We’re heading to Oracle Open World

This Ed Airey blog explains how the modern enterprise can harness technology and technique to outpace and counter the changing face of completion and achieve sustainable business agility. Ed will be at Oracle Open World discussing this further at his session: Destination Java: Take enterprise apps to JVM and the Cloud so if you’re attending don’t hesitate to find him and chat more…

Into the Future: new tools for the agile enterprise

What is the agile enterprise? Is it an organization ready to respond to new demands or business opportunity, rapid changes in the market or changes in consumer demand?  To survive-it must achieve all these goals and more. This is the new norm for 21st century business – ever increasing flexibility. But how does business obtain and keep that nimble responsiveness to change? Is there a secret ingredient to the recipe of organizations that have done so already?  To be agile is to be adaptable—to flex and shift to meet the challenges of one’s environment. Just as the chameleon adapts to his surroundings shielding itself from predators a business organization must adjust its strategy and approach to counter its competition.  For most enterprise shops this is not an easy feat. Mired in technical debt, most IT leaders struggle to manage their IT backlog alongside new business initiatives.  Addressing both requires new thinking, new tech and a new approach to enterprise modernization.


The Case for Modernization

For organizations struggling to cope with increasing IT debt and an older enterprise application portfolio, consider the innovative path taken by a very well-known European auto-manufacturer.  For years, this organization maintained a sterling reputation for quality, performance and service.  Its aging IT infrastructure, however, now plagued with stability problems threatened its ability to both service its customers and maintain its industry prestige.

The manufacturer considered a complete replacement of its core application infrastructure but quickly realized this would be both costly and risky to business operations.  In a fiercely competitive auto market, competitive advantage was paramount and this organization couldn’t afford to lose a step to the competition by disregarding its precious intellectual property.

Modern tools and new technology was employed to modernize its core enterprise applications. Using the power of Eclipse, new and existing IT teams could quickly integrate existing enterprise applications with Java, web services and other solutions. Enterprise application deployment to the Java virtual machine (JVM) enabled future flexibility and scale to meet new business requirements and opportunity. Modern tools and a new mindset delivered fast results—all without rewriting valued application code.


Oracle Open World #OOW16

The key to this strategy—unlock the value of IT investments. This year in San Francisco at the Oracle Open World event come and see the future of enterprise application modernization for yourself.  Explore how to easily take existing enterprise systems to new platforms including Java, the JVM, and Linux.  We’ll examine how this European car manufacturer and other businesses took their enterprise applications to modern environments using new tools, new thinking and Micro Focus’ game changing solution Visual COBOL

If you’re attending please don’t hestitate to come and visit us at our booth at the Networking Station @ Oracle Linux, Virtualization and OpenStack Showcase and please attend my sessionTake Enterprise Apps to Java Virtual Machine and the Cloud’ on Tuesday, Sep 20 at 16:00 -16:20 in the Moscone South Exhibition Hall to discuss modernization options further….


Start over, or with what you know?

Derek Britton’s last blog looked at the appetite for change in IT. This time, he looks at real-world tactics for implementing large-scale change, and assesses the risks involved.


In my recent blog I drew upon overwhelming market evidence to conclude that today’s IT leadership faces unprecedented demand for change in an age of bewildering complexity. That “change”, however, can arrive in many shapes and forms, and the choice of strategy may differ according to a whole range of criteria – technical investments to date, available skills, organizational strategy, customer preference, marketing strategy, cost of implementation, and many more besides. This blog explores and contrasts a couple of the options IT leaders have.

Starting Over?

Ever felt like just starting over? The difficulty of changing complex back-end IT systems, when staffing is so tight, where the pressure to change is so high, with an ever-growing backlog – there is point at which the temptation to swap out the hulking, seething old system with something new, functional and modern, will arrive.

Sizing Up the Task

We’re sometimes asked by senior managers in enterprise development shops, how they should assess whether to rewrite or replace a system versus keeping it going and modernizing it. They sense there is danger in replacing the current system, but can’t quantify to other stakeholders why what is.

Of course, it is impossible to give a simple answer for every case, but there are some very common pitfalls in embarking on a major system overhaul. These can include:

  • High Risk and High Cost involved
  • Lost business opportunity while embarking on this project
  • Little ‘new’ value in what is fundamentally a replacement activity

This sounds a rather unpleasant list. Not only is it unpleasant, but the ramifications in the industry are all too stark. These are just a few randomly-selected examples of high profile “project failures” where major organizations have attempted a major IT overhaul project.

