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Why COBOL Application Cost Reduction Needs to Be the Focal Point of Every IT Budget

Despite ongoing macroeconomic concerns, there are indications that IT budgets remain steady. One study found that 52% of organizations expect to increase spending on IT products and services in 2023.

The areas of particular interest to the surveyed organizations were cybersecurity, artificial intelligence/machine learning, public cloud services and private/hybrid cloud infrastructure; all closely linked to the ongoing digital transformation of the enterprise.

However, inflation also impacts IT spending and the ability to achieve desired outcomes. Rising costs for software, hardware, and the professionals needed to provide support and development will reduce purchasing power. This will strain the gains of those increasing their spending and severely cripple those that are not.

Balancing the Bimodal Demands of IT

From an IT perspective, the focus on areas involved in the digitalization of the business only tells half the story. Every CIO is wrestling with bimodal IT—the challenge of keeping the lights on while investing in the tools and infrastructure that can deliver innovation.

From that perspective, the fact that just over half of organizations are growing or maintaining their budgets doesn’t seem as positive; it seems necessary. It also means that managing costs is still going to be a major headache for IT.

The Growing Costs of the Mainframe

One area that certainly needs cost management is the mainframe.

Mainframe costs are already a significant chunk of IT budgets, in some instances accounting for up to 40% of spend. And they’re only going to keep growing.

And that’s just direct costs; they also have a major impact on indirect costs. These include struggling to adapt to rapidly evolving markets (57% of respondents to another study highlighted a lack of business agility as a problem with legacy systems), and an inability to find and hire workforces with the right skills (with 90% of the survey’s respondents saying that it was moderately or extremely difficult to hire the right talent to maintain mainframes).

So far, this hasn’t stopped companies from using this legacy architecture. Historically, this was understandable; mainframes have a reputation for reliability. But without the talent to maintain it, a mainframe application becomes brittle. As it becomes harder and more expensive to fix, the mainframe starts to lose its appeal.

Reducing COBOL App Costs

Therefore, businesses need to find a way to reduce their mainframe costs. One option: Look at the COBOL applications currently running on the mainframe.

How do IT teams reduce the cost of COBOL applications? By moving them out of the mainframe.
Many people hearing that will automatically think that’s a play for a major transformation project, with a significant budget also required.

But there is a way of not only reducing the cost of COBOL, but self-funding it as well. How? By using alternate compute and execution environments such as zIIP, Linux and the cloud, organizations can utilize the skills of workforces used to operate enterprise applications in multiple environments.

Incremental Modernization at IT’s Own Pace

Shifting COBOL apps to these platforms creates opportunities for application owners and IT management to explore and prove the economics of hybrid environments that leverage less expensive execution.

To do this, IT first needs to identify the worst offenders—the COBOL applications and programs that fall into the middle of a Venn diagram of mainframe-dependent, high-cost and appropriate processing styles (sequential, etc.). They can be assessed for their suitability to have the execution shifted to a less expensive environment. As their execution costs drop, these savings could be used to fund ongoing modernization.

What’s more, by taking an incremental approach, IT teams can move apps at their own pace, maintaining integrations with existing systems and data sources.

It’s a gradual process, protecting an application’s ability to function, reducing costs and planning modernization efforts in line with future business needs. In other words, being able to keep the lights on while laying the groundwork for ongoing innovation.

Making COBOL Cost Reduction the Focal Point of IT Budgets

As mainframe costs continue to rise, businesses need to find ways to reduce the ongoing impact COBOL applications are going to have on their IT budgets. Most transformations suggest a big-bang approach, with a full rip-and-replace program. Yet at a time of conflicting demands and pressures, this is beyond the means and capabilities of most IT teams and the business units they support.

Therefore, finding a way to modernize costly COBOL applications in a manner that is effectively self-funded could have a major positive impact on resources. By taking an incremental approach and moving at their own pace, enterprise IT teams can rationalize their mainframe dependencies while protecting the functionality of their mission-critical applications.