Looking at ways to cut costs? Pretty much every industry is feeling the pinch and looking at ways to tighten budgets and drive efficiencies. The good news for everyone is that IT modernization offers great opportunities for businesses to achieve significant savings! Interested? Heard it all before? Sceptical? Let me help persuade you.

First let’s talk about what I mean by modernization, as this word can mean different things to different people.

Modernization to me is a constant cycle of continually improving applications and processes in order to achieve business goals. As already discussed, one of the key business goals at the moment is to reduce costs, but modernization projects can help in many other areas as well such as enabling increased productivity, improving user experience or speeding time to market with new products. Or maybe IT compliance and governance is more of a concern?

But for today, let’s focus on cutting costs – how can modernization help IT reduce costs whilst still offering an excellent service to the business? One of the quickest wins that can achieve real savings today is to look at consolidating the platforms that you manage. Running old proprietary mainframe platforms can be expensive - both in terms of skills to manage and the operational expenses associated with maintenance contracts and the software running on them. Migrating from one platform to another can generate some huge cost savings and it’s not as difficult as you may think. So what about an example to back this up? UBS recently consolidated all its Unisys mainframes and applications onto the IBM z/OS platform with over 98% of the applications being migrated automatically. Estimated savings? – 100m Euros!

The z/OS platform (for all the good things it has going about it) can itself be very expensive to own and operate. As businesses grow and there is increased demand on applications, the processing power of the mainframe often has to be extended. Increasing the number of MIPS has a knock on effect on the licensing of other software and applications that run on the mainframe resulting in some seriously unwelcomed increases in operational costs.

There are various ways to reduce costs here. The first option is to migrate one or more applications off the mainframe onto a lower cost platform (e.g. Microsoft Windows), thus reducing the number of MIPS needed and therefore lowering the operational costs of the mainframe. Another option could be to do testing and development of applications off mainframe, again with the effect of reducing the number of MIPS consumed. The most interesting option which z/OS users now have access to is to carry on running applications on the mainframe hardware, but rather than have them running on z/OS, moving them to the Integrated Facility for Linux (IFL) - basically z/Linux running on IBM mainframe hardware. Why do this? Applications that run on IFL do not impact the MSU or MIPS rating of the mainframe, meaning that any applications moved to IFL are basically saving MIPS cost. And the best thing is, you still get to utilize your existing IBM hardware with all the benefits that go with it (security, scalability etc).

Looking at what this means in cold hard numbers the savings can be substantial. Micro Focus recently helped one of the largest US organizations move a 4000 MIP z/OS application over to the IFL, with no loss in performance or capability giving them a $6m a year saving in their operational costs. Not bad hey? Even better, this migration was done in a matter of months and with the return on investment delivered in much the same amount of time. This organization can also now continue to grow this core application at a fraction of the cost than if it had remained on z/OS.

Hopefully you can now see how the platform migration aspect of IT modernization can help generate serious cost savings. In my next post I’ll talk about some other areas of modernization which can achieve equally as attractive savings - User interface modernization & programming productivity solutions.