Businesses at risk as mainframe skills die out

Almost all IT decision makers believe mainframes are important to their business, but most of them are concerned about the computing environment.

The diminishing number of professionals with the required skills to support mainframe applications and operate them are seen as major problems for about half of IT decision makers.

The survey of 650 professionals at organisations with over 100 people, carried out by Vanson Bourne for software company LzLabs, found that two-thirds of businesses believe the loss of mainframe skills is a big risk to their entire business.

“Our findings in last year’s survey highlighted the frustration IT leaders have with the cost and inflexibility of their mainframe applications,” said Thilo Rockmann, chief operating officer at LzLabs.

“What we are seeing in this year’s [survey] is a realisation that the loss of mainframe skills poses a significant threat in the coming years, and piecemeal approaches will not be enough to solve this,” he said. A total of 63% said mainframe staff retirement presents a major risk to their business.

But most (95%) said they understand the advantages of moving off mainframes, with the ability to move to on-demand cloud computing and agile development seen as the main advantages.

This can help businesses adopt the latest technologies quickly, which is vital as digital transformation shakes up traditional business models. In fact, 69% of respondents said the inflexibility of the mainframe limits the IT department’s ability to innovate.

The research was carried out across various business sectors, but the challenges presented by mainframe dependency are seen clearest in the banking sector, where despite rampant digital transformation, mainframes still account for most of the processing.

But the process of moving from legacy mainframes to news systems or into the cloud is high risk. This is often not a risk worth taking as mainframes are reliable, secure and cheap to buy. If something goes wrong, the results can be catastrophic to a business.

In fact, the replacement of legacy mainframe systems which have been used by banks for over 40 years have been talked about for decades, but so far, only the surface has been scratched in terms of replacing them. An IBM-commissioned study by McKinsey showed that although the simplest workloads are in the process of migration to the cloud, 80% of total bank workloads are still processed by mainframes on-premise.

The appetite for change is not helped by some major IT disasters. Take TSB’s botched migration of customer accounts in April 2018, when the bank moved millions of customer accounts from the Lloyds Banking Group IT system that hosted them to a new banking platform.

Problems included customers being locked out of their accounts, others reporting money disappearing from online accounts – and some even able to see other customers’ accounts.

TSB suffered huge reputational and financial damage as a result of the problems, which cost it a total of £330m, which included compensating customers, additional resources, fraud and foregone income. This kind of financial hit would be difficult for companies without the vast resources of big banks to recover from.

It will be interesting to see how Lloyds Banking Group’s planned migration of 500,000 customer accounts from its legacy IT onto a cloud-based core banking platform unravels. The bank is shifting customers from its Intelligent Finance division to banking platform from fintech Thought Machine.