The business world has changed; commerce today is increasingly being done via the Internet. However, many companies using mainframes are unable to play the new way because valuable information their employees need is locked inside mainframe legacy systems.
This is a big problem. Aberdeen Group, an IT market research and consulting firm of Boston, Massachusetts, states that 70 percent of the world’s business data is still processed by mainframe legacy applications. Stephen Lane, research vice president, IT services at Aberdeen Group, submits, “The fundamental rules of business have changed. Globalization and the impact of the Web mean that you can’t do business the way you used to. If your technology keeps you from changing the way you do business, then you better change that technology.”
These companies need an IT business modernization transformation. The complexity and difficulty of business legacy transformation requires a new skill set and expertise that is far beyond most enterprises internally. How to best accomplish this presents a quandary. “Trying to contribute to business change and progress and simultaneously focus on cost is like trying to apply the gas and brakes at the same time,” Lane says.
Since few IT staffs have a cape with a bullet proof suit, outsourcing to experts with an accomplished track record to bring the past into the future is essential. Outsourcing business legacy transformation can produce a leaner, more powerful application set to open mainframe applications for wider use, reduce maintenance costs, and eliminate redundancy. Outsourcing also enables business agility and, the bottom line of outsourcing — reducing expenditures.
IBM launched its Legacy Transformation Services in April 2003 to help companies with this transformation. Clients can harness IBM resources in development, tools, offshore resources, worldwide network of development and service centers plus its 175,000-person IBM Global Services Division.
Powered by the Internet, IBM’s Web services programming model offers easily translated data through extensible markup language (XML) in conjunction with interface protocols. Applications that were once in silos that could not share data without being manually reentered, can now communicate with one another through the Web services model.
Unlocking the secrets of legacy mainframe applications may be like unraveling the mysteries of the ancient Egyptians. Joanne Martin, Ph.D., director of new sales, Application Management Services for IBM Global Services, sales support center of Somers, New York, explains that years ago, constraints on memory and processing power forced clever programmers to created complex programs that are now difficult to pull apart. Many of these gurus are often long gone, taking their secrets with them.
The Tough Process of IT Transformation
Making the quantum leap is easier said than done. Myles Suer is a senior industry analyst for the Sageza Group of Mountain View, California. “The older the company, the harder the transition is going to be,” he says. But he feels companies that complete the transition “will establish a clear market advantage between themselves and lagging competitors.”
IBM realized benefits from its own business transformation that started in 1998. Martin says IBM’s maintenance costs went from 40 percent to 20 percent and cut applications from 15,000 to less than 6,000 applications at an enterprise level. “This eliminated redundancy and got us to where business is going,” she says.
Failing to Plan is Planning to Fail
Determining which functions and applications need to be enabled first is the number one priority. Enhancing information accessibility and business agility while alleviating redundancy and maintenance costs should produce a return on investment (ROI) to fund the project and subsequent stages.
Lane synopsizes the game plan. “The overall strategy is to do things in incremental pieces to provide pay back. Web services can make the applications available to other functions in a way that is driven by business needs, not technology,” she says.
Martin explains, “Transformation isn’t just an IT statement. It is an end-to-end business statement. The goal of transformation is to have a significant alignment that is flexible and easily changed with end-to-end capabilities.”
“Rip and replace” for many is not the optimal choice. Unlocking and enabling the existing application can achieve the desired benefit. Suer elaborates. “You can build on top of the legacy applications to bring them to the Web. By enabling design at the business logic level, companies can have their cake and eat it too–especially if the people who understand the legacy applications can turn them into Web services.”
The biggest challenge is transforming applications that are serving vital functions in running the business. As Martin submits, “It is like changing all four tires on the race track as you are going around.”
Martin explains companies must carefully plan and implement any IT transformation. “You want to manage the transformation so that you have scaffolding around your old systems as you are running your business on them. You have to have system and performance management with testing capabilities that ensures safe execution. We can lay out a map within the value chain on components to show the priorities as a divining rod.”
Lane adds advantages offered by outsourcing the process. “A service provider uses transformation tools as part of its core business where an internal IS organization has to acquire the technologies and learn how to use them. This makes the process take longer and cost more. Not many companies have the depth and breadth of expertise through the entire spectrum.”
Suer reports IBM has built relationships with 90 of the largest independent software vendors as well as middle market players. As illustrated in the figure below, IBM is extremely strong in the market assessment of the Sageza Group.
Move Ahead or Move Over
Suer underscores the need for business transformation. “We are on a road map where enterprises will get tremendous compelling benefits from business processes that before couldn’t happen. If the integration strategy is a winner, stove pipe software won’t be a loser.”
As Martin says, “Business is now saying what they need from IT rather than being constrained by IT. It is a new world full of promise with peril.”
Lessons from the Outsourcing Journal:
- Business legacy transformation empowers business agility.
- Business legacy transformation reduced IBM’s applications and maintenance costs in half.
- Outsourcing Legacy transformation harnesses expertise and extensive resources few enterprises possess.