments have historically been the natural choice to run mission-critical business applications. However, as businesses plan their IT strategies for the next 5-10 years, how much of a role will the mainframe play? CIOs are increasingly questioning whether the mainframe will continue to be a strategic platform in the future. According to a recent CIO survey by Standish Group, 70% said the mainframe provides a central, strategic role currently. However, none of the CIOs consider the mainframe as a strategic platform in 5-10 years time. What role do you see the mainframe playing in your organization s future? Central/ Strategic role Average role Minor role No role Currently 70% 15% 15% 0% Over the next 5 years 15% 41% 37% 7% In 5-10 years 0% 7% 33% 59% Standish Group survey of CIOs in Fortune 1000 companies, March 2010 These statistics are quite marked. The IT landscape is fundamentally changing as organizations look to the future. Today s business demands, led by increasing consumerization and demand for applications on an array of easy-touse devices, requires greater agility from IT. Successful organizations will be those that embrace new technologies while retaining key intellectual property and maintaining it at lower costs by liberating the assets from the mainframe environment. Businesses are faced with the following challenges when planning future strategy for mainframe-based applications: Growing business needs require increase in production system capacity and performance Being forced into a decision to move from unsupported mainframe environments to continue operations and meet new performance levels Avoiding upgrade requirement every 1-3 years at a cost of between $2-10 million per instance Increasing shortage of mainframe skills and aging population of mainframe developers The mainframe environment therefore plays an increasingly questionable role in the IT and business strategies of the future. It is possible, however, to maximize the benefits of the intellectual property held within business critical applications and to escape the mainframe trap. CHALLENGES FOR THE CIO For CIOs, the budget reductions of the recession years are largely now behind us as the demands to expand and improve IT outweigh demands to rein in all costs. However there is still only modest budgetary growth in most cases. As growing legacy requirements create an increasing IT debt to be managed, the role of the CIO continues to be challenging. Looming large on the CIO agenda is cloud. Cloud creates both challenge and opportunity for CIOs today. The opportunity lies in driving towards more flexible, cost-effective service provision for the business, enabling in-house IT resources to focus on much more strategic initiatives. At the same time, CIOs are managing a host of current technologies and applications, some applications duplicating others, some legacy applications for which there appears no easy modernization solution and entrenched solutions and applications that provide no clear journey to cloud-based services. Gartner emphasizes the opportunity and challenge that cloud provides: PAGE 1

3 Over the next four years, almost half of all CIOs expect to operate the majority of their applications and infrastructures via cloud technologies. This change requires that CIOs reimagine IT and lead it through a process of creative destruction. Source: Reimagining IT: The 2011 CIO Agenda, Gartner, January 1, Source: Reimagining IT: The 2011 CIO Agenda, Gartner, Inc., January 1, Increasing enterprise growth is top of the CIO agenda in 2011 and there are a number of strategies that CIOs can employ as they consider how to modernize their existing infrastructure and application service provision to enable this. These will be discussed in the following section. Attracting and retaining customers remains a consistently high objective for CIOs, and continues to be for the foreseeable future. Modernization strategies can enable CIOs to improve customer service and satisfaction without the need for budgetary increases, which enables CIOs to achieve their number three priority for 2011 that of reducing enterprise costs. Reducing the cost of IT is understandably a very high current priority in the fall out from the financial crisis but becomes less of a priority in years to come. Obviously the expectation is that reducing costs now can deliver future growth opportunities, making cost reduction less necessary in the future. There is an important point to note here though cost reduction in itself is not the key driver for CIOs now. What that cost reduction can enable is the real business driver. Through modernization strategies, CIOs have been able to significantly increase business agility, a process that has begun with the dramatic cost reduction that can result from escaping the mainframe trap. MODERNIZATION STRATEGIES TO ESCAPE THE MAINFRAME TRAP As organizations look to address the increasing IT debt caused by years of tight budgets and cost reductions, addressing legacy mainframe applications effectively is a critical success factor. The fact that these applications are still used in the organization today emphasizes their business importance and often there is a high level of intellectual capital embedded within these systems. As organizations consider their future IT strategy, CIOs are faced with the following legacy mainframe modernization choices: Package replacement Application rewrite Rehosting PAGE 2

