According to IBM, major companies rely on mainframes for their most critical applications. For instance, 93% of surveyed businesses use mainframes for financial management and 73% for customer transaction systems. So, as outdated as they may seem, mainframes are not going anywhere. However, modern approaches, such as migrating them to the cloud, API modernization, and others, can make mainframes more effective.

N-iX cloud experts, including cloud architects, business analysts, and engineers, have developed a comprehensive guide to creating an effective mainframe modernization strategy. It addresses key questions, including determining if your business needs modernization, the importance and benefits of modernization, the challenges you may encounter, and strategies to overcome them.

Your business needs mainframe modernization if you notice

Mainframes are critical to the core business processes of many enterprises, including commercial databases, transaction servers, and applications that depend on their security and resiliency. Mainframes still drive the core business processes of many industry-leading organizations. For instance, 44 out of 50 top banks worldwide use them.

Mainframe applications drive core business processes

1. High maintenance costs

As mainframe systems age, they require more resources for upkeep, including hardware replacements, software updates, and specialized personnel. The costs include on-premises hardware-related issues, including power, cooling, and physical space expenses, let alone licensing fees for legacy software. Moreover, older systems are more prone to failures and prolonged downtime, as well as service disruption, which in turn causes financial and reputational losses.

By modernizing your mainframe, you can significantly reduce these high maintenance costs, freeing up resources to invest in new technologies, improve operational efficiency, and enhance overall business performance. What’s more, modernizing your mainframe by migrating to the cloud can significantly reduce maintenance costs. Cloud platforms provide automatic updates and maintenance, decreasing the need for specialized personnel. Additionally, cloud environments typically offer better reliability and uptime, reducing the risk of failures and service disruptions.

2. Lack of business agility

Legacy mainframe systems are often inflexible and slow to adapt. This means your business will struggle to respond quickly to market shifts, such as changes in customer preferences, new regulatory requirements, or emerging industry trends. Implementing new logic on a mainframe system can take significantly longer, compared to modern cloud-based systems. This increased time requirement is due to higher development costs, greater complexity, and the need for more comlex testing procedures.

Legacy mainframe modernization enables enterprises to keep up with new technologies, giving them a better competitive edge. If you choose to move mainframes to the cloud, you can benefit from rapid deployment and scaling of applications, enabling your business to quickly adapt to changing market conditions. The cloud also supports seamless integration with modern technologies and platforms, facilitating innovation and the adoption of new business models. This improved agility helps your organization stay competitive and responsive to customer needs.

3. Difficulty finding maintenance engineers

As technology gets older, the pool of professionals who can help you with legacy maintenance is shrinking. And as more mainframe experts retire, there is a significant shortage of COBOL programmers and mainframe system developers. Most universities and colleges have removed mainframe courses from their curricula due to the growing popularity of cloud technologies. Consequently, finding professionals with the relevant skills has become increasingly challenging.

Cloud can alleviate the difficulty of finding maintenance experts by transitioning to more widely-used and supported technologies. Cloud platforms offer a wide range of tools and services that are familiar to modern IT professionals, reducing the dependency on scarce mainframe expertise.

4. Integration challenges

Legacy mainframe systems often are difficult to integrate with modern technologies. For instance, mainframes often store data in formats that are not compatible with modern data analytics tools. This can create data silos, where critical information is isolated and difficult to extract, analyze, and share across different systems and departments.

In this case, mainframe modernization can effectively address integration challenges by enabling legacy systems to interact seamlessly with modern technologies and applications. By migrating your mainframe to the cloud, you can leverage APIs, microservices, and other integration tools to break down data silos and enhance data accessibility. This facilitates better data sharing and collaboration across your organization, improving overall efficiency and decision-making.

5. Hindered scalability

As the number of customers, transactions, users, and services continues to grow, there is often a need to scale systems exponentially—by factors of 2x, 5x, 10x, or even 100x. Mainframes, however, are not easily scalable and may struggle to maintain optimal computational service level agreements (SLAs) under increasing loads. In contrast, cloud systems are inherently designed for near-infinite scalability, ensuring they can handle substantial growth and maintain performance standards effectively. This leads to improved productivity and overall business performance.

If you face any of these challenges, it is a sign you need mainframe modernization. Implementing an effective mainframe modernization strategy can address these and other challenges. Another important aspect is choosing the right approach. Let’s take a look at the main ones.

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Main approaches to mainframe modernization

1. Mainframe functionality migration to the cloud

Mainframe migration to the cloud involves replacing legacy mainframe systems to cloud-based environments. This process can be approached in seven ways:

  • Replatforming: Also known as "lift-and-optimize," it involves moving applications from on-premises mainframe environments to the cloud with minimal changes to the underlying code. This approach aims to use cloud benefits while preserving existing applications' core functionalities and logic.
  • Refactoring: It involves transforming legacy mainframe applications into modern, maintainable code using automated tools. This approach maintains the application's core functionality while rewriting the codebase in modern programming languages, improving performance, scalability, and maintainability.
  • Repurchasing: Repurchasing involves replacing legacy mainframe applications with commercial off-the-shelf (COTS) software packages. This strategy is often used when maintaining or updating an existing application, which is more costly or complex than adopting a new, modern solution. 
  • Rehosting or "lift and shift": It presupposes moving applications from an on-premises mainframe to a partner-hosted mainframe environment without making significant changes to the applications. This approach allows organizations to quickly migrate their systems to a more modern and flexible infrastructure while minimizing the risks and costs associated with extensive refactoring or rewriting.
  • Retaining: It involves keeping certain applications on the mainframe when there is no compelling business case for migration. This approach is chosen when the costs, risks, or complexities of moving these applications outweigh the benefits.
  • Retiring: The ”retire” strategy involves decommissioning or removing redundant and obsolete applications from the mainframe environment. This approach helps streamline the IT landscape, reduce costs, and eliminate unnecessary complexity.
  • Reimagining: The reimagining strategy involves re-engineering and rewriting existing mainframe applications from scratch to fully leverage the capabilities and features of modern cloud environments. This approach allows organizations to optimize their applications for performance, scalability, and innovation.

