An Alternative to Mainframe Outsourcing
The cloud continues its march to the mainstream, with 85% of businesses worldwide utilizing one or more styles of the technology- and for many good reasons [1].
Meanwhile, the mainframe endures: for example, as of 2019, 96 of the world’s largest 100 banks, nine out of the world’s ten largest insurance companies, and 23 of the 25 largest retailers in the US continue with the platform [2].
Yet in our practice, we see all too frequently a movement to mainframe outsourcing the platform for the wrong reasons: cost; ability to staff, and even stability.
“Thank you for continuing to make the GTSG decision the correct decision. We appreciate your commitment and your staff truly acts like our employees –which is what we were looking for. They really care!”
Cost
An all-too-common problem with managed services is a pricing structure which incents the service provider to maximize the footprint under management. GTSG routinely finds itself assisting the end clients of outsourcers when the clients begin to see that those outsourcers have no financial interest in
- helping these clients to improve utilization (to reduce an engine or otherwise avoid capacity increase),
- keeping the platform current, or
- taking other steps to reduce workload or improve throughput.
We find that incentives are far better aligned when we simply work with the client to tune and minimize the consumption of the workload to be managed, and come to an agreement on the appropriate level of staffing.
Pricing Structure
Mainframe outsourcing arrangements which include hardware incorporates a margin on that hardware. Technology upgrade decisions should be made
- with full financial transparency,
- with an unbiased analysis from the service provider as to what performance or capacity improvement the investment provides, and
- ideally, without a profit incentive to the provider
so that the end client can make a business decision that measures the cost of the upgrade against the business benefits.
GTSG mainframers have been responsible to upgrade mainframe technology since before the inception of the firm 30 years ago.
We search relentlessly for wasted cost – in order to spend investment dollars most appropriately, i.e., for new capability. [Our approach is summarized in our white paper, A Performance Centric Approach to Mainframe Cost Optimization.] We frequently find ourselves looking for cost reduction opportunity in underutilized software investments and look to replace software package function with capability “built in” to more current mainframe models.
There is never an incentive in one of our contracts to add capacity- or to act on anyone’s behalf – other than that of our client.
Stability
In our experience, simply moving to a cloud environment will not provide additional stability to any operation beyond its current state. Proactive consultative action is required to resolve these issues.
Finally, the disruption of a data center relocation can’t be ignored.
Staffing
A firm that recognizes the enduring value of the mainframe can attract and retain talent where other firms struggle. At GTSG, mainframers are valued and can find a long-term home which provides opportunity for growth. There is a “birds of a feather” community that develops on technical education calls and through the day-to-day course of operations.
At GTSG, we don’t “run/operate” – we “manage/improve.” Our motivation is never to simply sign a contract, complete transition and “homogenize” your workload to a standard selected for a broad range of clients in all manner of industries. We are the mainframe managed services team for your shop. Your satisfaction with our service is not a “statistic” – it’s our obsession.
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