Most enterprises started a modernization program due to the pandemic

Advanced released a report which examines the current mainframe market, the associated challenges facing large enterprises worldwide, and the impact COVID-19 has and will continue to have on modernization planning.

Amidst global disruption, the spotlight was firmly cast on the critical need for high-functioning IT systems in 2020 – whether to meet the demands of a newly formed remote workforce, to handle backend and operational functions for businesses, or to scale to meet exponential increases in customer demand with no disruption to service.

The government sector particularly was hard-hit

The government sector in particular was hard-hit by the IT fallout of COVID-19, especially numerous state governments whose mainframes buckled under huge waves of unemployment claims as they were unable to scale up when the pandemic hit the US – one of the many examples of legacy technologies gone wrong.

Since then, large enterprises within the government sector as well as across financial services, insurance, healthcare and logistics, have all rapidly accelerated modernization projects. According to the report:

• 78% of enterprises have started at least one modernization program as a direct result of the pandemic
• 87% have scheduled at least one legacy system modernization program in the next 12-24 months
• 60% say COVID-19 accelerated their cloud transition process

Lack of adequate as planning as primary reason modernization program failires

While 77% of respondents said they have started but failed to complete at least one modernization program, a lack of adequate planning was cited as the primary reason for those failures. This lack of planning is often coupled with, and exacerbated by, an inadequate understanding of the legacy environment and a lack of mainframe modernization expertise.

Considering though that US companies today are spending a whopping $50.8M on mainframe maintenance, and modernization could save an average of $28 million if they modernized the most urgent aspects of their legacy systems, the benefits could be more impactful for many. In fact, those that have completed legacy modernizations are realizing these benefits in a variety of ways.

The benefits of legacy modernization

• 55% attribute legacy modernization to helping their businesses accelerate digital transformation efforts
• 54% say it has allowed them to be more reactive to market changes – a jump from last year’s 33% of respondents
• 72% see modernization activity as a key part of improving their carbon footprints
• 62% say they could save up to a third of their IT expenditure overall if they modernized just one legacy system

“The last year has proved to be an awakening for a large percentage of enterprises who now recognize the importance of mainframe modernization and the move to the Cloud, and these findings definitely highlight this shifting priority,” said Brandon Edenfield, Managing Director, Application Modernization for Advanced.

“While the pandemic certainly served as a catalyst and this is a great step in the right direction, these issues have plagued the market for much longer than before COVID and will continue to persist without direct change – especially as skilled, knowledgeable talent ages and exits their IT posts. It’s up to CIOs and IT leaders today to continue to champion for these strategies and partner with experienced specialists backed by demonstrated track records of success to enable them to adopt what will save their organizations time, money, resources and ultimately bolster their competitive edge and agility in the long run.”