EXECUTIVE INSIGHT

Retiring the mainframe

The path to IT modernization and competitiveness

CGIs experience demonstrates that retiring the

mainframe platform can save up to 90% of its associated
operating expenses, reduce time for competitive upgrades
and more. Yet, a mix of inertia and misunderstanding of
what it takes to realize these savings causes businesses to
waste precious resources to maintain obsolete
technologies, impeding their competitiveness.

Todays modernization paths enable businesses to keep all Contacts

of their applications intact and can trigger the simplification Competence centre
Jlio GONALVES
Tel: +351 210 018 000
of the legacy portfolioall without investing a single dollar julio.goncalves@cgi.com

to fund the adoption of a far more competitive platform. Sweden

Karin Schreil JONSSON
Tel: +46 70 2635130
karin.schreil.jonsson@cgi.com
Is this too good to be true?
The Netherlands
Ronald EVERS
Tel: +31 88 564 74 98
ronald.evers@cgi.com

This executive summary highlights CGIs successful approach to All other locations
retiring mainframes and illustrates the striking outcomes. info@cgi.com

1 cgi.com
2013 CGI GROUP INC.
Overcoming the handicaps
Mainframe is the name chosen in the sixties to label large systems designed to host
A BRIEF HISTORY OF
core applications and bulk data processing for corporations and government MAINFRAMES
organizations. This class of equipment was designed to handle high volumes of During the early years of the
transactions, enable the hot-swapping of system capacity without disrupting its computer industry (1950s to
functioning, tolerate faults, and support high I/O throughput by using specialized 1970s), several manufacturers
produced mainframes, but,
dedicated processors.
despite many mergers and
Based on this legacy, a significant portion of todays transactions is still processed by acquisitions, the mainframe
mainframes. Yet, unlike in the beginning of the computer era, big businesses no longer market has always been
require mainframes to handle large volumes of data quickly and accurately. Today, the dominated by IBM. In the 80s, the
largest transactional systems in the world dont run on mainframes. Leaders such as market faced tremendous
Apple and its iTunes and Apps stores, Facebook, Amazon, Google and most leading pressure as mini-computers
started to perform the same tasks
telecommunications companies and retailers no longer operate mainframes.
at a fraction of the cost, and
Most importantly, new competitors across all sectors of the economy are challenging terminals began to be replaced
incumbents without the handicaps of old mainframe technologies, and therefore by PCs.
benefitting from radically lower costs and far faster response times in launching new The growth of e-business
service offerings. dramatically increased the
number of back-end transactions
But, if mainframes are such expensive and complex computing devices, why are they still
and the size and throughput of
used when much better and cheaper alternatives exist? In reality, every new business,
databases, providing a second
and large ones in particular, dont use mainframes. breath of life for mainframes.
Apart from being locked into a single provider, organizations still dependent on Mainframe providers have tried to
mainframes face four increasing handicaps: increase their hold on the market
Slow time-to-market: Launching new services takes too long and responding by bundling and integrating
mainframe hardware and
to competitors new services can be a nightmare.
software. By increasing the
Rapidly aging skill pools: Many mainframe vendors have closed shop or weight of software in the mix and
stopped supporting their old platforms, putting business continuity at risk. refusing to license software to
Lack of access to best-in-class software: Such software is no longer being other makers, IBM in particular
developed for the mainframe (e.g., CRM, Liferay, etc.). has become a de facto monopoly
in many regions, with more than
High maintenance costs: With additional CPU capacity and memory priced at 90% of market share.
a premium and business rules hard coded, making changes is costly and time-
This has allowed mainframe
consuming. providers to increase prices
CGI addresses the complexity and the highly integrated nature of mainframe applications despite declining demand in
by maintaining their integrity, minimizing recoding, and retaining functionality while opposition to whats happening in
adopting a state-of-the-art system landscape. the rest of the computer industry
(Moores Law). For example, for
a given upgrade of mainframe
memory, a company will pay up
Our experience demonstrates that retiring the mainframe to 60 times more for an upgrade
in an open system environment
platform can save up to 90% of its associated operating and, even though mainframe
components are built to be more
expenses, reduce time for competitive upgrades and resilient, such a difference has a
direct impact on a companys
more. CGI has helped clients reduce infrastructure and competitiveness.
application maintenance platform costs from 50-70% and
to redeploy 30-50% of resources towards innovation
projects.

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Mainframe modernization
CGIs modernization approach migrates mainframe-based applications to open and cost-
CASE STUDY
effective Unix and Linux-based platforms and has generated the following benefits for our Portugal Ministry of
clients: Justice
Reduced infrastructure and application maintenance platform costs from 70% to less Among European governments,
than 50% the Portuguese government has
faced some of the most extreme
Redeployment of resources towards innovation from 30% to more than 50% budgetary pressures requiring it
Our track record reveals an extremely compelling business case. A typical modernization to re-think most of its processes,
project involves the following economics: including its IT infrastructure.

