Reframe Your Mainframe

REFRAME YOUR MAINFRAME Fast-forward functionality through cloud computing While cloud native development might be considered the “new standard,” mainframe still has a stronghold in the financial services industry.

2 REFRAME YOUR MAINFRAME For good reason. Resiliency, Today, firms can however modernize reliability and trusted security their mainframe environment to combined with concerns over the become more agile and responsive risks and cost of modernization have so they can meet customers’ kept mainframe as a mainstay for expectations in the current disruptive many financial services firms. business environment without engaging in a complete cloud But that’s changing. The benefits of migration. By taking a thoughtful, cloud technologies along with the law phased approach to modernizing of diminishing returns in mainframe your mainframe environment, you tuning and enhancement are pointing can overcome common obstacles to the need for an inevitable migration and enjoy some of the advantages away from the mainframe for core of cloud computing without putting functionality and processing. As long core functionality at risk. as mainframe is still functional, some firms are reluctant to make that move. While for many, the risks still outweigh the benefits, increased maturity in cloud and other technologies should warrant a re-think.

3 REFRAME YOUR MAINFRAME Making the case for mainframe modernization

Despite cloud native multi-week regression testing cycles development being touted as that undermine the business benefit of delivering new features in a volatile the “new standard,” abundant market. Though DevOps (and the research demonstrates the associated tooling) is available within mainframe is still a core a mainframe environment, the investment and valuable technology in Continuous Integration/Continuous Delivery (CI/CD) tooling is focused for many enterprises. toward non-mainframe platforms. Furthermore, the flexibility and versatility That research indicates a significant of the cloud is more conducive to portion of enterprise business logic today’s disruptive digital environment. and data still resides on the mainframe. This is especially true for financial From a cost perspective, mainframes services. In fact, as of 2017, 92 of the have historically been costly and offered world’s top 100 banks relied on IBM Z® minimal financial flexibility. While this is 1 mainframes for transaction processing. changing, cloud can offer economies And with good reason. Mainframes are of scale and new functions that are not very resilient and are proven to handle available through mainframe computing. the exceptional volumes associated with core banking processes. A changing workforce is also having an impact on mainframe computing. However, with MIPS (millions of Hardcore mainframe architecture and instructions per second) growth engineering skills are becoming rarer outpacing revenue growth, this in the market. Instead, the focus for proprietary platform is becoming college graduates and trainees is increasingly difficult to sustain. on new, “more exciting” technologies. Mainframes also impose some serious Experienced staff are exiting the business constraints. Their highly workforce, sometimes leaving behind complex, interdependent and tightly little in the way of documentation and coupled architectures often can’t address with unclear succession plans. This today’s business challenges with the can leave mainframe environments agility that’s needed to meet customer vulnerable to a shrinking skills base and expectations. Delivering change to the a material loss in knowledge about how mainframe in today’s world involves these legacy systems actually work.

4 REFRAME YOUR MAINFRAME Matching wants to methodology

Financial services firms computing is known for and continues want to materially increase to deliver. Any move to the cloud should be a business decision, not just an agility, enhance productivity IT decision. That decision should be and reduce costs so they based on a holistic strategic view that can remain competitive creates a strong business case around in a digital world. improving the customer journey and considers all aspects of cost, including:

In support of those objectives, firms • Run cost of the new architecture are looking for ways to manage complex architectures that can support • Cost to achieve microservices for enhanced performance and to have access to (and leverage) • Opportunity cost of not modernizing the large volumes of customer and (or missing out on delivering transactional data they hold. One-to- new features to customers) two-week development sprints, easy application upgrades and automated It’s clear that firms should at least take regression testing are the objectives, steps to modernize their mainframe but it is not a short route to goal. environment to meet current market conditions and customer expectations. By leveraging cloud’s scalability and The question is, how to do it and flexibility, firms can “right size” to what might be getting in the way? meet their computing needs at any given time. Current market skills are trending toward more people who are well versed in agile methodology and prepared for a cloud environment. This is the market firms are going to draw from and rely on into the future.

