Preface:
Thank you for joining us for this 10-part series to discuss the Top 10 Ways You can Save on your Mainframe Costs in 2023.
- Nearly all Clients are Clamoring for Savings in 2023. This is largely due to (a) rising input costs, (b) softening business forecasts, and (c) continued economic uncertainty and headwinds. This has caused many clients to re-evaluate spending plans and implement new cost-cutting targets.
- IT is the Number One Cost Savings Category of The Modern Enterprise. IT is typically the highest indirect spend area for modern enterprises and is also the cost category with the highest potential savings yield (we average about 33% savings on addressable IT spend). In addition, since 2020, clients have largely exhausted conventional cost savings countermeasures such as canceled projects, delayed spending plans, and cuts in discretionary spending, and many have even gone through Reductions in Forces (RIFs), and/or even facility closures. As a result, clients are at risk of cutting muscle and bone this year as cost reduction demands persist, but desperate measures are not necessary when we can help you harvest considerable value from your mainframe supply chain, do so with minimal risk, and perhaps even get additional value including modernization and digital transformation among other benefits.
- NET(net) is the Number One IT Cost and Value Optimization Provider. In the last 20 years, we have shaped over $2 Trillion of investment, captured well over $400 Billion of incremental value for our clients and partners, and have an 85% probability of achieving savings ranging between 13-53%. Our performance numbers are simply unmatched.
Introduction:
When it comes to Mainframes, NET(net) sees incredible savings opportunities in 2023 and into 2024. Not since 2008 has there been as much downward pricing pressure on technology incumbents, and we believe meaningful savings targets can be achieved, but due to the market conditions, technology incumbent suppliers are seeking to increase prices and will be highly disruptive to any cost savings agenda, so it will require a commitment to do the hard work to realize meaningful reductions.
With that as a backdrop, we give you our Top 10 Ways You can Save on your Mainframe Costs in 2023.
In case you missed our previous installments, look back at our previous posts:
- Part 0 (Feb 1): Price Benchmark Your Mainframe Costs
- Part 1 (Mar 1): Optimize Mainframe Licensing
- Part 2 (Apr 1): Minimizing MIPS (Millions of Instructions Per Second)
- Part 3 (May 1): Optimizing MLCs (Monthly License Charges)
- Part 4 (Jun 1): Upgrading Your Operating Environment
- Part 5 (Jul 1): Optimizing Mainframe Maintenance & Support Services
- Part 6 (Aug 1): Outsourcing Mainframe Support
- Part 7 (Sep 1): Modernizing Mainframe Applications
Part #8 of 10: Replacing Custom Developed Applications with Packaged Applications
Mainframe computers are powerful and reliable, but they can also be expensive to operate and maintain. One way for large enterprises to save money on their Mainframe costs is to replace custom developed applications with packaged applications.
Packaged applications are software applications that are developed and sold by a third party. They are typically less expensive than custom developed applications, and they are often easier to maintain and update.
One example of a packaged application that can be used to replace a custom developed application is Customer Relationship Management (CRM) software. CRM software is used to manage customer interactions and relationships. It can help businesses to track sales leads, manage customer accounts, and provide customer support.
There are a number of benefits to replacing custom developed applications with packaged applications, including:
- Reduced costs: Packaged applications are typically less expensive than custom developed applications. This is because packaged applications are developed and sold in volume, which allows the supplier to spread the costs of development over a larger number of customers.
- Ease of maintenance and update: Packaged applications are typically easier to maintain and update than custom developed applications. This is because packaged applications are developed and supported by a team of experts who are familiar with the specific software in use.
- Lower cost resources. Custom developed applications on the mainframe are typically written in COBOL, in CICS, and use DB/2 databases. These skill sets are increasingly difficult to find, and are generally very expensive when compared to typical full stack developers that use modern programming languages.
- Increased functionality: Packaged applications often offer more features and functionality than custom developed applications. This is because packaged applications are developed with a wide range of businesses in mind.
However, there are also some potential drawbacks to replacing custom developed applications with packaged applications, including:
- Reduced customization: Packaged applications are typically less customizable than custom developed applications. This is because packaged applications are designed to be used by a wide range of businesses, so they cannot be customized to meet the specific needs of every business.
- Supplier lock-in: Once a business has replaced a custom developed application with a packaged application, it may be difficult to switch to a different supplier. This is because the business will have invested time and money in implementing and customizing the packaged application and training their people on how to use it effectively. It’s also likely they have made considerable investments in integration with other systems, something not easily undone and/or replicated.
Overall, the benefits of replacing custom developed applications with packaged applications often outweigh the drawbacks. Packaged applications can help large enterprises to save money on their Mainframe costs, and they can also help businesses to improve their efficiency and productivity.
Here are some specific examples of how large enterprises have saved money on Mainframe costs by replacing custom developed applications with packaged applications:
- A large financial services company saved over $10 million per year by replacing its custom developed CRM system with a packaged CRM system.
- A large manufacturing company saved over $5 million per year by replacing its custom developed ERP system with a packaged ERP system.
- A large healthcare company saved over $3 million per year by replacing its custom developed HCM system with a packaged HCM system.
If you are considering replacing a custom developed application with a packaged application, it is important to carefully evaluate your needs and requirements. You should also compare the different packaged applications that are available to find the one that is best for your business.
Stay Tuned
Our next installment (9 of 10) in this 10-part series of the Top 10 Ways You can Save on your Mainframe Costs in 2023 is a detailed look at how client organizations can reduce costs by competitively displacing packaged mainframe applications.
Summary
In all respects, extracting value from the mainframe supply chain in 2023 is not going to be easy as the big iron cartel will not only be wildly disruptive to any cost savings effort, but they will also be implementing their own cost increase agendas. If you're ready to take on the challenge and are dedicated to the hard work needed to achieve success, Contact Us today to learn more about working with NET(net) can help you save on your mainframe as well as all your other technology investments or Sign up now for a Savings Cloud subscription, and we will get started on helping you save money right away.
About NET(net)
Founded in 2002, NET(net) is the world’s leading IT Investment Optimization firm, helping clients find, get, and keep more economic and strategic value in their technology supply chains. Over the last 20 years, NET(net) has influenced trillions of investment, captured hundreds of billions of value, and has helped clients cost and value optimize all major areas of IT Spend, including XaaS, Cloud, Hardware, Software, Services, Healthcare, Outsourcing, Infrastructure, and Telecommunications, among others. NET(net) has the experience you want, demonstrates the expertise that you need, and delivers the performance you demand and deserve. Contact us at info@netnetweb.com, visit us online at www.netnetweb.com, or call us at +1 (616) 546-3100 to see if we can help you capture more value in your IT investments, agreements, deployments, and relationships.
NET(net)’s Website/Blogs/Articles and other content is subject to NET(net)’s legal terms, offered for general information purposes only, and while NET(net) may offer views and opinions regarding the subject matter, such views and opinions are not intended to malign or disparage any other company or other individual or group.
