A recent study conducted by the IBM Institute for Business Value in collaboration with Oxford Economics reveals that digital transformation has become a top priority for organizations. The survey shows that 67% of executive respondents believe their organizations need to transform quickly to stay competitive, with 57% experiencing increased pressure on their IT due to market disruptions. To meet the demands of digital transformation, enterprises need to modernize and integrate their existing applications and data, including mainframe systems.

CEOs recognize the importance of technology modernization in reinventing products, services, and operations to improve efficiency, agility, and time to market. In fact, a survey found that technology modernization is ranked as one of the top priorities for CEOs. To achieve digital transformation, organizations require flexible, secure, open, and fit-for-purpose platforms that can consistently operate and develop services across hybrid cloud environments.

The mainframe remains a critical component in achieving this goal, as mission-critical applications continue to leverage the strength of mainframes. A hybrid best-fit approach that combines mainframes and the cloud enables modernization, integration, and deployment of applications, leading to improved business agility and addressing client pain points.

The study found that nearly 7 in 10 IT executives consider mainframe-based applications to be central to their business and technology strategies. Additionally, 68% of respondents view mainframe systems as critical to their hybrid cloud strategy.

However, modernization can present challenges for organizations. Almost 70% of executives surveyed believe their mainframe-based applications need to be modernized. The study also reveals that organizations are 12 times more likely to leverage existing mainframe assets rather than rebuilding their application estates from scratch. This is because rebuilding can be costly, risky, and time-consuming.

The top challenge cited by executives pursuing mainframe application modernization is the lack of required resources and skills. On the other hand, mainframe costs, which were seen as a significant barrier two years ago, are no longer perceived as such. Executives now look for more sources of value from mainframe systems, such as resilience, optimization, and regulatory compliance.

Key Recommendations for Mainframe Modernization

To reinvigorate mainframe modernization and achieve “best-fit” transformation across mainframe, cloud, and generative AI, IT leaders should take the following critical actions:

• Adopt an iterative approach: Integrate new and existing environments incrementally and continuously instead of pursuing a big bang, rip and replace strategy. Co-create a business case and roadmap with input from business counterparts to meet strategic goals.
• Assess portfolio and build a roadmap: Understand the role of the mainframe in the enterprise and how it aligns with the greater hybrid cloud technology ecosystem. Prioritize cross-skilling within the organization and collaborate with partners to address talent and resource gaps.
• Leverage multiple application modernization entry points: Facilitate easy access to existing mainframe applications and data by using APIs. Integrate open-source tools and streamline processes for agility. Develop cloud-native applications on the mainframe and containerize applications.

By following these recommendations, organizations can effectively modernize their mainframe applications and unlock the full potential of hybrid cloud transformation.

FAQs

Why is mainframe application modernization important for digital transformation?

Mainframe application modernization is crucial for digital transformation because it allows organizations to meet the demands of emerging technologies, evolving customer expectations, and disruptive market forces. Modernizing mainframe applications enables enterprises to improve efficiency, agility, and time to market.

What are the main challenges organizations face in modernizing mainframe applications?

Organizations face challenges such as the lack of required resources and skills for modernizing mainframe applications. Additionally, the cost, risk, and time involved in rebuilding mainframe estates from scratch make leveraging existing mainframe assets a more viable option for many organizations.

How can organizations approach mainframe modernization?

Organizations can approach mainframe modernization by adopting an iterative approach to integrate new and existing environments gradually. They should assess their portfolio and build a roadmap that aligns the role of the mainframe with the hybrid cloud technology ecosystem. Leveraging multiple application modernization entry points, such as APIs and open-source tools, can also facilitate the process.

What benefits can organizations expect from modernizing mainframe applications?

Modernizing mainframe applications brings various benefits, including business agility, reduced talent gap, accelerated time to market, improved access to mission-critical data across platforms, optimization of costs, resilience, and regulatory compliance.

^1. Based on a 2021 survey refresh by the IBM Institute for Business Value (IBV) with Oxford Economics “Application modernization on the mainframe – Expanding the value of hybrid cloud transformation,” conducting a double-blind survey of 200 IT executives in North America in April 2023.

Sources:

• IBM Thought Leadership