Case Study: IBM Mainframe Licensing Review and Optimization for a Financial Institution
Challenge
A global financial institution across multiple regions engaged Redress Compliance to conduct a comprehensive IBM licensing review, focusing on its mainframe environment. The institution relied heavily on mainframe systems for critical banking operations, including transaction processing, risk management, and regulatory compliance. With high licensing costs and complex usage metrics, the organization sought to ensure compliance, optimize license usage, and reduce unnecessary expenses. The intricate nature of IBM’s mainframe licensing structure, including Monthly License Charges (MLC) and sub-capacity rules, required specialized expertise to navigate effectively.
The Process
- Comprehensive Licensing Analysis: • Reviewed IBM mainframe licensing agreements, including MLC and one-time charges (OTC) entitlements. • Evaluated workload configurations and usage metrics to ensure accurate sub-capacity reporting. • Conducted a detailed assessment of peak usage to identify optimization opportunities.
- Identification of Non-Compliance and Optimization Opportunities: • Validated mainframe usage data to identify discrepancies and potential non-compliance risks. • Discovered overprovisioned workloads and underutilized entitlements contributing to inflated costs. • Identified opportunities to adjust workloads and optimize processing peaks to minimize MLC fees.
- Optimization and Cost Reduction: • Implemented workload rebalancing strategies to reduce peak utilization, directly lowering MLC costs. • Recommended decommissioning legacy mainframe applications no longer required, freeing up resources. • Reallocated unused mainframe entitlements to align with actual usage, reducing the need for additional purchases.
- Governance and Compliance Framework: • Developed a compliance framework incorporating automated tools for real-time monitoring of mainframe usage. • Delivered targeted training for IT and operations teams to enhance understanding of IBM mainframe licensing policies. • Established a regular audit schedule to ensure ongoing compliance and cost control.
Results
- Reduction in Non-Compliance Exposure: • Initial financial exposure due to non-compliance: $15 million. • Final exposure after remediation: $0.
- Cost Savings Achieved: • Annual savings from MLC optimization: $5 million. • Additional savings from decommissioned applications: $1.5 million. • Total savings achieved: $6.5 million annually.
- Optimization Outcomes: • 30% reduction in mainframe licensing costs. • Improved efficiency in mainframe resource allocation, reducing processing peaks by 25%. • Streamlined mainframe software portfolio, improving overall IT governance.
Quote from the CIO:
“Redress Compliance’s expertise in IBM mainframe licensing was invaluable. Their recommendations not only ensured compliance but also unlocked significant cost savings. We’re now operating more efficiently, with a clear strategy for long-term cost management and scalability.”
Key Results:
- Initial Exposure: $15 million.
- Savings Achieved: $6.5 million annually.
- Compliance Enhanced: Fully compliant with IBM mainframe licensing terms.
- Operational Efficiency: Optimized mainframe workloads and reduced overhead costs.
This case demonstrates Redress Compliance’s ability to deliver substantial financial and operational benefits by optimizing IBM mainframe licensing, ensuring compliance, and reducing costs for large organizations.
