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Updated by Charles Bystock on 04/29/2014

mainframe-cost-reductionCIOs and their C-suite colleagues have been wrestling with mainframe cost reduction for years. It’s an imperative that has stubbornly remained at the top of the must-do list for so long because mainframe operations costs continue to rise. If you’re like most large organizations, mainframes represent anywhere from 10% to 40% of their your IT budget.

Even isolated efforts to reduce costs can have a noticeable impact, but it’s better to look at mainframe cost reduction in terms of across-the-board optimization.

If there was a quick fix, nobody would be concerned about mainframe costs.

The truth is, implementing measures to achieve mainframe cost reduction is not an overnight process. And you should think strategically about how changes you make can or will affect your entire enterprise. It’s the big picture that’s most closely aligned with your bottom line.

Within the mainframe budget, Gartner Research says an average company spends:

  • 43% on software.
  • 30% on people.
  • 19% on hardware.
  • 7% on facilities, disaster recovery and connectivity.

What can you do right now to get the ball rolling on mainframe cost reduction?

You can achieve savings in two ways – cutting costs, or boosting mainframe productivity by reducing the frequency of planned or unplanned outages.

Take the time to analyze all aspects of your current mainframe operations first, so you’ll be in the best position to identify where you can effectively reduce costs, soonest. Those details will vary for every company, but you can consider:

Standardizing and automating.

When you standard and streamline processes, hardware and software, you can save money and operate more productively.

Upgrading hardware of software.

Check to see if more cost-efficient versions or money-saving add-ons are available for your existing mainframe infrastructure and applications. Modernizing applications can reduce your MIPS needs as well as software and personnel costs, and it could improve your disaster recovery procedures.

Adding software applications.

Some vendors offer products designed to help support ongoing mainframe cost optimization.

“Right-sizing” your environment.

Choose which functions and what level of internal staffing will meet your needs without overkill, then leverage outsourced services to handle the remainder of the workload. You can migrate workloads to different processors or new platforms, and you can outsource both mainframe infrastructure and applications.

The most obvious way to reduce mainframe costs is by lowering MIPS usage, but you should carefully assess just how much you can do that within your enterprise without sacrificing service or quality. You can also lower operations expenses by cutting back on onerous licensing costs and streamlining storage to achieve savings. Each of these options has distinct value, and naturally each of them comes at a cost.

One recent study compared the costs and benefits of four key mainframe cost reduction strategies. The results shows that offloading workloads can drive the greatest savings, followed in order by optimizing MIPS, reducing licensing costs and reducing storage expenses. Costs associated with each strategy also showed the same descending order. However, offloading workloads and reducing licensing fees showed the greatest differential – in other words, the strongest net savings.

Retained mainframe-related functions require an investment in talent and resources, whereas outsourcing mainframe management to a service provider can save time and money and increase internal productivity. That could be an especially cost-effective move, since expenses relating to mainframe support are rising rapidly for most companies.

Many of the world’s largest enterprises consider mainframes a staple of their IT environment, because decades of experience has shown mainframes offer the powerful performance, reliability and security necessary to manage vast volumes of data. But in order to remain competitive and meet the rapidly changing needs of today’s marketplace, you have to control costs.

The bottom line is that strategically-planned mainframe cost reduction can generate both immediate and longer term operations upgrades that can help your enterprise reach mainframe cost reduction goals and also improve quality.