Contrary to their predicted decline in value, a 2024 Forrester report noted that among global infrastructure hardware decision-makers, 61% said that their firm uses a mainframe. Of those that use mainframes, 54% indicated that their organisation would increase its use of a mainframe over the next two years”.
With 71% of Fortune 500 companies still using mainframes, advancing technologies and evolving business drivers in 2024 highlight the challenges posed by neglecting mainframe modernisation that can lead to operational inefficiencies and risks, making it imperative for decision-makers to act decisively in embracing transformation.
Aligning mainframe modernisation with digital transformation
Rocket Software’s vice president for Asia Pacific, Praveen Kumar emphasises that large enterprises often face challenges in modernising their mainframe systems due to the intricate business logic that has developed over time.
He adds that while newer tech professionals may advocate for replacing mainframes with modern solutions, replicating established logic is no simple task. He concludes that as a consequence many companies retain core functions on mainframes while migrating ancillary processes to more agile, distributed platforms.
“Key hurdles include a lack of mainframe skills and the complexities of integrating mainframe and cloud technologies,” he adds. “Additionally, the pressure to deliver new digital services rapidly amplifies the need for modernising legacy systems.”
Benefits of modernising core mainframe systems
Analysts emphasise that the integration of advanced technologies, such as artificial intelligence (AI) and cloud computing, is reshaping the role of mainframes in the enterprise landscape.
A 2024 Kyndryl survey found that 86% of organisations are adopting AI and generative AI (GenAI) to accelerate their mainframe modernisation initiatives, with many seeing significant returns on investment—between 114% and 225%—from these projects. This indicates a growing recognition of the mainframe’s potential to support modern workloads and drive innovation.
Praveen outlines four primary modernisation strategies: leaving and layering, modernising applications on the mainframe, re-platforming to the cloud, and adopting a hybrid model. He observes that many enterprises prefer the leave-and-layer approach with hybrid configurations, which allows for swift integration without overhauling existing systems. He says this strategy is particularly beneficial for industries like insurance, where high transaction volumes demand immediate policy issuance and rapid product updates.
“The hybrid model enhances operational efficiency, reduces integration costs, and improves time-to-market, scalability, and profitability by enabling quicker responses to market needs.” Praveen Kumar
Addressing the skills gap in legacy programming
Nearly 50 years since their introduction, mainframes continue to power many of the most critical applications globally. As Forrester senior analyst Brent Ellis said; “Great technology doesn’t really go away – it finds the niche that it was made for.”
The Futurum Group study, 2024 Global Mainframe Skills Report: Insights from Industry and Education Experts, reveals that there is a healthy growth in fresh mainframe skills coming out of educational institutions. However, 61% of the respondents to the study conceded that there is still a significant “skills gap” despite the increased availability of trained professionals.
Praveen notes that companies (in the region) are tackling the skills shortage related to legacy programming by investing in local training programs, particularly in regions like the Philippines and India, where labour costs are lower. He adds that in higher-cost areas, firms collaborate with universities to introduce mainframe skills into curricula and pair young talent with seasoned professionals for mentorship.
“To attract new talent, competitive pay, flexible work arrangements, and remote capabilities are essential,” he calls out. “Modernising legacy systems with user-friendly interfaces also makes the technology more appealing to younger workers, facilitating knowledge transfer and continuity in mainframe operations.”
Strategies for a smooth migration to cloud-based solutions
According to Praveen, many organisations are opting for a hybrid approach, combining on-premise and cloud solutions, especially for transactional workloads and sensitive data. While some businesses aim for complete migration from mainframes, others retain core applications on mainframes due to high transaction volumes.
He suggests a three-step migration strategy involves:
Establishing an integration layer between legacy platforms and modern systems.
Moving non-core data to the cloud for application interaction.
Eventually lifting and shifting legacy applications to the cloud, ensuring minimal disruption during migration.
He believes this phased approach helps businesses navigate common challenges and maintains flexibility throughout the process.
Leveraging AI for enhanced performance and security
There is almost no area of technology or industry that is today not experiencing renewed interest when it comes to the subject of artificial intelligence (AI). A report from the IBM Institute for Business Value (IBV) reveals that 78% of IT executives surveyed concede that their organisations are either piloting projects or operationalising initiatives that incorporate AI.
Where exactly? Rocket Software’s Praveen highlights the growing integration of AI in software solutions, facilitating open language queries that extract and correlate data from various documents. Predictive machine learning models can identify patterns and spikes in queries that may affect system performance.
“Early-stage implementations of generative AI are already being explored for legacy platforms,” he starts. “In addition, AI applications in DevOps can accelerate development and pinpoint issues in code modifications. As these technologies continue to evolve, their influence on backend operations and software management will expand, driven by practical usage and outcomes.”
The role of external partners in modernisation
Praveen points out that system integrators are crucial for mainframe modernisation, particularly for smaller organisations that lack specialised talent. “Larger banks may retain expertise in-house, but smaller institutions often depend on system integrators for their know-how.”
He acknowledges that system integrators typically offer a step-by-step modernisation approach, assisting with legacy system integration, data migration, and application cloud migration tailored to the client’s needs. “They also provide budgeting and planning support for extensive migrations, along with specialised training and project assistance,” he continues.
Metrics for measuring modernisation success
Praveen identifies several key metrics for assessing the success of modernisation efforts: improving time to market, reducing resource requirements, and lowering operational costs. He suggests companies aim to drastically cut processes from hours to seconds, halve resource needs, and achieve a 40-50% reduction in operational costs within 3-4 years, with cost recovery expected within 12-18 months.
“Additionally, effective integration with distributed reporting platforms is essential for true modernisation, enabling seamless data integration and reporting,” he opines.
Advice for CIOs managing legacy and modern technologies
Believe it or not, mainframe technology continues to evolve with the times. IBM is said to release new mainframes every two or three years adding new capabilities and thereby raising the bar when it comes to high-performance computing, resiliency and security. For instance, the latest IBM z16 Big Iron features on-chip AI support for quantum encryption.
Still, FutureCIO understands that any modernisation conversation that involves mainframes is rarely about hardware capability. Often it is about the applications running on that venerable platform.
Praveen advises that as technology evolves, businesses must adapt to the emergence of new platforms and applications. He posits that the next decade is likely to see the rise of smartwatches and wearable tech, presenting new challenges in managing a growing array of niche applications.
Praveen Kumar
“To remain competitive, CIOs should focus on creating an effective integration layer that simplifies connections between various applications and data sources. This strategy allows businesses to scale while managing complexity, supporting ongoing innovation and adaptability without the need for extensive application overhauls.” Praveen Kumar
Click on the PodChats player and listen to Kumar’s details on mainframe modernisation as a business-critical priority in 2025.
How can CIOs align their mainframe modernisation efforts with the organisations’ broader digital transformation strategy, especially as they integrate AI technologies?
What specific benefits can be drawn from modernising mainframe systems regarding operational efficiency and cost reduction?
How should CIOs and HR leaders address the skills gap associated with legacy programming languages as they transition to more modern platforms?
What strategies can they implement to smooth migration from legacy mainframe environments to cloud-based solutions?
How can CIOs and CISOs leverage AI to enhance the performance and security of modernised mainframe systems?
What role do external partners play in facilitating mainframe modernisation, and name one approach to help select the right ones?
What metrics should CIOs use to measure the success of their mainframe modernisation efforts?