4 Package replacement A generic alternative, this compels organizations to do business in the manner dictated by the package s functionality, or to spend significant amounts of additional time and money customizing the package as part of the implementation. Workflow that is fundamental to the way a business operates can be lost, and costly, complex data remodeling and retraining is invariably required. Many package implementations are also either never fully completed or are significantly late and over budget. Panorama Consulting s 2010 ERP report highlights that a significant number of ERP implementations fail to deliver anywhere near the anticipated benefit or value. Over 40% of companies surveyed failed to achieve at least half the expected business benefits, and 22% of ERP implementations failed to deliver any measurable business benefits. Additionally, over 40% experienced major disruption after the implementation went live from being unable to ship products to an inability to close the books. This approach can therefore carry the significant risks of budget over-spend and loss of key intellectual property. For non business-critical applications however, this approach is one that could be considered. Application rewrite Once a favored approach, history has shown that the majority of re-engineering projects either failed completely or were delivered years late and over budget. Today, this is typically considered a high-risk approach. Rehosting There are multiple approaches available to a CIO here. Applications can be migrated in their entirety with increasingly less code change required. Alternatively, just the development of mainframe applications can be rehosted, with the system still deployed on the mainframe, and many pre-production testing processes can also be rehosted. While the approaches of rehosting development and test still maintain production systems on the mainframe, all three of these strategies offer ways to start to improve productivity, reduce costs, increase focus on innovation and improve time-to-market, thereby escaping the trap that mainframe infrastructures provide. When comparing the options of implementing a package, rewriting or modernizing the existing business-critical system, a CIO of a leading retailer found that application migration proved the most effective solution across a number of key considerations: Migration and rehosting technologies today also provide ways to enable applications to be migrated to cloud platforms, enabling CIOs to achieve their top priorities while also implementing their desired infrastructure and reducing their internal IT debt. Migration and rehosting helps CIOs escape the mainframe trap and can provide the foundation to fundamentally change the game for any business. PAGE 3

5 Application Migration The key to successful migration projects lies in minimizing change to avoid unnecessary risk during the initial migration project, at the same time moving to an environment that supports business agility for the future. The benefits of migration can be compelling but risk avoidance is paramount. It is therefore vital to ensure the solution can: Match or exceed performance levels required to support the business Create an infrastructure that enables the Reliability, Availability and Serviceability (RAS) levels demanded by the business Provide an architecture that enables IT to rapidly respond to new business demands Offer equivalent application and system-level security Micro Focus offers a proven mainframe migration solution that meets all of the above requirements, with well over 600 completed migration and modernization projects. The mainframe migration products deliver: Full application development lifecycle support Comprehensive mainframe compatibility, including support for multiple mainframe COBOL dialects, CICS and IMS transaction system support and batch application and JCL support Full range of data migration and data access options, including support for VSAM file types, IMS database support, DB2 data migration support and the migration of data to relational databases. More data than ever can now be migrated to SQL Server without change These capabilities have delivered business transformation to customers who embark upon enterprise application migration. Micro Focus customers have experienced substantial benefits including cost reduction of up to 91%, expansion into new global markets with reduced time-to-market and increased customer satisfaction and competitive advantage through application changes funded by migration projects. Where there is a need to upgrade a mainframe, or renew licenses within the next 1-3 years, or where CIOs have yet to decide on a strategy to replace unsupported mainframe environments, application migration offers an ideal opportunity to release applications from mainframe constraints and escape the mainframe trap. Distributed platforms provide the infrastructure for business growth without requiring significant investment and they also provide the foundation for business-critical systems to be deployed in the cloud. Rehosting mainframe development As organizations build, maintain and enhance their existing enterprise applications, the need to respond to market and customer demands requires an ever more dynamic pace of development. As an alternative to migrating mainframe applications, rehosting development can deliver substantial productivity improvements. Using the mainframe for development activities puts pressure on performance and increases the demand for processing power. Benefits include: Increased productivity by as much as 40% through greater distributed processing power, resulting in faster response times Faster time to market from shortened development cycles. New products and features are in use faster, delivering competitive advantage, ROI and freeing up resources for reinvestment Innovate more through faster development. Providing modern tools ensure developers learn faster. Existing skills can be retained and subject matter experts can focus on innovation Rehosting mainframe testing Application testing on the mainframe can take up as much processing power and cost as production, sometimes over 50% of available MIPS. Rehosting testing onto Windows can more than halve testing costs and significantly reduces the time taken to test and deploy a new release or package. PAGE 4