The annual cost per MIPS ranges from $2,000 to $5,000 (1,500 to 4,000). CGI has helped the countrys
Ministry of Justice reduce
Depending on the complexity of the mainframe technologies involved, a migration operating costs by retiring its 250
project costs approximately the same as one year of maintenance. MIPS mainframe. The migration
Resulting ongoing system maintenance costs are around 20% of mainframe costs. was executed without impacting
its 24x7 IMS applications,
The below chart provides high-level savings estimates for how for a modernization
accessed by thousands of users
project involving a midsize mainframe (4,000 MIPS) delivers benefits. around the world.
CGI deliverables
Mainframe cost $6 to $16 million/year The migration was carried out in
Migration project $8 to 10 million (one time) seven months by a combined
team of CGI, its partners and
New system cost $1.5 to $2.5 million/year
client staff.
Project payback 9 to 12 months A target platform was established
Savings Approximately $8 million/year on servers running Linux. DBDs,
PSBs and copybooks were
parsed, and missing and
duplicate information was

A fully funded alternative identified. The application and

data migration process was
CGI believes in sharing risks and rewards equitably and can leverage its strong balance completed on time and on
sheet to fully underwrite the migration and modernization process. For example, for the budget. All transaction
same midsize mainframe (4,000 MIPS), financing the modernization project and processing capabilities,
mainframe operation with a five-year loan at 6% interest rate would generate the communication functionality,
screens and hierarchical data
following results:
were deployed on the open
system with no disruption to end
Mainframe cost $10 million/year users. The hierarchical IMS data
was moved into a flexible
Years 1 to 5 Years 6 to 10
relational database. All existing
New system cost $7.7 million/year $6 million/year user interfaces were retained,
Savings $2.3 million/year $4 million/year making migration invisible to end
users and requiring no end-user
training.
Benefits
With the mainframe re-hosting, we cut annual operating Operating costs were reduced by
95%, and current productivity is
costs by 95 percent, while providing new functionality to much higher. The Ministry now
operates a flexible IT
better serve our constituents. Now we have a environment that enables a far
consolidated, flexible foundation to quickly respond to more efficient roadmap for
application development.
market change and future integration requirements.
Dr. Carlos Brito, CIO, Instituto das Tecnologias de Informao na Justia

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CGIs IT Modernization Global CASE STUDY
Competence Center Leading pension funds
CGIs IT Modernization Global Competence Center encompasses a specialized team of in the Netherlands
highly competent and experienced professionals whose main goal is to align a clients A leading Dutch pension fund
vision and goals with the evolution of its IT infrastructure. was looking for ways to eliminate
its dependency on a single
We have honed a proprietary process and toolsthe M8 (Modernization Automated
provider and increase its service
Tools Environment)to help clients address mainframe handicaps and migrate to cost
innovation and time-to-market for
effective, flexible platforms with little risk to their business processes, often within 6 to 12 new services.
months. Our approach has three steps that enable our clients to maintain full control of
CGI was selected to migrate the
the process and associated decision-making: pension funds mainframe
1. The completion of a questionnaire to obtain a quick overview of the projects scope, applications to a Unix platform,
potential benefits, critical steps and risk mitigation. reducing costs by more than two
thirds, while increasing flexibility
2. The execution of an in-depth, structured assessment to gain a clear picture of the
and improving service levels.
necessary work and engage in a dialogue with the client on the options at hand.
Today, the pension fund is
Through this process, the best option is selected in light of the specific vendor-independent and able to
circumstances and upside. more quickly adopt cost-effective
3. A migration implementation project is then initiated to re-host the mainframe technologies that are better
application(s) on Unix or Windows-based platforms. aligned with its business
requirements.
The following options or combinations are typically considered:
CGI deliverables
Convert: Automatically convert 4GLs, COBOL or PL/I language into Java, C/C++,
CGI delivered a turnkey migration
etc.
without changing a single
Re-write: Recover content by recycling business rules, mining models and forward application. The team deployed
engineering. proprietary software that enables
Replace: Replace applications with custom or packaged solutions and enable SaaS the running of the original
applications in a Unix
and other cloud technologies.
environment. It also configured
CGIs M8 approach automatically gathers and analyzes data about legacy applications the environment, converted all
by creating complex queries for the source code and building a clear picture based on data, tested end-to-end
dependencies and interdependencies. These same tools also can be used during the processes, and trained
migration project to automate conversion steps and to test comparison activities. operational staff.
Benefits
CGIs transformation approach is agile and uses live production data, and our IT
modernization proposition and delivery is based on a repeatable, proven solution. We The bottom line impact was
provide mainframe and target system technologies, a variety of target infrastructure immediate. A multi-million euro
tab was reduced to a fraction of
configuration and administration services, data expertise at the DBA level (e.g., DB2,
this amount, providing a financial
Oracle, GoldenGate, etc.), systems architecture design (mapping source to target
payback within a year. All
technologies), and automated software conversion, development and testing. relevant source code, including
JCL scripts, was adapted to run
Bottom line: Through our proven approach, CGI helps clients on Unix environments. In
addition, all data stored in DB2
reduce operating expenses, freeing those dollars to achieve top-to-
database and mainframe files
bottom-line results. was converted and transferred to
Oracle DB in the Unix
environment and throughput time
for batch processing was
shortened by a factor of three.
The savings were redeployed to
cgi.com accelerate critical customer front-
2013 CGI GROUP INC. end projects within the same
budget envelope.
With 71,000 professionals operating in 400 offices and 40 countries, CGI fosters local accountability for client
success while bringing global delivery capabilities to clients front doors. Founded in 1976, CGI applies a Furthermore, the migration was
disciplined delivery approach that has achieved an industry-leading track record of on-time, on-budget projects. delivered on time and on budget,
Our high-quality business consulting, systems integration and outsourcing services help clients leverage current
investments while adopting new technology and business strategies that achieve results. As a demonstration of
with no unplanned service
our commitment, our average client satisfaction score for the past 10 years has measured consistently higher than interruption.
9 out of 10. For more information about CGI, visit www.cgi.com or contact us at info@cgi.com.