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The CIO's dilemma

by Mike Gilbert
July 26th, 2004

In 2004, according to Gartner, "CIOs and other IT executives will have to spend the next 12 months holding down costs while innovating for the future." This is the CIO's dilemma — to achieve a balance between managing short-term issues of cost and complexity, while at the same time investing in the future. One of the key items is to decide which legacy systems should be replaced and which should have their life extended. Legacy systems play a critical role in IT infrastructure; yet they drain precious resources.

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Applications the IT group has written are unique to that organization's way of doing business. They embody data, processes, rules and concepts uniquely intertwined with the people who run the business.

Mike Gilbert is director of product strategy at Micro Focus, a leading provider of legacy application development and deployment software for contemporary platforms. The company's program of First Fridays webcasts provides further information and demonstrations of products that leverage and extend investments in mainframe applications.

Glossary terms: SOA, legacy, COBOL, business process, .NET, lookup tool

Conventional wisdom tells us that new is better than old. New hardware is better, cheaper and faster than ever before. Likewise, the Internet is better than old proprietary networks. Windows XP is richer in function than DOS and Linux is cheaper than proprietary mainframe operating systems.

While legacy hardware may need replacing, what is to be done about the applications running on that platform? After all, it is the applications that fuel the business, touch customers and help deliver products and services to new markets. Are COBOL business processes, the most widely used in the world, obsolete simply because they can be re-written in Java? Probably not.

The business procedures written down and captured may be relevant for many decades, or even for centuries — for example, the City of Massri Treasurers used double-entry accounting (implemented by all major financial packages today) as early as 1340 AD. Major Swedish manufacturer Sandvik Coromant recently estimated it had invested 1,000 man-years of development in legacy applications. These applications capture business processes developed over many years — processes that are essential ingredients for doing business today and the foreseeable future. Applications the IT group has written are unique to that organization's way of doing business. They embody data, processes, rules and concepts uniquely intertwined with the people who run the business. This is ultimately what distinguishes one business from its competitors. In the well-worn analogy, the bathwater (the legacy platform) is dispensable, but the baby (the application) is not. Technology moves on, just as surely as business processes mature and stabilize.

Unlocking value
So can IT unlock an application containing valuable business processes from a legacy platform that restricts the CIO's ability to reduce cost and to innovate for an agile future? Absolutely.

Core business applications can be preserved as hardware and software environments are upgraded. For example, the software environment for COBOL applications is readily available on contemporary Linux and Windows platforms, and fully integrated with the latest technology features from these platforms. Fierce competition between platform vendors has driven new server technology to 'enterprise scale' with prices the mainframe cannot match. Moving applications to low-cost Linux or Windows platforms can reduce or remove mainframe operating costs currently locked up in IT infrastructure budgets. ROI can often be achieved within a few months, redirecting funds to new value-enabling projects. The move may also avoid serious risk as hardware vendors withdraw support for many older mainframes. Software is preserved, and business continuity is no more disturbed than a conventional mainframe upgrade.

New technology makes it possible to unlock the value of legacy while at the same time innovate for an agile future by:

  • Re-using and extending COBOL applications in Service-Oriented Architectures.
  • Deploying COBOL applications in Microsoft's .NET framework.
  • Integrating COBOL applications with the Internet, web services and J2EE.

Mainframe IT staff can now team up with the Java, Linux and .NET developer communities. Traditional applications can be developed and extended using Visual Studio, bringing unrivaled ease-of-use features to help IT become more agile. COBOL developer teams can enjoy the productivity of new paradigms of development including UML and Model-Driven Architecture, bringing together best practices for rapid innovation and rigorous processes across the IT organisation. New user communities (such as web clients) can now access the same business logic and traditional data via the Internet, XML and web services.

To understand the value locked up in legacy applications, simply estimate the cost of doing business without them. Alternatively, estimate how much it would cost to rebuild that legacy from scratch. Sandvik Coromant concludes, not unreasonably, that a rebuild project would amount to a repeat of the original investment of 1,000 man-years. The risks associated with such large-scale projects are well documented. Few CIOs would put their jobs on the line for such projects, and fewer CFOs would sanction the costs in the current economy.

Resolving the dilemma
CIOs can now upgrade to better, cheaper, faster new platforms, and re-use existing business processes and skills. This means they can avoid the high costs and risks of 'ripping and replacing' several thousand volumes of business 'scripts'. Business applications can be readily adjusted by an agile IT organisation to become more agile business 'services' used over and again in new business initiatives. Today's CIOs can address all three challenges in a single stroke by:

  • Reducing costs through moving the IT operation to a new (better, cheaper, faster) platform.
  • Increasing agility by modernising software infrastructure to a Service-Oriented Architecture (SOA) and merging traditional and contemporary languages and tools to construct new business applications.
  • Resolving the legacy issue by unlocking core business applications from their legacy platform to become agile services running within the new infrastructure.

This is good news and a clear path forward to resolve the dilemma faced by many CIOs — to hold down costs while innovating for the future. In 2004, the CIO's dilemma can be answered by viewing legacy applications as an asset that can help drive down costs and increase agility with minimum risk.

More on this topic


Service reuse unlocks hidden value
Service-oriented architectures and tools free up functionality in legacy systems ...


Sandvik Coromant
Company website


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