CGI’s experience demonstrates that retiring the mainframe platform can save up to 90% of its associated operating expenses, reduce time for competitive upgrades and more. Yet, a mix of inertia and misunderstanding of what it takes to realize these savings causes businesses to waste precious resources to maintain obsolete technologies, impeding their competitiveness.
CGI’s modernization approach migrates mainframe-based applications to open and costeffective Unix and Linux-based platforms and has generated the following benefits for our clients:
- Reduced infrastructure and application maintenance platform costs from 70% to less than 50%
- Redeployment of resources towards innovation from 30% to more than 50%
Our track record reveals an extremely compelling business case. A typical modernization project involves the following economics:
- The annual cost per MIPS ranges from $2,000 to $5,000 (€1,500 to €4,000)
- Depending on the complexity of the mainframe technologies involved, a migration project costs approximately the same as one year of maintenance.
- Resulting ongoing system maintenance costs are around 20% of mainframe costs.
|Mainframe cost||$6 to $16 million/year|
|Migration project||$8 to 10 million (one time)|
|New system cost||$1.5 to $2.5 million/year|
|Project payback||9 to 12 months|
|Savings||Approximately $8 million/year|
A fully funded alternative
CGI believes in sharing risks and rewards equitably and can leverage its strong balance sheet to fully underwrite the migration and modernization process. For example, for the same midsize mainframe (4,000 MIPS), financing the modernization project and mainframe operation with a five-year loan at 6% interest rate would generate the following results:
|Mainframe cost||$10 million/year|
|Years 1 to 5||Years 6 to 10|
|New system cost||$7.7 million/year||$6 million/year|
|Savings||$2.3 million/year||$4 million/year|
CGI’s IT Modernization Global Competence Center
CGI’s IT Modernization Global Competence Center encompasses a specialized team of highly competent and experienced professionals whose main goal is to align a client’s vision and goals with the evolution of its IT infrastructure