Legacy Modernization Modernize and Monetize

June 2012 Legacy Modernization Modernize and Monetize

2 Contents ABSTRACT 2 LEGACY SYSTEM 3 DRIVERS FOR LEGACY MODERNIZATION 3 MARKET OVERVIEW 4 HCL LEGACY MODERNIZATION 5 ABOUT HCL 9 ABSTRACT According to industry estimates most of the business critical applications for not only midsize companies, but also many Fortune 500 corporations run on legacy systems, due to the system s excellent performance and stability. CIO s and IT managers handling these applications constantly face challenges such as: High cost of supporting and maintaining the expensive legacy applications. Inefficient, slow and less productive system compared to competition. Unmitigated risk associated with lack of skill availability in the resource market. Risk associated with running business critical application on unsupported platform. Higher time to market due to large, monolithic, complex and less productive systems. Integration with newer systems due to incompatibility with new and different technologies. Legacy Modernization pertains to a solution that adapts to the on-demand needs of business a move that will help slash IT costs; promises even greater return when firms leverage existing technology with emerging Internet standards to extend specific business services to other applications, companies, and business processes; introducing a new level of balance between maintenance and responsiveness a new level of business agility. HCL s legacy modernization solution offers enhanced flexibility to your enterprise by modernizing and migrating your Legacy systems to help you increase business responsiveness, lower costs and mitigate risks.

3 LEGACY SYSTEM Any technology, method, software and or hardware which is continually to be in use in spite of development of new and more efficient methods and technology is a legacy. Legacy systems utilize obsolete programming languages or application programs that is typically tough to manage. IT S AN ASSET! Functional Customized Well-tuned Supports mission critical operations Provides a competitive edge OR IT S A LIABILITY! Uses old technology Requires hard-to-find skills Lacks documentation Hard to maintain Resists change, integration, and replacement DRIVERS FOR LEGACY MODERNIZATION Millions of investments, decades of development and Legacy system support for hundreds of business critical application makes it IT assets for any organization.on the other hand issues related to it makes a compulsion to modernize these Legacy systems. Today, however, as the platform seems to be ending its life cycle, both ISVs and enterprises that rely on the platform are facing a real problem. ISVs CONCERNS: Selling to new customers is becoming more difficult -As soon as a prospect understands that a System i box is required, the sales process becomes much more difficult. In addition, today s customers are demanding Web-based applications, and are unwilling to use green screen applications. Lack of available team resources -According to customers, there are very few green-screen RPG courses conducted by IBM. These courses are expensive and the number of people attending them is quite low. Veteran green-screen RPG programmers are retiring, and it is very hard to replace them or enlarge the development team.

4 Training new users on System i applications takes too long, because users find it hard to cope with unfamiliar function buttons (rather than a mouse). Adapting applications to meet customer demands takes too long. Customers are accustomed to getting their requests met very quickly (with modern integrated development environments (IDEs) such as Visual Studio). Although RPG is considered a 3rd or even 4th generation language, compared to today s modern languages not to mention their powerful IDEs green-screen RPG is less productive and lacks a rich third-party source for additional tools and code libraries. Existing customers are moving to new applications on more modern platforms such as.net, where there is a growing availability of packaged applications. ENTERPRISE CONCERNS Shortage of specialized resources: Programmers knowledgeable in COBOL or RPG are becoming difficult to find as more and more reach retirement age. As a result, long-range staffing plans and succession planning are issues that IT departments must contend with to ensure business continuity. Issues with integration: The AS/400 is not easily accessible by other platforms. Proprietary applications negatively impact the ability to integrate and interoperate with other systems such as Windows and Unix. Total cost of ownership: While the cost of hardware alone is not the issue, the total cost of ownership increases due to the higher cost of skilled resources as well as elevated license and support fees. Lack of business agility: Outdated platforms such as the AS/400 can stand in the way of a corporation s business agility. In order to remain competitive, organizations need to rapidly respond to changing market conditions, business requirements or to introduce new products or services. Lack of modern screens: RPG is the most common programming language on the AS/400 and since it is character- based, modern screens with graphic customization or web-enablement are difficult. MARKET OVERVIEW HOW IT GOT HERE? Prior to the turn of the century (2000) most modernization efforts were manual in their attempt to convert old systems to new. Manual efforts proved to be problematic, error prone, and extremely time consuming and in many cases enormous failures costing businesses millions of dollars in the attempt and in potential lost

