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Is your legacy mainframe ready for retirement?

Andrew Meyer | CIO Review | 13 november 2017

This first appeared in CIO Review.

Software as a Service (SaaS) platforms have been gaining higher levels of adoption and investment across all industries–from healthcare to financial services. When successful, transitioning from mainframe to SaaS-based applications enables a smaller IT footprint as well as the introduction of new capabilities and functionality– a win/win for both IT and the business.

The increase in available SaaS-based application solutions is an opportunity for organizations to rethink their strategy around sustaining aging and costly mainframe based legacy applications. While no two mainframes and organizations are the same, we have found that regardless of industry, many of these projects follow the same lifecycle and have common needs. We often counsel organizations and leaders on this process, and below, we share the seven main steps for planning a successful mainframe to SaaS transition.

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1. Analyze mainframe capabilities and create the business case

  • Engage key stakeholders early to outline the core capabilities performed by mainframe applications.
  • Work with finance to create a business case that outlines the yearly IT costs for maintaining and operating the mainframe as well as business costs for transactions supported by the mainframe (cost per transaction and so on).
  • Use the business case, solicit input from stakeholders on alternatives to address the capabilities.

2. Determine minimum organization requirement

  • Outline the minimum organizational needs and set vendor expectations at the start to save valuable time throughout the process. These minimums will help distill the vast number of vendors down to a manageable list able to meet the requirements. For example, some non-SaaS vendors may offer to work with a third party hosting service to offer their solution in a hosted manner.
  • Ask yourself if your IT would support such a setup before going down that road.

3. Implement a sourcing strategy and perform market/vendor research

Once your minimum needs are in order, market research will be needed to investigate industry trends and develop your sourcing strategy. A few suggested approaches include:

  • Self-sourcing: Perform quality research with advanced keyword searching; leverage online content from industry journals and publications; review vendor websites and references for industry trends.
  • Peer Review: Solicit feedback from peer organizations and ask industry colleagues for recommendations and insights into what their organizations use for similar capabilities.
  • Advisory: Work with an advisory firm or research partner to provide direct insight into vendors and solution capabilities.

These approaches can be taken in sync or separately. Regardless, more than one approach and validation method should be conducted to insure confidence in your decision.

4. Document risks and actively mitigate

  • As with any project, documenting risks and developing mitigation tactics should be compulsory. Start early. This means that while you are actively performing market research, documenting your requirements and conducting vendor analysis, start highlighting your risks.
  • Use the risks identified to help drive your future state requirements and vendor selection process, i.e. mitigate those risks as early in the process as possible. While a formal Project Management Office (PMO) structure is not needed for every project, we find that organizations often overlook the need to establish some basic project management principals early in the process. Project management is not just about implementation.
  • When selecting SaaS vendors, determine the make-up of the vendor maturity in the marketplace and conduct a risk impact and assessment for your organization.

5. Establish accountability and decision making responsibilities

  • Identify program sponsors and consider organizing a steering committee/work group early in the effort to keep senior leaders engaged.
  • Assign a business owner for each application/function on the mainframe to streamline day-to-day decisions. This business owner should work with the overall mainframe lead/program manager and team to ensure the requirements are complete for their business function as well as communicate/promote the change within their department.
  • A clear and empowered decision maker, or body, should be established at the onset, with decision timelines communicated and upheld to foster a sense of urgency and promote the importance of the transformation.

6. Prepare the organization, communicate, communicate, communicate …

  • Mainframe transitions are often tedious technical efforts, with complexities ranging from undocumented interfaces to large scale data migrations, organizational change management is often a last minute go-live activity or even worse— an afterthought. Since most mainframe applications have been around for years, end-users may struggle with adopting newer web based applications and procedures. Create an understanding of why the mainframe is going away and the benefits of the new SaaS-based applications early in the project and prepare your users for the change.

7. Negotiate and smartly contract

  • Many SaaS vendors are start-ups looking to establish and expand their customer base. If your organization is willing to undertake a joint development effort, you may have significant opportunity to influence the capabilities of the product and financial incentives as an early adopter. Alternatively, if your organization is risk adverse it may be better suited to implement a more mature SaaS application with an established customer base.
  • Prepare to evaluate different licensing/pricing models and consider your organizations growth strategy.

With proper planning, transitioning from mainframe to SaaS-based applications can enable your organization to be more agile and gain access to capabilities too expensive to build out on legacy mainframe platforms. We also recommend determining a high level data migration strategy at the start of the project and revisit/validate the strategy once SaaS vendors are selected.  While most organizations will opt to not convert historical data into the new SaaS application, often legacy data is needed for data retention compliance and occasionally business continuity.

A next step for organizations completing a mainframe transition is to revisit the business case and ROI – are you on track to achieve the forecasted costs savings? Are adjustment needed to the ROI projections? Updating the business case and projections will not only help keep leadership and stakeholders bought into the project but will help your organization better forecast future SaaS implementation efforts. 

Andrew Meyer is a healthcare IT expert at PA Consulting Group

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