“Digital Transformation Economy”: Modernizing Core Technology Architectures is Critical

We’ve heard the term “digital transformation” used almost to the point of exhaustion in the past couple of years – but it’s not just a lot of hot air: It’s the future. 

IDC predicts that digital transformation will attain macroeconomic scale over the next three to four years, changing the way enterprises operate and reshaping the global economy. According to the research company, “By 2020, 50 percent of the Global 2000 will see the majority of their business depend on their ability to create digitally enhanced products, services and experiences.”

This push toward digitalization of businesses, products and services has disrupted industries and fundamentally changed the way that consumers do things. In the last few years, the speed and innovation facilitated by digital technologies has toppled market leaders and shifted the balance of power from the old guard to digitally native organizations – and this is across all industries and organizations, not just tech companies.

Forward-thinking organizations and businesses of all sizes have come to embrace digital technologies as a means to transform their industries and secure competitive advantage. The imperatives for change are myriad, but chief among them are the mounting demands of consumers and the increasingly blurred line between our personal and professional lives. Customers want access to information in real time, and staff expect the same functionality from their business applications as those in their personal lives.

To meet the challenges of what IDC calls the “digital transformation economy,” organizations need to modernize their core technologies to meet consumer and staff needs – including the mainframe architectures that provide the very foundation of many businesses these days.

The Need to Modernize

You may be reluctant to modernize, and you’re not alone. CIOs have concerns that any kind of change is risky (the “Why fix what’s not broken?” mentality), or that years of accumulated data is too intertwined with the company’s monolithic mainframe software applications.

But sooner or later, legacy investments in technology become a liability. Conversion costs rise as competitors with newer tech eat away at your markets. Qualified support personnel may retire or move on, and your old vendors may no longer be available. Businesses that failed to adapt are left without the needed support for their big iron and COBOL or PS1 applications. The IT department is flooded with complaints from unhappy users of the mainframe, while upgrade costs grow out of line with available budget. Additionally, the cost of third-party software to support mainframe applications continues to escalate.

At some point, change is no longer simply an option, but an imperative. Maintaining the status quo means accepting mediocre technology, which in turn means business performance is driven by outdated and unsupported mainframe infrastructures – placing the company in a risky position that will only get worse over time.

If you’re ready to upgrade your architecture but you’re concerned with the risks, time and cost of a complete rewrite, however, there is another option: rehosting.

What is Rehosting?

Rehosting is an option whereby existing mainframe applications move unchanged to a modern open system, such as multi-tiered, SQL-based x86 environment, or the cloud.

Each has its own advantages. Rehosting to an x86 system results in lower capital expenditure in the long term: Newer systems result in lower purchase costs and have reduced space, power and cooling requirements over their lifetimes.

Cloud-based architectures, on the other hand, offer flexibility. Not limited by on-site hardware, cloud providers can scale capabilities to match user demand by utilizing enterprise-grade servers. Additionally, operating applications through the cloud opens the door to new services, which can further boost a business’ ability to compete in today’s marketplace.

Why Rehost? Top 10 Reasons

For many businesses, rehosting can be a thoroughly cost-effective way to overhaul mainframe architectures. When performed properly, rehosting provides many of the benefits of a rewrite, with significantly fewer risks and costs.

It can also act as a beneficial first step to a less complicated – and therefore less risky – source code rewrite. Where mainframes lock a customer into a limited and tightly coupled architecture, the loosely coupled architecture of an open system offers dynamic scalability, workload management and agility.

Safety is also improved, since existing mainframe security is maintained, and additional safeguards provided by modern SQL databases can now be employed quickly and easily.

If you’re still not convinced, here are 10 important reasons to look closely at rehosting:

  1. It helps fund necessary innovation. Rehosting has been proven to dramatically reduce infrastructure and operating costs. These funds then can be reallocated to innovation – which may include the rewriting of legacy apps. For example, GE Capital modernized its Portfolio Management System (PMS) and the data with a complete mainframe rehosting solution that moved mainframe applications into a multi-tiered, x86 environment. The modernization took about a year to complete and yielded astonishing results. By moving the 71 million lines-of-code system moved from an ancient mainframe environment to a modern and open Unix environment, GE Capital’s annual run cost for the PMS system and related applications fell by 66 percent; the time it took for PMS to recover from disaster decreased by 240 percent; and the overall application footprint shrank by 78 percent. While the cost savings were enormous, the most positive result was moving to a platform that integrated easily with the rest of the business and supported growth and innovation.
  2.  It can support bimodal or two-speed IT. Bimodal IT is a Gartner concept created to help CIOs understand that their IT estate must support both traditional and agile models of IT delivery in order for them to make informed decisions about infrastructure, processes, people and tools. Investment in legacy Unix, mainframe and other proprietary systems has dwindled, and the demand for legacy server operating environments will continue to decline. Rehosting allows a bimodal system, providing a fast, flexible foundation to quickly respond to market change and future integration requirements.
  3. It allows a business to exploit the cloud. Rehosting is critical to helping an IT organization extend its modernizing apps to the cloud. Your choice of a rehosting application should offer the option of running it in a cloud.
  4. It’s less risky than rewriting. Re-engineering projects can take years. Rehosting is not only faster, but it also means no changes to the underlying business logic or user interface, with no negative impact on the enterprise. It requires minimal training, and the system operates in exactly the same way.
  5. It increases uptime and reliability. Rehosting give the ability to configure Active, and Active clustering across your infrastructure provides the foundation for the “five nines” of availability in this “always-on” world. 
  6. It improves performance and manageability. The ability to dynamically scale your environment based on business demand eliminates the need to always provide resources for peak processing – even though they may only be required for short periods of time – maintaining maximum service and reliability.  You pay for what you use, with no impact on the business.
  7. It helps identify system inefficiencies. Through rehosting, GE Capital identified 78 percent of its source code was unused. Rehosting allows you to review all of your legacy code for efficiency and usage patterns.
  8. It enables a business to leverage existing workforce and skillsets. Mainframe experts still exist because so many mission-critical systems in enterprises are still running mainframes. With rehosting, IT departments can leverage their existing mainframe skills as well as the skills of the open systems teams.
  9. It helps increase agility and time to market. According to CGI, apart from vendor lock-in, organizations still dependent on mainframes are confronted by four realities: slow time-to-market; aging skills pools; lack of access to best-in-class software; and high maintenance costs. These factors mean that enterprises are facing a decreased ability to be agile and quick to market, which in the modern digital economy is fatal.
  10. It allows a business to provide the best customer experience. We live in an always-on world with consumers expecting a highly personalized customer experience, even in the virtual realm. This is one reason that digital transformation is so important for many CIOs: Rehosting allows you to unlock the value of your mainframe apps by exposing them to web services for mobile and digital applications, transforming the customer experience.

A Changing Enterprise Landscape

Many legacy mainframe architectures are unable to live up to the demands of the new digital transformation economy, which can pose serious headaches for businesses looking to remain competitive and agile. Unless they can maximize the applications they use, many companies will lack the performance necessary to take advantage of new initiatives like the Internet of Things and the cloud.

Enterprise organizations benefit when they resist seeing modernization as a “one-off” project where progress and innovation stop at the end, and instead embrace modernization as a cycle. For businesses that want to modernize but are wary of a full rewrite, rehosting provides the platform an organization needs to meet the demands of the new digital economy and ensure its future success.