  • State of Washington pulled the plug on their $40M LAMP project. It was six times more expensive than original system
  • HCA ended their MARS project, taking a $110M-$130M charge as a result
  • State of California abandoned a $2 billion court management system (a five-year, $27 million plan to develop a system for keeping track of the state’s 31 million drivers’ licenses and 38 million vehicle registrations)
  • The U.S. Navy spent $1 Billion on a failed ERP project

Exceptional Stuff?

OK, so there have been some high-profile mistakes. But might they be merely the exception rather than the rule? Another source of truth are those who spend their time following and reporting on the IT industry. And two such organizations, Gartner and Standish, have reported more than one about the frequency of failed overhaul projects. A variety of studies over the years keeps coming back to the risks involved. Anything up to a 70% failure is cited in analyst studies when talking about rewriting core systems.

Building a case for a rewrite

Either way, many IT leaders will want specific projections for their own business, not abstract or vague examples from elsewhere.

Using as an example a rewrite project[1] – where in this case a new system is built from scratch, by hand (as opposed to automatically generated) in another language such as Java. Let’s allow some improvement in performance because we’re using a new, modern tool to build the new system (by the way, COBOL works in this modern environment too, but let’s just ignore that for now).

Let’s calculate the cost – conceptually

Rewrite Cost = (application size) x (80% efficiency from modern frameworks) x (developer cost per day) / speed of writing

The constants being used in this case were as follows –

  • The size of the application, a very modest system, was roughly 2 Million lines of code, written in COBOL
  • The per-day developer cost was $410/day
  • The assumed throughput of building new applications was estimated at 100 lines of code per day, which is a very generous daily rate.

Calculated, this is a cost of $6.5M. Or, in days’ effort, about 16,000.

Considerations worth stating:

  • This is purely to build the new application. Not to test it in any way. You would need, of course, rigorous QA and end-user acceptance testing.
  • This is purely to pay for this rewrite. In 10 years when this system gets outmoded, or the appetite for another technology is high, or if there are concerns over IT skills, do you earmark similar budget?
  • This assumes a lot about whether the new application could replicate the very unique business rules captured in the COBOL code – but which are unlikely to be well understood or documented today.

A well-trodden path to modernization

Another client, one of the world’s largest retailers, looked at a variety of options for change, among them modernizing, and rewriting. They concluded the rewrite would be at least 4 times more expensive to build, and would take 7 or 8 times longer to deliver, than modernizing what they had. They opted to modernize.



Elsewhere, other clients have drawn the same conclusions.

“Because of the flexibility and choice within [Micro Focus] COBOL, we were able to realize an eight month ROI on this project – which allowed us to go to market much faster than planned.”

— Mauro Cancellieri,  Manager. Ramao Calcados

“Some of our competitors have written their applications in Java, and they’ve proven not to be as stable, fast or scalable as our systems. Our COBOL-based [banking solution] however, has proved very robust under high workloads and deliver a speed that can’t be matched by Java applications.”

— Dean Mathieson, Product Development Manager, FNS / TCS

Our Recommendation

Core business systems define the organization; they – in many cases – are the organization. The applications that provide mortgage decisions, make insurance calculations, confirm holiday bookings, manage the production lines at car manufacturers, process and track parcel deliveries, they offer priceless value. Protecting their value and embracing the future needs a pragmatic, low-risk approach that leverages the valued IT assets that already work, delivers innovation and an ROI faster than other approaches, and is considerably less expensive.

If you are looking at IT strategic change, talk to us, and we’d love to discuss our approach.

[1] We can’t speculate on the costs involved with package replacement projects – it wouldn’t be fair for us to estimate the price of an ERP or CRM package, for example.

Enterprise DevOps is different: here’s why

Many of the world’s largest enterprises are looking at DevOps. But, as many are discovering, implementing it is not without its pitfalls. In his first Micro Focus blog, software industry guru Kevin Parker outlines what DevOps means at the enterprise scale.


The DevOps movement evolved to allow organizations to innovate fast and reduce risk. DevOps rethinks how software development and delivery occurs and it reshapes how IT is organized and how IT delivers value to the business. However, some “pure” DevOps ideas are difficult to implement in highly regulated, large enterprises.

A question of scale

When the organization is required to meet strict government audit and compliance standards, when you have optimized IT delivery around a monolithic, centralized infrastructure and when you have specialist teams to manage discreet technologies, it is very difficult to relax those controls and remove the barriers in order to adopt a shared-ownership model called DevOps. Yet implementing DevOps is exactly what over a quarter of the largest global IT teams are doing today.

So how do highly regulated, large enterprises benefit and succeed with DevOps?

