Mainframe Modernization in the Era of Digital Transformation

September 09, 2020

Digital transformation is the disruption of business through digital technologies, changing how a business operates and delivers value to customers.

For the past few years, digital transformation has been a key item on the agendas of CxOs everywhere. We’ve been explaining to our clients what digital transformation means and its implications in business, budget, culture, technology and competitiveness. The question that we get asked the most is: “Does digital transformation push innovation?” And, the answer is a resounding yes.

The next question we always get is what technologies should we focus on to achieve digital transformation. There are many solutions, but the key is to treat technology as a business asset, like Uber and Airbnb do. According to Forrester, however, companies that are looking to push the envelope can innovate by implementing emerging technologies such as augmented and virtual reality (AR, VR), robotic process automation (RPA), artificial intelligence (AI) and intelligent agents and chatbots.

The real challenge comes when a bank or telco has a 40-year-old mainframe in its basement, that serves as the host system for millions of customers that are served monthly. Unplugging, or ripping and replacing the system, is simply not an option. But can you still transform the business and implement emerging technologies? Once again, the answer is a resounding yes.

Mainframe modernization does not necessarily imply replacing migrating old legacy systems to newer cloud applications. Legacy systems can be adapted and integrated with modern applications that improve the customer experience. For example, it’s quite possible to implement chatbots and AI in the cloud, while connecting the trusty old mainframe to the data lake that resides in the cloud and feeds it new applications that impact processes, culture and business value.

Banks and insurance companies are masters of this hybrid world, where mainframes and modern applications blend seamlessly together. One of our largest clients has benefited from our work integrating new technology with its legacy system. Through this integration, the firm has been able to create new channels for servicing customers, where self-service chatbots enhance customer service and convert leads to sales. All activity is captured and monitored by real time dashboards which can influence strategies and sale promotions. These new assets are deployed in the cloud. Our enterprise client can make fast decisions based on data, and it can scale as needed without much hassle. At the end, every service order is processed in its time-tested mainframe.

Other enterprise clients are working toward a long-term mainframe modernization strategy that does involve replacing legacy systems. It is part of a broader digital transformation strategy the looks beyond technology and impacts the business operations, employee culture and product offerings. It’s not easy to do away with legacy systems. They take years to build, cost lots of money overtime and let’s face it, in many cases they continue to do the job they were tasked with. But unfortunately, their worth just may be decreasing over time, and they will most certainly reach obsolescence at some point. A strategic approach to digital transformation can help companies leverage what they have, while transitioning to the future, where innovative technologies can give you new ways to interact with customers, increase productivity, save costs and find better ways of working.

Multinational enterprises with big investments and dependencies in legacy systems have been successful in mainframe modernization because they have partnered with experts who understand their business and who also understand that change takes time and a long-term approach. Wovenware has supported the growth and evolution of organizations in highly regulated industries for the past 17 years through the implementation of technologies that expand human capabilities. While technology enthusiasts may have a hard time using the words “mainframe” and “innovation” in the same sentence, mainframes are essential to the 71 percent of Fortune 500 companies that still use them.

I still remember a conversation I had with Carlos, our COO, more than a decade ago. We were attending one of the last JavaOne conferences in SF hosted by Sun Microsystems and were discussing the value of integration to legacy systems as we had a long walk in a foggy afternoon. Little did we know that the conversation – as well as the systems – are still very relevant today.

Incorporating emerging technologies, empowering teams to experiment, and find ways to do daily work in a better way is what innovation is all about. It can infuse the enterprise with new energy and creativity that shatters stagnant ways of doing things, and it’s how strategic transformation is borne. But this type of digital transformation – the kind that is most successful — doesn’t happen overnight. When tried and true legacy systems that continue to provide value, live in harmony with innovative technologies, the ultimate benefits of mainframe modernization are realized. Yet, this type of change doesn’t come easy, but requires a unique digital transformation partner that can transcend the old and the new to create a perfect balance of each.

 

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