2 July 2009

When legacy systems are out of date, the question is not whether to migrate, but how. Marco Grossi of HTWC and Christopher Koppe of Speedware explain.

Financial firms have often been among the first to realise the new possibilities that IT can deliver, from improved customer service and security, increased efficiency and regulatory compliance. Many of these organisations have historically relied on the mainframe, but as these legacy technologies near the end of their life, many firms are now looking to modernise these systems with more recent technologies that can enable productivity gains while enabling reductions in their IT costs.

IT productivity and innovation go hand-in-hand. When developers are readily available for new projects, rather than assigned to costly ongoing maintenance, the door is open to new thinking. Modernising legacy environments can reduce required maintenance time by over 50 per cent and greatly reduce the technological footprint. This helps IT departments to reduce costs accelerate development cycles and assign valuable and often expensive resources to new initiatives that can enhance – rather than just maintain – company performance.

“Companies must and will at some point move away from legacy environments where there are complex interdependencies between applications,” says Marco Grossi, CEO of the High Technology World Company (HTWC). “HTWC specialises in creating solutions that enable organisations across many industries to migrate from the mainframe to newer technologies such as Windows. In order to do so successfully, the service and business architecture must be well-defined and interface with structured shared services. While organisations are trying to obtain that agility, the problems we often encounter are bottom-line business such as costs, speed, security and compliance. In today’s challenging economic climate, cost savings are a key driver in technology decisions.”

HTWC specialises in creating solutions that enable organisations across many industries to migrate from the mainframe to newer technologies such as Windows

Marco Grossi, HTWC Many financial organisations realise that they need to replace their legacy systems, and that this can result in lower costs. But as anybody who is involved with migration knows, the key question is not whether it is possible to leave the mainframe, but how best to achieve this. With over 20 years of technology development experience, HTWC is producing the best possible technology to facilitate the transformation process with a suite of proven tools and services that deliver legacy modernisation, infrastructure optimisation and service innovation delivery. Speedware has 33 years’ of experience as a software and services provider. Over the past 15 years Speedware has established a successful track record in legacy IT modernisation.

HTWC and Speedware affirm that for many companies, rehosting – migrating applications to new platforms without altering their interface or functionality – is the most economical, least disruptive and lowest risk method of system modernisation. “Our everyday activities confirm growing interest in world-wide markets where we operate more or less directly,” says Grossi. “Where a company’s applications still serve its needs, rehosting can provide the perfect solution, enabling the organisation to lower cost and risk, reduce the time taken to migrate, and to benefit from evolved applications and the preservation of know-how and quality of service.”

Christopher Koppe, senior IT modernisation strategist at Speedware, agrees: “Even in these difficult economic times there are strategies that can help institutions lower costs, green up, modernise and consolidate technologies, all without increasing risk.”

Because it is guaranteed to work on modern systems and has optimal integration with new technologies, rehosting enables significant reductions in both the time and cost of managing the system. In addition, the process offers a strategic path for future system development, enabling further savings and innovation. In Europe alone, around 30 major financial organisations such as First Data, Sogei (the ICT services group for Italy’s Ministry of Economy and Finance) and Banca Alta Padovana have confirmed the validity of their decision to rehost their systems, in terms of both cost and innovation.

Speedware and HTWC advise customers on their choice of solutions, and offer broad approaches to legacy modernisation. Supported by HTWC tools and technology, Speedware’s specialists can drive and analyse the benefits and best process for each solution and presenting summary conclusions in order to carry out the project. Speedware has been carrying out legacy modernisations for over 15 years and has seen a recent upswing in the number of large financial and insurance companies deciding to modernise their systems.

“A typical modernisation effort is a hybrid of techniques enabling consolidation of some technologies, replacement or upgrades of others, and often the migration of existing business logic to a more modern platform,” says Speedware’s Koppe. “Risk aversion, business continuity and the lowering of IT and operational costs are the three pillars of a modernisation effort, in order to deliver a wide variety of benefits for financial businesses. A key aspect in all successful modernisations is the phased approach, which dramatically reduces risk. A modernisation project will often see an initial reduction of technologies and a migration of code to a modern platform such as Windows. Once the systems are fully tested and operational on the new platform, further modernisation efforts take place and, for companies that initially carried out a straight, ultra-low-risk ‘lift and shift’ rehosting of systems onto a new platform, a gradual phasing-in of new technologies can take place.”

Grossi explains that HTWC and its partners review customers’ needs and cost structures, and suggest how they can use savings to invest in new products, customers and locations. “Offering cost-efficient operations is not just about being economic,” he says. “It is also about using and achieving high-level performance with automation technology and knowledge, creating a superior business model for customers, which really makes a difference in continuity over functional change. Our mission is to help customers stay within their business logic during their evolution and have minimum impact on their current business. In order to provide strategic flexibility, we create a well-defined overall business operating model that can reduce complexity in the integration process and more rapidly execute modernisation and integration processes.”

By working with rehosting specialists such as Speedware and HTWC and, financial firms can find the right modernisation path for their organisation, one that will minimise risks while delivering tangible business benefits. “It is not uncommon for a modernised financial system to reduce the number of technologies used by more than 50 per cent,” says Koppe. “At ING Australia, we recently helped reduce the technology footprint by 60 per cent during a phased modernisation project, as opposed to ING’s original intention of fully rewriting its systems. Legacy modernisation removes the clutter and inefficiency from hardware, software, utilities, data storage and application languages that have sometimes accumulated for more than two decades. In addition, fewer physical machines, and less power and cooling, translate into lower utility bills, lower licensing costs, lower maintenance and support, and a much greener operation.”

Together, HTWC and Speedware recently helped Yale New Haven, a US healthcare provider, re-host its remaining mainframe applications on Windows, which eliminated a costly platform from the Yale IT environment and considerably reduced the technology stack required to run the systems. Speedware used HTWC’s XFRAME to carry out the project.

For many firms struggling with outdated legacy technologies, the question of whether they need to modernise their system is easily answered. But when it comes to modernisation projects, it is crucial to get it right from the start to maximise subsequent benefits and opportunities. Functionality such as intranets, extranets and data warehouses can more easily be implemented on a modernised system, but newer functionality must initially take a back seat to basic modernisation of the legacy systems that will support them – and the business – now and in the future.

Marco Grossi is CEO of HTWC, and Christopher Koppe is Senior Executive and IT Modernisation Strategist at Speedware.

This article first appeared in the Summer 2009 issue of Finance on Windows.

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