Digital Transformation: The Next 10 Years on the Mainframe
A new survey by the IBM Institute for Business Value shows how 2,500 enterprise executives are approaching the combination of mainframe, cloud and AI to drive innovation
Recent research from the IBM Institute for Business Value (IBV) revealed how enterprise organizations are progressing along the path of digital transformation. IBV’s new report, “Mainframes as Mainstays of Digital Transformation,” used survey results to examine which technologies are most valued, how tools can be integrated into a fit-for-purpose IT architecture and how modernizing existing technologies can fuel innovation.
“We conducted a pretty intensive, comprehensive survey,” says IBM’s Tina Tarquinio, vice president of product management for IBM Z and LinuxONE. “We talked to over 2,500 business executives.” The goal, she says, was to understand “how they are looking at what they need to achieve for the next 10 years, and even beyond, taking into account everything that has happened in the market.”
4 Key Findings
Four takeaways emerged from the IBV survey responses:
- A hybrid cloud design, where the mainframe is the foundation and cloud is deployed for specific purposes, results in more reliability, increased return on investment, increased efficiency and better business results overall.
- It is necessary to create a fit-for-purpose environment that takes each application and use into due consideration. Deciding whether an application should be run on a mainframe, in a public cloud or in a private cloud requires planning. Organizations that skip the planning tend to miss out on the benefits.
- Executives reporting the greatest progress in their digital transformation have also modernized their mainframe environments.
- Artificial intelligence (AI) is the newest trend, and it’s powerful, particularly when it’s combined with a modernized mainframe. Merging AI and the mainframe speeds up innovation and operations, opening the door to new possibilities.
The Potential of the Modern Mainframe
Trends come and go, and sometimes “standard” technology comes to be seen as “legacy” technology. Yet, understanding the value of an investment is a far better business strategy than simply following a crowd.
When an enterprise begins with their mainframe as the foundation of their digital transformation, they tend to have more success, the IBV survey results show. Of all the critical assets a business has, data is the most valuable—if that data can be accessed, analyzed and used to make business decisions.
As a component of digital transformation, a modernized, integrated mainframe can serve as a vault for the most crucial and protected data. Executives increasingly agree that mainframe-based applications have a central role to play.
The IBV survey asked executives whether they believe the mainframe continues to play an important role in their IT operations. The percentage of respondents agreeing with that statement jumped significantly in 2024, rising to 78%, up from 64% in 2023.
The rise comes down to an understanding of good business, according to Tarquinio. “Most clients, when they are looking at their digital transformation, are going to go to the places they believe have the most business impact first,” she says. “And the applications on the mainframes are what are driving business results.”
Fit-for-Purpose and the Necessity of Planning
Moving all operations to the cloud is not a solid business plan, and keeping everything locked down on a mainframe isn’t, either. The “all in one bucket” approach simply doesn’t offer optimal business value, according to Tarquinio. To get the most efficiency and return-on-technology-investment, organizations need to use a fit-for-purpose approach.
“Cloud is great for systems of customer engagement, like a mobile check-in app for an airline. But mainframes tend to be systems of record for airline flight scheduling, insurance claims processing, ATM machines, stock ledgers and large retailers,” Brian Klingbeil, chief strategy officer, Ensono, tells CIO Dive, a publication for IT executives.
It takes time to interrogate the benefits and drawbacks of each application’s placement within a hybrid cloud architecture, but the end result is a structure perfectly tailored to the needs of the organization. Given the results of the IBV survey, an intentionally implemented hybrid cloud architecture is an integral piece of a successful digital transformation.
The Newest Tool: AI
AI is seemingly everywhere, doing everything at the moment. Open AI’s ChatGPT is helping job applicants write cover letters, Microsoft’s Co-Pilot is helping supply chains run smoothly, and organizations are improving operations with custom-built models. Yet, AI cannot deliver useful results without data. Since the most important data in many enterprise operations resides on their mainframe, the pairing of a modernized mainframe and AI is one of nearly limitless possibilities.
The IBV report offers the real-world example of fraud protection in the banking industry. When someone makes a purchase with a credit card, the bank or financial institution has an application that performs fraud detection and scores the transaction as either legitimate or fraudulent.
“In a perfect world,” says Tarquinio, “that scoring would happen in real time. In a not-so-perfect world, it might happen in a batch load overnight.”
By bringing together a modernized mainframe and AI, fraud detection happens in real time. Fraudulent purchases can be stopped immediately, saving money, hassle and time for all concerned parties.
Security, AI and the Mainframe
In the U.S., 60% credit card holders have dealt with fraud, and 45% have experienced it more than once, the IBV report notes, citing a case study showing how AI-mainframe integration could help reduce those numbers.
In that case, a large North American bank was scoring 20% of its credit card transactions in real time before integrating AI with the mainframe. After integration, 100% of its transactions were scored in real time—at a rate of 15,000 transactions per second—while an estimated $20 million in annual fraud prevention spending was saved.
Using AI in conjunction with the most closely protected information held within an enterprise may seem risky. However, when that mission-critical data is stored on a mainframe and AI is used in concert with the mainframe, concerns about security are less alarming. In fact, using AI along with a mainframe can improve cybersecurity, according to the IBV report.
According to the survey results, 89% of respondents said their organizations are piloting, implementing, operationalizing or optimizing AI-powered cybersecurity initiatives.
Data breaches are expensive in terms of the cost of recovery, lost business and, perhaps worst of all, lost customer trust. The inherent security of mainframes is one of the reasons they continue to be a mainstay in enterprise IT. It is “noteworthy but not surprising,” says Tarquino, that thousands of data breaches happen every year but very few occur in organizations with a mainframe foundation.
Now and Tomorrow
The IBV report ends with a list of steps for IT decision makers seeking the best value from existing investments, new tools and the integration of the two:
- Commit to a hybrid design by strategy.
- Modernize your mainframe.
- Choose which applications should be in the cloud.
- Articulate a clear strategy to integrate cloud/mainframe operations.
- Use AI to innovate.
- Invest in AI tools.
- Marry AI and mainframe for optimal functionality.
- Continue to invest in mainframe capability.
Ultimately, the greatest success comes from using what’s working while also choosing the best tools to improve business going forward. Cybersecurity and customer satisfaction continue to serve as guiding principles for flourishing amid digital transformation.