5 revenue. Many business leaders chose to continue spending on the ancient systems electing to spend rather than risk a career-ending failure attempt. Systems continue to work and represent business-critical functionality; if it aren t broke don t fix it, created the exasperated situation many businesses have today WHERE IT S GOING? Resources capable of maintaining legacy systems, specifically those in COBOL, Pascal, Fortran, RPG, etc. are retiring from the work force with no newly trained developers entering the field. For systems to continue, business is forced to act now before it s too late. Artificial Intelligence techniques are being employed to build automated translation tools in order to partially, or in some cases fully, translate old legacy code, and databases to newer technologies. Businesses need to stay current with technological trends to stay competitive and that means mobile solutions, Web solutions, and client server solutions. Vendors continue to push the envelope to gain more efficiency with their translation tools in producing highly optimized code, better than that of custom generated code HCL LEGACY MODERNIZATION DISPELLING MYTHS ABOUT MODERNIZATION Myth1.Modernization only refers to Technological enhancements? Truth- Modernization is the building blocks of program design and operation Policy Options Waivers Business Process Reengineering (BPR) Technology Myth2. Modernization equates to the elimination of legacy systems? Truth- Modernization does not equate to the elimination of the old work-horse legacy system However, it does require that the legacy system be in good working order the system needs to be stable and reasonably adaptable Myth3. Modernization is the magic bullet that will increase productivity, decrease staff and save $$? Truth- Modernization If executed effectively, modernization can increase productivity and/or result in cost reductions

6 BUT overselling benefits can result in problems Managing expectations is critical Myth4. IT has all the answers when it comes to modernization efforts? Truth- Modernization project should include strong partnerships MODERNIZATION TRACK HCL s Legacy modernization methodology consist of 4 stages- Planning Planning stage includes Assessment and Strategizing the Solution. This involves number of steps- Identify the issues that need to be addressed in Legacy system. Identify the Risk involved in migration. To-be architecture definition, which will recommend a future state architecture that is best, suited to address all the issues and risks. Modernization strategy, which is the decision making step to finalize the solution. Transform-Includes Proof of concept and transformation implementation. Modernize POC Module to validate the strategy. This will act as the gateway for the implementation of the solution. Transformation includes modularize the Legacy application and then Re-write/Reface/Extend Validation- The functional and non-functional testing is done to validate the application. Implementation- It includes deployment, parallel run,transition and res-skilling process Stage 1: Planning Transformation Life Cycle Stage 2: Transform Stage 3: Validation Stage 4: Implementation Assessment Transformation Strategy Proof of Concept Transform Test Deploy Gate Retrofits Analyze Source System Risk Analysis Assess Transformation Objectives Transformation Plan Options Approach Requirements Deliverables Effort estimate Cost, Timeline Modernized POC Module Validate Strategy Modularize Reface/ Re-write, Refactor, Extend Integration, System Test, UAT Non-functional Deployment Parallel run Transition Decommission Reskilling Set Transformation Goals and Critical Success Measures Tools Management, Issue Management Review and Control Transformation Activities Knowledge Management Build Knowledge Repository Quality and Risk Management Project Governance and Communications Management