It makes sense that many firms are reluctant to abandon their mainframe environment entirely, given the well- understood benefits mainframe

5 REFRAME YOUR MAINFRAME The ins and outs of mainframe modernization

There are three issues that represent common barriers firms face when contemplating making the move to modernize their mainframes…or take the larger leap to cloud:

There is zero room for error. Any International Business Machines outage during a migration could have Corporation (IBM) offers a “modern” devastating consequences in terms of mainframe. Firms currently have the disrupting mission critical operations. option of leveraging a mainframe solution from IBM that features tailored fit pricing, enhances MIPS and offers mainframe apprenticeships to address skill shortages.2 Adopting the new IBM commercial constructs in the mainframe space could be a less-daunting prospect Mainframes have proven functionality. than undergoing a multi-year, full-scale Mainframes are famously stable, reliable mainframe modernization journey. and able to handle massive transaction volumes. They have strong disaster recovery resilience and well-proven security capabilities. These are very valuable factors to the financial services industry. Mainframes have a “comfort zone” factor too. They’ve always been there and they’ve always worked. This is an attractive value proposition that’s difficult for a traditionally risk-averse industry to let go of.

6 REFRAME YOUR MAINFRAME Decouple to overcome common obstacles

Firms can overcome Many modern use cases require these common obstacles real-time data access while legacy systems typically provide data on an by avoiding risky “big asynchronous or batch basis. Replicating bang” conversions. data, using a change data capture process, to a more accessible data lake Phased migrations from existing (or similar) can provide the foundation mainframe IT to microservices are a good for event-based architectures. way to maintain business continuity, information security and uptime while modernizing your mainframe or migrating to the cloud. Begin with use cases that increase business value through improved agility and flexibility. Your efforts should gain credibility based on smaller, successful initiatives.

However, firms should note that decoupling requires a true hollowing out at the core in order to eventually eliminate the ongoing reliance on the mainframe. This effort involves deep analysis into which applications to begin with and should be based on a decision-making process that considers talent, cost, pain points, value delivered and return on investment.

7 REFRAME YOUR MAINFRAME The 6 Rs framework—our approach to mitigating mainframe migration challenges

Accenture recognizes Retain for its useful life, 1 remediating any specific pain that every single client’s points and moving development mainframe ecosystem is and test environments to a unique and has evolved cloud infrastructure to increase differently over the last agility and reduce costs. 20 to 30 years. As such, there is no silver bullet to Replace with a package mainframe modernization. 2 (including commercial-off-the- shelf [COTS] or Software as a Accenture has developed a “6 Rs” Service) that offers improved framework to help firms identify the right functionality; extract and treatment strategies for their mainframe migrate data to a new system to applications while mitigating the risks reduce complexity and costs. that hold so many firms back. This framework can vary slightly, depending on geography or project, but it provides Re-host to a less-expensive some basic principles that are useful for 3 location without changing the any mainframe modernization initiative. code, to gain cost benefits without the risk that can Begin your mainframe modernization result from programming with a discovery phase in which you language changes. evaluate each application and choose the appropriate strategy, as follows:

8 REFRAME YOUR MAINFRAME Re-platform to a different 4 platform/operating system, without changing the programming language, and thus permit applications to run in the cloud.

Re-factor from legacy code to a 5 modern programming language, using (semi) automated tooling to mitigate risk relating to legacy skills, increase agility and reduce costs.

Re-imagine the business: 6 Rewrite the application based on newly developed requirements, using domain-driven design. The resulting application is not based on current capabilities and therefore not only allows technology modernization but also modernization of what were likely outdated business processes.

