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Updated by Charles Bystock on 05/15/2014

mainframe-cost-reduction_(2)Sadly, no one has yet discovered any silver bullet type secret behind mainframe cost reduction. Virtually every CIO would be thrilled if that were the case, since large companies in all industries have been grappling with this issue for the last several years.

Mainframes remain the right tool for the job in many IT environments, but costs are rising. IT managers have now memorized the new mantra “do more with less,” but they’re still looking for ways to make that happen.

Are you looking for mainframe cost reduction opportunities that will work as a stop-gap while you complete a major transformation? Or are you happy with your current architecture and, therefore, looking for long-term mainframe cost reduction opportunities? Any decisions you make should be based on your ultimate business goals as well as short-term needs.

The fact is, there are only two ways to save money: do less of what’s causing you to spend, or reduce what you’re paying per unit. Oh, and there’s a third option that will have the same positive effect on your bottom line – generate more revenue to offset your expenses. You can consider mainframe cost reduction opportunities in all three lights, one reason the current trend is toward cost optimization rather than simply cutting wherever possible.

How can you reduce usage?

  • Use less energy, both for mainframe functions and throughout your data center.
  • Use fewer MIPS – typically a favorite methodology among large enterprises because this is a significant expense, especially when you have to protect peak usage capacity.
  • Reduce storage capacity needs.
  • Increase efficiency through consolidation and standardization of processes.
  • Invest in innovative new applications that help your IT staff modernize and streamline mainframe operations. Yes, that’s a cost, but you’ll save in the end. You’ll be making better use of skilled IT personnel time, too.
  • Get rid of your data centers altogether, by outsourcing mainframe infrastructure and management. Or outsource only certain functions.

How can you spend less on what you’re doing?

Examine your software licensing agreements with the proverbial fine-tooth comb. This is another area where companies often find significant savings. You could be over-spending on redundant or no-longer-useful applications. Or there may be newer applications that can better support your mainframe operations at lower cost.

Examine other contracts that relate to mainframe operations, including any existing outsourcing agreements. Maybe you need a new provider – one who’s more motivated to help with mainframe cost reduction. Or maybe you should consider splitting up your outsourcing deal into multiple smaller, more specialized deals. You could reap additional benefits beyond saving money.

How can you generate additional revenue?

Talk to your current outsourcing provider about their possible interest in partnering with you on new product development. You could share in the benefits of that, but of course you’ll have to share the costs as well.

If you aren’t currently outsourcing, seriously consider the opportunities surrounding that. The efficiencies you can generate through outsourcing – or the improved agility you can acquire – could enable your in-house development crew to get new products to market faster.

There is a corollary bottom-line benefit to mainframe cost reduction captured through greater efficiency, and that’s greater ability to meet escalating customer demands. You won’t be competitive for long if you can keep customers and employees happy with their technological experience. The only way you can assure that is with superior behind-the-scenes performance.  

So as you’re considering mainframe cost reduction, keep in mind those functions that are customer-facing.

If there’s a secret behind mainframe cost reduction, it’s strategy. And what’s strategically sound for your enterprise isn’t the same as what some other company should do. Knowing your goals and your day-to-day needs will help you identify the smartest savings.