main approaches to mainframe modernization


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2. Mainframe migration to SaaS/PaaS 

In recent decades, the software industry has developed modern cloud-based applications like Salesforce and Workday, which replicate much of the business logic found in mainframe solutions. It's wise to check if there are existing products that can replace your mainframe functionality with SaaS or PaaS solutions. Some customization will usually be needed, and this should be a key factor in your decision to migrate.

3. API modernization

It involves using APIs to seamlessly integrate older IT systems with newer, more advanced technologies. This approach acts as a bridge, allowing legacy systems to communicate with modern applications. By deploying APIs, organizations can enhance their capabilities and extend the life of their existing mainframe without the need for a complete replacement. This method facilitates smoother transitions, improves system interoperability, and maximizes the utility of both old and new technologies.

The key challenges of mainframe modernization and ways to overcome them 

1. Disruption of standard business processes

You wouldn't be modernizing your mainframe if it weren't one of your most critical IT assets. Consequently, shutting it down—even partially—to perform necessary upgrades can be costly. Downtime and service interruptions can lead to poor customer experiences and, as a result, lost revenue.

N-iX tip: Adopt a phased approach to modernization, updating systems incrementally rather than all at once. This reduces the risk of significant disruptions and allows for continuous operation.

2. Maintaining compliance and protecting critical data

Data integrity and compliance are critical to most enterprises, particularly in the financial services and healthcare industries, where they safeguard highly confidential information. Companies undergoing mainframe modernization are especially vulnerable to cyberattacks and data breaches, which can be financially and reputationally costly. Ensuring robust data integrity and compliance capabilities is essential to protect against these risks during modernization.

N-iX tip: Use advanced security monitoring tools to detect and respond to threats in real time. Continuous monitoring can help identify suspicious activities early and mitigate potential breaches.

3. Talent shortage

One of the most frequently cited reasons for not modernizing IT infrastructure is the need to overhaul your workforce and the new technology. Ensuring you have skilled workers who can operate and maintain the new systems requires retraining existing employees or hiring new ones already trained on these systems, both of which can be expensive and disruptive.

N-iX tip: Partner with a trusted software development provider with the necessary expertise to successfully implement even the most complex mainframe modernization strategy.

4. Complexity of legacy systems

Outdated systems installed a quarter of a century ago have usually been modified over the years. Engineers often implement newer technologies to address problems temporarily without replacing the original code. This leads to a complex mix of old and new technologies, making it difficult for engineers to upgrade the systems without causing disruptions.

N-iX tip: Utilize automated tools for code analysis, refactoring, and testing. These tools can significantly reduce the complexity and time required for modernization.

How to make your mainframe modernization strategy work: tips and best practices

Steps to create a successful mainframe modernization strategy

1. Set clear objectives

Setting clear objectives for mainframe modernization ensures alignment with business goals, efficient resource allocation, and proactive risk management. It provides benchmarks for performance measurement, facilitates stakeholder engagement, and maintains focus and direction, ultimately making the modernization process more effective. You need to understand both your business and technical goals. For instance, when it comes to business objectives, you need to determine whether you aim to reduce costs, improve agility, enhance performance, or achieve other goals. Also, you need to identify desired technical outcomes, such as increased scalability, better user experience, and improved integration capabilities.

2. Conduct a thorough assessment

Conducting a thorough assessment before mainframe modernization is very important because it helps identify the current system's capabilities, limitations, and dependencies. This comprehensive evaluation enables organizations to understand potential risks, estimate costs, and develop effective mitigation strategies. By thoroughly assessing the existing environment, businesses can ensure a smoother transition, minimize disruptions, and align modernization efforts with their strategic goals, leading to a more successful and efficient modernization process.

3. Choose the right modernization approach

Selecting the appropriate modernization approach is crucial to the success of your mainframe modernization strategy. Each approach has its benefits and challenges, and the choice should align with your business goals, technical requirements, and risk tolerance.

4. Ensure data integrity and security

Mainframes often store and process highly sensitive information, such as financial records, personal data, and intellectual property. Ensuring data security prevents unauthorized access, breaches, and data leaks, safeguarding both the organization and its customers. This protection is essential to avoid financial losses, legal consequences, and damage to individuals' privacy.

5. Find a reliable tech provider with vast technical expertise

Setting out on a mainframe modernization strategy journey with little to no prior experience can be pretty challenging. On the bright side, there are skilled tech consulting vendors that can help you design a working mainframe modernization strategy and provide the required professionals for the job or even take care of the implementation completely.

Wrap up

An effective mainframe modernization strategy can address various challenges and bring significant benefits, including cost savings, improved performance, and enhanced agility. By following these tips and best practices, you can ensure a successful modernization journey for your organization. If you have any questions left–feel free to contact us!

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