9 REFRAME YOUR MAINFRAME The strategic imperative for leaving the mainframe ecosystem

While there has been a 20-year effort to improve Moving to the cloud when mainframe usage and it’s about money: the 50% consumption, that effort now business case has diminishing returns. Every business has its reasons for migrating to the cloud. Increased For many firms, the cost of maintaining agility, and the benefits that it brings, a mainframe ecosystem is outpacing are a key strategic consideration. revenue growth. MIPS usage is expected Your migration strategy depends on to increase without generating additional your business objectives. That being revenue to cover the costs. But there are said, and based on our experience, costs beyond financial considerations. for many firms, cost accounts The need for agility and responsiveness for about 50% of the motivation is a key motivator behind the strategic to move to the cloud. Take these imperative to migrate away from the steps to assess the viability of mainframe. Firms that cannot keep your mainframe-to-cloud cost pace with change could be left behind. business case to make sure your Furthermore, despite mainframe migration is truly cost-effective: apprenticeship programs to address a waning skills pool, availability of 1. Analyze current mainframe mainframe architecture and engineering costs (include hardware, skills should continue to reduce. software and headcount). Note: Analyzing recharge costs These developments indicate only rather than true mainframe the mainframe might become an spend can be misleading. unsustainable platform, for the long 2. Define the target state architecture term. While an eventual full migration and calculate the run cost (include to the cloud could prove to be a solution components, providers, favorable way to address changing software and internal headcount). customer expectations and stay ahead of the competition, fully modernizing 3. Add transformation costs the mainframe ecosystem is a multi- (include treatment strategies, year journey. By modernizing low third parties, internal changes risk, low complexity applications and any dual run costs). first, you can build the credibility and confidence to establish and maintain 4. Evaluate the results of steps 1-3 to understand the cost- momentum through to completion. effectiveness of your migration.

10 REFRAME YOUR MAINFRAME Beginning your mainframe modernization journey

Mainframes have been a Specifically, reviewing the IT strategy, proven, resilient mainstay and understanding the mainframe (and wider) ecosystem helps define technology for the financial the target state. Hypothesis-led services industry for decades. workshops help firms to arrive at a set of treatment strategies which are then However, in an era of disruptive used in the Business Case calculations innovation and cloud computing, for securing buy-in from leadership. modernizing your mainframe into a simpler, more agile architecture is a business-critical strategic Why Accenture? imperative and an inevitability. We believe application There is no one-size-fits-all strategy modernization is a way to unlock for mainframe modernization. Every the value in the data residing business is unique. There are many in legacy systems, while at the options. Modernizing your core platforms same time paving the way to fully begins with a focused analysis that transform applications with new determines the right strategy for technologies and digital capabilities meeting your enterprise’s needs. that can help grow your business.

Mainframe modernization also takes With a solid reputation in application time. It’s a thoughtful, well-planned, modernization services and a “best- journey that results in a simpler, more in-class” vision and strategy, we take agile architecture that can help you keep a proactive, consultative approach pace with the competition and adapt to backed by extensive technical changing customer expectations. Let us knowledge to help our clients define help you. We have numerous ecosystem a mainframe modernization journey relationships, assets and accelerators to that is appropriate for their situation. assist our clients in effectively executing their mainframe modernization journey.

We recommend a short, 6-week consulting engagement to kick start a mainframe modernization journey, focused on driving out appropriate treatment strategies and meaningful modernization recommendations.

11 REFRAME YOUR MAINFRAME Authors About Accenture

Kamran Ikram Accenture is a leading global professional Managing Director Technology services company, providing a broad range of Strategy & Advisory services and solutions in strategy, consulting, United Kingdom and Ireland digital, technology and operations. [email protected] Combining unmatched experience and specialized skills across more than 40 Michael Coates industries and all business functions— Manager Strategy & Consulting underpinned by the world’s largest delivery Financial Services United Kingdom and Ireland network—Accenture works at the intersection [email protected] of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With References 513,000 people serving clients in more than 120 countries, Accenture drives innovation to 1. “IBM Z: The banking platform for the improve the way the world works and lives. future.” The Green Grid, November 27, Visit us at www.accenture.com. 2017. Access at: https://www.thegreengrid. org/en/newsroom/blog/ibm-z-banking- This document is intended for general informational platform-future. purposes only and does not take into account the reader’s specific circumstances, and may not reflect 2. “Tailored Fit Pricing for IBM Z Offers Cost the most current developments. Accenture disclaims, Effective Workload Growth Compared to to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of Three Public Cloud Examples,” IBM, May the information in this document and for any acts or 2019. Access at: https://www.ibm.com/ omissions made based on such information. Accenture downloads/cas/XAR2QOBD. “Develop does not provide legal, regulatory, audit, or tax advice. New Collar Talent through a Registered Readers are responsible for obtaining such advice from Mainframe Apprenticeship Program,” IBM, their own legal counsel or other licensed professionals. January 2019. Access at: https://www.ibm. com/downloads/cas/Q9K09G2X.

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