In the first part of this blog, Technology that constrains digital transformation – Part 1, we wrote how mainframe technology can be an impediment to digital transformation, and that organisations who continue to rely on them put themselves at risk. While there are no silver bullets for transformation, when a mainframe is involved there are three key things organisations can do to navigate success:

1. Understand the actual transformation objectives to drive your approach and solution selection

2. Use cost and schedule certainty to drive business case stability

3. Use risk management for effective investment management

Understanding the actual transformation objectives to drive your approach and solution selection

At the highest level, there are two reasons to undertake a technology transformation away from a mainframe: reducing the cost of support and/or enabling business agility. The cost of support may include the costs of both the mainframe and also the infrastructure it sits on, the high costs associated with integrating the mainframe with digital technology, and others. Business agility can include things like the speed to market for new products and services, ongoing regulatory compliance in a timely fashion and operational efficiencies through process simplification. Being clear about the objectives of the transformation (whether it be technology, business or digital) guides both solution selection and the approach. For example, when developing a business case for a technology transformation the options may start to look like this:

This type of modelling (see above) increases your chances of failure. Instead, rather than starting with the solution, your solution options should be the result of analysis (see below).

These business and technology options are not mutually exclusive. For example, an organisation may elect to migrate some of the operation to an out of the box (OOTB) or Software as a Service (SaaS) solution and other parts may be re-written or refactored. A roadmap for change should also be developed to determine if the organisation moves to the target transformation end state in one or multiple stages.

Use cost and schedule certainty to drive business case stability

Transformation programmes take time and have a high price tag. The transformation is less likely to be abandoned if there is some cost and schedule transparency and accuracy present during business case development. The business case should be revisited at points during the delivery. The transformation is at risk of being abandoned where there is a significant deviation in cost and/or schedule that doesn’t have a positive impact on the benefits. Some organisations have had greater success by implementing OOTB or SaaS, as the software vendors use their experience of repeated delivery to provide greater certainty on cost and schedule. However proceed with caution. Ensure the partner relationship with the vendor is tried and tested and you are getting a realistic view of the estimated delivery timescales and cost, rather than a “sunny day” view to win your business.

Where your target operation/service delivery needs to be differentiated, or is unique enough that there is not a good alignment with an OOTB or SaaS solution, custom development may be required. Custom development will increase cost and schedule uncertainty. Refactoring your mainframe into a functionality equivalent solution written in a modern language (e.g. Java and .Net), is a good option. Automated tools allow vendors to offer mainframe refactoring at a fixed price and can be completed in two years or less. There is no disruption to the existing mainframe during this process. Once refactored, the application can continue to run as is and your existing development team will need little upskilling to support it. Once refactored you can modernise with new digital technologies including cloud infrastructure, workflow management and process automation.

Use risk management for effective investment management

Regardless of the solution selected, risk management needs to be considered from the beginning. This does not mean endless spreadsheets and risk meetings. A good understanding of the risk factors and appropriate risk management plans should be developed prior to starting transformation activities. The impact that costs can have on cost and schedule certainty, as well as the costs to manage the risks, need to be considered as part of the overall investment decision in the business case. Note the use of management vs mitigation plans, as not all risks will be able to be mitigated or the cost of full mitigation can be prohibitive. The agreed key risks and status need to be communicated to the transformation governance board and executives on a regular basis. Where there are big changes to the risks, the business case and transformation approach should be reviewed and potentially revised.

It’s crucial to start your transformation before you have a burning platform and an approaching deadline. Undertake your transformation in advance to meet the needs of your organisation for the future.

Given the pace of change in technology, the use by date has passed for mainframes.

Please don’t hesitate to get in touch with me if you want to discuss any of the material from either this blog or the previously published Part 1.

Find out more about our digital consultancy and capabilities at Deloitte Digital New Zealand

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