• January 28, 2022

Reducing Shadow IT Through Digital Transformation

All businesses today have a hybrid IT environment. They pay for collections of servers,  be they UNIX servers, Windows servers, cloud servers or mainframe servers. Other IT spending includes mobile,  desktop and end-user devices. In many cases, those budgets might be by server domain, so the mainframe budget is separate and independent of the rest of their IT infrastructure.

As a result, business leaders in each IT domain space are constantly challenged to reduce their  IT expenses. They use financial transactions to reduce individual license charges. They swap vendor products, to reduce charges. In non-mainframe IT environments,  they create shadow IT. 

What’s Shadow IT?

Shadow IT means redundantly moving work off of the mainframe.  Typically, data is copied off first and then some applications built around that data. The mainframe may be perceived as too expensive,  lacking skills or lacking capabilities. Another thought is it’s just not good enough to handle the new types of workload. With these silo’ed customers, changes in mainframe spending have no impact on other IT budgets. Essentially, these mainframes may just be moving the deck chairs on the Titanic. 

An enlightened business looks for ways they can reduce shadow IT spending, usually leveraging more capabilities on the mainframe. Focus areas to consider include data virtualization and DevOps. Data virtualization shares data between systems and dramatically reduces the IT infrastructure.  Money gets taken from the distributed systems to grow the mainframe business with a net reduction in overall IT spend. 

Spend more in the mainframe to reduce overall IT expense

Another example is to build a hybrid DevOps environment. The mainframe can easily participate in open source and proprietary DevOps tooling. Teams put new applications where they make the most sense. In a good DevOps environment, legacy data is available at the speed of agile developers. 

A hybrid strategy improves security and resilience of the environment, reduces the latency between systems and reduces the IT complexity by simplifying or reducing the number of physical server instances. It provides investment protections for the future, while also reducing overall IT spend. 

One business identifies their Shadow IT cost

One business attempted just such a plan to reduce their shadow IT. They spent $200 million annually on their mainframe IT. Projecting over five years, they believed they could reduce further the cost of their mainframe IT by anywhere up to $20 million annually by stabilizing new development, outsourcing and taking advantage of technology dividends.

However, they were spending $100 million a year on new distributed applications. Those applications used data copied off the mainframe into UNIX and Windows servers. Their version of Shadow IT. They created hot teams for new applications including mobile, artificial intelligence and transaction processing. Each team was 6 to 10 people. Once an application went into production, they’d have to consider new operations models,  disaster recovery and then begin work on the next version. They projected within five years they’d be spending $1.3 billion annually in this distributed shadow IT environment.

The business needed to take action. They decided to tackle this silo-ed operation by converting to a hybrid operation and reducing shadow IT.  Their thought was to double down on their mainframe spending, to go up as high as $400 million a year. This included keeping the data on the mainframe as well as some of the new transaction programs. Other applications would be built as a hybrid, leveraging desktops and mobile devices as new channels to their existing business applications.

Build a plan to reduce Shadow IT costs

With this approach in mind, the opportunity was not to save money but to avoid up to $600 million in IT expenses on the non-mainframe IT. In five years, they were hoping to avoid $400 million in overall IT spend. 

How can Hybrid IT projects fail?

Unfortunately, that project didn’t succeed for a variety of reasons. With such lofty goals, why does a project like that fail? The first thing was they put a mainframe manager in charge. He didn’t ask the opinion of the non-mainframe developers when they came in on the UNIX and Windows side and he wasn’t asking their opinion when he kicked them out. 

The silo-ed mentality and competition for new budget growth was deeply ingrained in their culture. The teams didn’t want to collaborate for mutual business success. 

Lastly, they didn’t focus on their development operations budget. Development desktops were $5,000 apiece. Mainframes prices could have been up to $200,000 to $300,000 per developer because they weren’t taking advantage of special pricing for application development or test servers. 

How can Hybrid IT projects succeed?

For a company to actually save money and avoid shadow IT,  they’ve got to have a hybrid operations model. Adoption of a hybrid IT model includes:

  • Consistency of application development across platforms, including the mainframe.
  • Modernizing end-user experiences. The presentation applications can work independently of transaction programs through new interfaces. They can distinguish between stateless user interfaces and stateful transaction programs. 
  • Leveraging data virtualization to share data to whichever platform is needed for their applications.  
  • Managing for end-to-end resilience between the platforms. 
  • Embracing cross-platform security.  That means authentication, audit and compliance consistency across platforms. 

Throughout this process, the mainframe infrastructure evolves to enable common skills to work between the mainframe and other systems. In turn, this simplifies the eduction for the next generation of IT system programmers.

Businesses with a hybrid IT model can save considerably. It can be hundreds of millions of dollars. Those that remain politically siloed won’t be able to take advantage of any of those types of IT business savings. Start your hybrid journey today.

Jim Porell 9 Posts

I am a Solutions Architect at Rocket Software, focusing on pre and post sales technical assistance for Rocket developed products from IBM. Prior to joining Rocket, I was an independent consultant and retired IBM Distinguished Engineer. I held various roles as Chief Architect of IBM’s mainframe software and led Business Development and marketing of Security and Application Development for the mainframe. My last IBM role was Chief Business Architect for Federal Sales. I held a TS/SCI clearance for the US Government, was a member of the US Secret Service Electronic Crimes Taskforce in Chicago and co-authored several security books. I've done cybersecurity forensic work at a number of Retail, Financial and Government agencies and created a methodology for interviewing customers to avoid security breaches for large enterprises. I have over 40 years working with Information Technology.


  • sparity Reply

    January 5, 2022 at 11:30 am

    Valuable information and excellent design you got here! I would like to thank you for sharing your thoughts and time with the stuff you post!! Thumbs up

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