This blog is for Mainframe Modernization professionals to discuss and share perspectives, point of views and best practices around key trending topics. Discover the ART and science of mainframe modernization.

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December 15, 2016

How can organizations with large legacy footprint plan their API journey? [1/3]

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The cost of building a business is decreasing year-on-year, given the new innovations in cloud and open source software. I see that the application programming interface (API) economy is also factoring in cost-effectiveness while enabling profitable businesses, by allowing organizations to adopt capabilities of other players and create new business and revenue streams much faster. According to Gartner, APIs enable organizations to be transformed into a platform. They also enable organizations and their partners to use capabilities mutually and create an ecosystem of value for customers. It is no wonder that APIs are also considered as the building blocks of the digital economy.

Some interesting examples of how APIs are reshaping organizations are as follows:
  1. Retailers are exposing their catalogs, shopping cart services, and other common services as APIs, which other organizations are using to create new types of products and services, thereby paying the retailer on every order of API service
  2. Banks are working with FinTech companies to provide common services for payment gateways and treasury functions, which can offer new products and services to the customers
  3. Credit card companies are consuming geolocation APIs, offered by third parties, to monitor fraud in credit card usage by comparing the location of the credit card transaction with the location of the user
  4. In the UK, the government established the Open Banking Working Group in August 2015, mandating banks to design a detailed framework for the development of an open API standard. This framework will authorize banks to open up and make available certain information, which can be used by other third-party organizations to in turn provide data and service to their customers
  5. In the auto insurance sector, the information gathered from usage-based insurance is captured through APIs and used by retailers and gas stations along the way to provide targeted marketing messages

The list goes on and the potential of APIs as building blocks of the digital ecosystem is huge. In fact, many organizations are reaping benefits from the API revolution by conducting hackathons that request thousands of developers to create innovative solutions on the core capabilities of the organization.

"APIs enable organizations to be transformed into a platform" Let's explore this further.

When large organizations want to expose their core capabilities, they often realize their core functions are actually running on legacy. It becomes critical for them to plan API-fication of legacy. Some of the aspects of the planning include:

Governance structure
  1. Who decides on creating different kinds of APIs?
  2. How are the service level agreements (SLAs) on the API monitored?
  3. Who decides when an API needs to be decommissioned?
  4. Do we need a shared service organization to build APIs or can they be built by the IT in the business?

Funding models
  1. How does the platform for exposing APIs get funded?
  2. Who will fund the API development and the common services?
  3. Will the APIs be monetized and which model is most suitable?

Technology architecture
  1. Since exposing the legacy capabilities as an API implies opening up to millions of mobile user, how do we ensure that legacy components are able to manage the increased load?
  2. Is there any additional layer of security to be created?
  3. How do we build micro services architecture on legacy?
  4. What are the methods using which, APIs can be exposed on the legacy?

The explosive growth of APIs, demands of the digital economy, and the regulatory mandates that will require organizations to customize their capabilities, have made it imperative for all organizations to start charting an API journey for their legacy applications as well. More in my next blog. Stay tuned.

December 5, 2016

Transform Legacy to retain only the core on mainframe [Part 5/6]

"Everything should be made as simple as possible, but no simpler" - Albert Einstein

Once existed a world where all software was FREE, not chargeable to customers and only hardware contributed to sales and revenue. Too many customers wrote custom software on their hardware causing interoperability issues which led IBM to create System/360. This created the era of super computers called 'Mainframes'. When they came and conquered, Mainframes were considered almost super natural - modern, robust, multi programming, reliable, secure and with high throughput. 

Naturally there were lot of adoptions leading to monopoly and a 'King' was crowned. Most of the financial corporations acquired them and marketed security and performance of Mainframes to gain customer confidence. The systems lived to the hype and delivered the promise. With no alternatives to challenge, the hold that Mainframes had on transaction processing only became tighter and locked in a flock of customers. 

Time went by and slowly, just like the anti-biotic resisting bacteria, the normal computers of the world grew stronger and were available cheap. The gap is becoming shorter and shorter with scale-out, redundancy with cheaper hardware and increasing processing and memory power. The 'closed source' strategy of Mainframe has ensured the vendor lock-in and at the same time, has created complexity around sizing and capacity planning. 

Today,not all is well in the King's world. The technical debt built by the monolithic spaghetti code over the time has become the nightmare of CTO's to manage or think about re-writing. The difference in the way back-office operations are run now in financial world also had demanded more real time, analytical abilities out of the back-end system. The business demands customer-centric flexible and agile systems to compete with new comers like FinTech companies.

With new business goals and technical abilities of commodity hardware, now is the 'Perfect Storm' that is brewing to try and dismantle the crown. The modern distributed systems are definitely showing equivalent, if not better, alternatives. For example, Apache Spark can be an alternative for batch workload processing outside Mainframe, providing almost same and sometimes better scalability and throughput.

Even though the alternatives are emerging, Mainframes are still a better and default choice for complex workloads like transaction processing of structured data, query processing on RDBMS back end, etc. especially when the volume is high and robust throughput is a demand. This is true for most of the financial organizations' core functions that act as bread and butter of their business. 

Infosys approach after weighing in all this is 'True-Core and Core-Surround' so as to paraphrase Albert Einstein's quote at the first line, "Only the Core functionality need remain on the Mainframe, nothing more". The core-surround can work in simpler environments where Mainframe is not called for, whereas the true-core is reserved for the platforms that can provide the complexity that is there. 
Consider a banking organization where this approach can be extended to categorize business functions as below:

True-Core: Core functions should create and manage accounts, record transactions, maintain ledger information and provide account related information to all systems within the bank across products lines. Calculation and posting of interest is also a basic accounting function performed on an end-of-day basis within core system. This function can be retained in the Mainframe system. 

Core-Surround: Mortgages should be managed through a product based platform to segregate the processes and channels managing the mortgage through its life cycle. This functionality can be moved out of core banking system.

This simplification of core leads to functional consolidation, faster implementation, process optimization, complexity reduction, Microservices based Architecture etc. 

Extending the strategy our approach is to have a top-down view of related business functions and categorize them as System of Innovation, System of Differentiation and System of Records (as per Gartner Pace Layered Architecture). Normally the System of Innovation and System of Differentiation are good candidates for core-surround, and the System of Records for true-core. Once that demarcation and enabling of the True Core and Core -Surround has happened we can look at gradually even phase wise transformation of the Core. This approach follows the 'Strangler Application' pattern (Martin Fowler) that enables in transforming legacy. This leaves behind only what should essentially remain on Mainframe and nothing more.


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                                                     Infosys "Transform" Model for Modernization

This pattern is something which has resonated with various clients that we have talked to and also which we are helping to implement. 

For example, for a major European Bank we are helping on transforming their monolithic Core Accounting system, which is a very tightly coupled system with multiple functionalities incorporated into one humongous Mainframe application. We are doing this by looking at the various Technical and Business Functionalities to help come up with a multi-year road map to phase wise move to a Core and Core-Surround model to bring better efficiencies.

For a cards client we have evaluated their loyalty platform, as they were tied down by platform limitations leading to missed business opportunities on time. We followed a 'meet in the middle' approach analyzing the current business process and the systems in place. A 1-3-5 Year road map was established and the journey started. The end result is expected to be an agile system with around 30% reduction in cost and 30-40% improvement in time to market.

Is your monolithic system slowing you down? Learn more about the modernization options available to you. 

Co-authored by:
Nareshkumar Manoharan and Tiju Francis

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