6 Rehosting testing a key element of the Virtual Mainframe approach from Micro Focus helps organizations achieve more with fewer resources as multiple QA teams can accomplish multiple tasks simultaneously, and additions to new test cycles no longer require additional MIPS. Benefits include: Significantly reduced mainframe operating costs through reduced mainframe MIPS consumption and lower-cost scaling up of test resources in new environments Improved product quality and reduced re-work by improving the performance of testing, completing test-cases in a shorter period of time and being able to conduct more extensive testing as a result Improved time-to-market due to the availability of far greater test capacity COMPANIES THAT HAVE ESCAPED THE MAINFRAME TRAP Owens & Minor, Inc. Greater focus on product innovation through budget freed up after migration Growth via an acquisition strategy led to a profusion of disconnected applications, a disparate software stack and growing mainframe maintenance and operating costs. Owens & Minor needed to modernize and integrate its ERP applications urgently, but lacked the budget to do so. Maintaining the competitive advantage embedded in this business logic while reducing costs to enable reinvestment in customer-led improvements was imperative. Owens & Minor was aware that rewriting the ERP system, which held a considerable amount of competitive advantage and industry knowledge, or implementing a packaged system were each likely to cost $100m plus. Ruling out this level of expenditure, Owens & Minor chose application migration as its modernization initiative and achieved: Increased focus on customer service initiatives to further enhance superior service levels Ability to reinvest savings in user-interface modernization by reducing IT infrastructure costs by approximately 77% per year Increased staff productivity and efficiency by reducing 25 screens to 5-10 on a new platform for role-based user interfaces Greater performance capacity and faster response times Retained and further optimized 20 years of business process value and competitive advantage City of Miami Improved response of Fire Computer Aided Dispatch system and cut costs by 50% The City of Miami Fire-Rescue Department s mission is to serve the citizens of Miami in a professional manner by providing rapid emergency response and other services to save lives and protect property. The City of Miami faced the following challenges: A Fire Computer Aided Dispatch system strained by the demands of an increasing population Difficulty of integrating with new systems and functionality Increasingly costly and difficult to maintain A rewrite of the application would have taken 2-3 years, for around double the cost of migrating the application off the mainframe. The migration took place within six months at a fraction of the cost of a rewrite and delivered benefits including: A 50% reduction in IT operations costs Improved uptime and disaster recovery Flexible system and faster response times PAGE 5

7 SUMMARY CIO priorities for 2011 are clear. Provide business growth, attract and retain customers and reduce enterprise costs. Addressing how to manage legacy applications in the future is a key consideration for achieving these objectives. Escaping the mainframe trap offers an opportunity for organizations and CIOs to implement strategies that will provide the foundation for successful growth in the next few years. About Micro Focus Micro Focus, a member of the FTSE 250, provides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization, Testing and Management software enables customers business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit: Micro Focus IP Development Limited. All rights reserved. MICRO FOCUS, the Micro Focus logo, among others, are trademarks or registered trademarks of Micro Focus IP Development Limited or its subsidiaries or affiliated companies in the United Kingdom, United States and other countries. All other marks are the property of their respective owners. WPESMT0711 PAGE 6

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