7 SOLUTIONS Integration via Service -oriented approach-integration of Legacy system with other newer distributed systems in a service oriented approach is the process of exposing business logic and data embedded in legacy programs as well defined, reusable service. So services designed on SOA principles can be integrated in any Legacy application layer. The technique can be Screen Scrapping, Business logic integration or data integration technique. Re-hosting- is a non- invasive approach of migrating a Legacy system to a new hardware platform. In Re-hosting the business logic and data of Legacy application remains intact in the new platform. It is often necessitated by the increasing power of the contemporary system and the steady increase in the cost of Legacy system. Re-engineering- is the bing bang approach to modernizing system. It seeks to understand the existing system from code and process perspective, design viable models and build new application on that basis. It is ideal way to capture organizational knowledge and migrate to new platform. Re-engineering is a two phase approach- The first comprises of reverse engineering design and code artifacts using tools. The second phase comprises of forward engineering to a new platform and architecture, incorporating new business requirements and functionalities. Package implementation- is replacement of legacy applications, in whole or part, with off-the-shelf software (COTS) such as ERP, CRM, SCM, Billing software etc. This includes replacing the home grown business applications with third party component or application. This sometimes can be challenging because these packages offer standard domain business process. Ideal way is to reengineering or customizing these packages and rewriting business logic. This is time consuming and expensive initially but drastically reduces the maintenance and enhancement cost and give good dividends over a period of time. TRANSFORMATIONAL PERSPECTIVE Technique Re-facing Extend Full re-write/ New package Parameter Solution feasibility Easy Moderate Challenging Ease of Use for Business Low Moderate High Retaining current Bus Proc High High Huge effort Performance High Medium Low Compliance to Target Architecture New Infrastructure Required Reuse of existing IT Resources Low Good High Low Medium High. High Moderate Low Effort Investment Low Medium High Overall Risk Low Medium High Tooling options/ Vendor Hats, Jwalk, IBS XT Java Tool box, Rdi 7.5 Java, J2EE, C#,.Net Solution consideration Run time license required No runtime Runtime Framework by Vendor

8 WHICH SOLUTION IS BEST? Choosing the best strategy (or combination of strategies) is nontrivial, and involves understanding the business case, schedule goals, resources available, residual value in the legacy assets, technical details of the application implementations and deployments, and appetite for assuming IT risk. There is no single path from where you are to where you want to go, if indeed you have identified your destination platform. Instead, there are often multiple alternative paths, and no single alternative may constitute the obvious choice. Each path will have advantages and disadvantages, and each must be weighed appropriately in the context of your unique organization. There is no one-size-fits-all answer. FACTORS DETERMINING RIGHT MODERNIZATION SOLU- TION- Cost of Migration- The total cost incurred (Hardware, Software and professional service charges) in migrating using a given technique. Effort of Migration The total effort involved (Internal, by the client and external by professional service providers) in migrating using the given technique. Elapsed time for migration The time taken from the beginning of the migration program to the implementation of the migrated application by using the given technique. Legacy Investment Reuse The extent to which existing Legacy system can be reused in the To-Be system User Experience The user experience of the modernized To-Be system in comparison to existing system. Business Process change-the Quantum changes required to optimize the current system Skill Set Skills required to support and enhance the system in future, after modernizing the existing system. Business Functionality How the modernized To-Be system can solve business requirements. Dependency on Legacy Platform- This factor determines the dependency with legacy system exist post modernization. Risk Mitigation- Risk involved in each of the solution for the business.

9 About HCL About HCL Technologies HCL Technologies is a leading global IT services company, working with clients in the areas that impact and redefine the core of their businesses. Since its inception into the global landscape after its IPO in 1999, HCL focuses on transformational outsourcing, underlined by innovation and value creation, and offers integrated portfolio of services including software-led IT solutions, infrastructure management, engineering and R&D services and BPO. HCL leverages its extensive global offshore infrastructure and network of offices in 26 countries to provide holistic, multiservice delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare. HCL takes pride in its philosophy of Employees First, Customers Second which empowers our 82,464 transformers to create a real value for the customers. HCL Technologies, along with its subsidiaries, has reported consolidated revenues of US$ 4.0 billion (Rs. 19,412 crores), as on 31 March 2012 (on LTMbasis). For more information, please visit www.hcltech.com About HCL Enterprise HCL is a $6.2 billion leading global technology and IT enterprise comprising two companies listed in India - HCL Technologies and HCL Infosystems. Founded in 1976, HCL is one of India s original IT garage start-ups. A pioneer of modern computing, HCL is a global transformational enterprise today. Its range of offerings includes product engineering, custom & package applications, BPO, IT infrastructure services, IT hardware, systems integration, and distribution of information and communications technology (ICT) products across a wide range of focused industry verticals. The HCL team consists of over 90,000 professionals of diverse nationalities, who operate from 31 countries including over 500 points of presence in India. HCL has partnerships with several leading global 1000 firms, including leading IT and technology firms. For more information, please visit www.hcl.com