How can IT directors save costs and boost
innovation?
Market analyst firm Gartner says, "Chief information
officers will have to spend the next 12 months holding down costs
while innovating for the future."
This is the CIO's dilemma: to achieve a balance between managing
short-term issues of cost and complexity while investing in the
future. They also have to decide which legacy systems should be
replaced and which should have their life extended. For a solution,
they will have to look at things from an unconventional
perspective.
Conventional wisdom is that new is better than old, that
hardware consistently gets better, faster and cheaper. Consumers
who have come to expect year-on-year improvements fuel this
cycle.
Although legacy hardware will need replacing, we must ask what
is to be done about the applications running on those platforms.
After all, they fuel the business, touch customers and help deliver
products and services to new markets. Does all this mean that new
applications are better than those written in the past? Are Cobol
business processes obsolete simply because they can be re-written
in Java? Probably not.
Gartner says 75% of the world's business is processed by 180
billion to 200 billion lines of Cobol code - the equivalent of
about 10 million books.
These applications capture business processes developed over
many years. IT commodities are available to everyone, but in-house
written applications are unique to that organisation's way of doing
business. These embody data, processes, rules and concepts that are
intertwined with the people who run the business.
This is ultimately what distinguishes one business from its
competitors. In the well-worn analogy, the bathwater (the legacy
platform) is dispensable, but the baby (the application) is
not.
So can IT unlock an application containing valuable business
processes from a legacy platform that restricts a CIO's ability to
reduce cost and to innovate for an agile future? Absolutely.
For many firms, the mainframe is no longer the most
cost-effective platform from which to operate core business
services. Moving applications to low-cost Linux or Windows
platforms can reduce or remove mainframe operating costs currently
locked up in IT infrastructure budgets. Software is preserved and
business continuity is no more disturbed than a conventional
mainframe upgrade.
To understand the value of legacy applications, simply estimate
the cost of doing business without them, and how much it would cost
to rebuild that legacy from scratch. CIOs can now upgrade to
better, cheaper and faster new platforms, and re-use existing
business processes and skills. This means they can avoid the high
costs and risks of "ripping and replacing" several thousand volumes
of business scripts.
In this way, year-on-year cost savings and return on investment
can often be achieved within a few months. The CIO's dilemma can be
answered by viewing legacy applications as an asset that can help
drive down costs and increase agility with minimum risk.
Mike Gilbert is director of product
strategy of Micro Focus