Preparing for Change

Enterprise scale adoption requires enterprise-wide change. As Derek Britton said in a recent perspective on the cultural impact of DevOps, “[it is] those who preside over larger systems, [where] that chaos will be most keenly felt.”

There has to be acceptance that changes to practices, processes, policies, procedures and plans will occur as the ownership of responsibility and accountability moves to more logical places in the lifecycle. Trust must be freely given. Every action taken must have transparent verification through common access to project data. This will be disruptive so there must be strong leadership and commitment through the chaos that will occur.

Not just for the Purists

In the table below some of the differences that exist between “pure” DevOps and DevOps as implemented in highly regulated, large enterprises:

“Pure” DevOps Enterprise DevOps
Pure Agile teams Variable speed IT with waterfall, agile and hybrid development and deployment
Multidisciplinary team members with shared ownership and accountability Team maintains strict Separation of Duties (SoD) with clear boundaries and concentrations of technical specialists
Drawn primarily from Dev and Ops teams Drawn primarily from Change and Release teams
Limited variability in platforms, technologies, methodologies and a generally a standardized toolset – often Open Source Solutions (OSS) Wide variances in platforms, technology, methodologies and toolsets with many so-called legacy, and often competing, solutions – occasionally  Open Source Solutions (OSS)
Generally collocated small teams Generally geographically dispersed large teams
Frequent micro-sourcing and contingent workforce Frequent outsourcing inshore and offshore
Light compliance culture Strong compliance culture
Limited cross-project dependencies Complex cross-project dependencies
Architecture of application strongly influenced by microservices approach Architecture bound by legacy systems steadily being replaced by encircling with newer ones
Experimental, A-B testing, Fail-Fast culture Innovate Fast And Reduce Risk culture
Team developing the app runs the app Team developing the app kept separate from team executing the app

The key takeaway is this – an enterprise-scale adoption requires some very smart planning and consideration.

Automate to Accelerate

The key to successful DevOps adoption comes down to automation. Whether your DevOps initiative starts as a grassroots movement from the project teams in a line a business or from an executive mandate across the corporation, bringing automation to as much of the lifecycle as is practicable is what ensures the success of the transformation. Only through automation is it possible to cement the changes necessary to effect lasting improvements in behavior and culture.

Through automation, we can achieve transparency into the development and delivery process and identify where bottlenecks and errors occur. With the telemetry thrown off by automation we are able to track, audit and measure the velocity, volume and value of the changes flowing through the system, constantly optimize, and improve the process. With this comes the ability to identify success and head off failure allowing for everyone to share in the continuous improvement in software delivery.


The Time is Now

Nothing is more important in IT than the timely delivery of working software safely into production. The last decade has seen astonishing growth in the complexity of releases and the consequences of failure and astounding change in the volume and velocity of change. As each market, technology and methodology shift has occurred, it has become ever more critical for Dev and Ops to execute software changes flawlessly.

With the extraordinary synergies between the Micro Focus and newly-acquired Serena solutions it is now possible to create and end-to-end automated software development and delivery lifecycle from the mainframe to mobile and beyond and to affect your DevOps transformation in a successful and sustained manner. Read more here.

Kevin Parker

Vice President – Worldwide Marketing, Serena Software




COBOL – fuelling the FinTech explosion

How – and why – is COBOL, a decades-old technology, fuelling explosive growth in a new area? Our new blogger, Henning Luebberding, shares his thoughts….

FinTech investments more than doubled in 2015 and there are currently around 5000 to 6000 FinTech companies competing for market share – and billions of venture capital funding. Financial Technology is also a hypercompetitive, B2C marketplace set in a difficult, highly-regulated landscape with zero room for error.

Sensibly, most start-ups delegate managing the complex IT back-end to a more experienced partner in the banking sector. They concentrate on finding customers – and funding – while utilizing the power of their partner’s COBOL applications for the ‘heavy lifting’ of back-end IT.

Examples include Number26, who partner with Wirecard, while Fairr.de rely on Sutor Bank for IT support. So what’s in it for the more established banks? Plenty. Because unlike the unruly intrusion of challenger banks, this partnership enables older banks to become stakeholders in the disruptive innovation sweeping their marketplace.

But to meet their end of the bargain – to deliver the services FinTech start-ups need – banks must up their IT game. Arguably the definition of ‘fit for purpose’ banking technology must now include modern functionality, such as APIs for mobile and web applications, as standard.


The challenge

This article predicts bank spending on new technologies in North America to reach $19.9 billion in 2017. Current IT must evolve. But ‘older’ COBOL is ubiquitous in this sector; the simple ‘00’ syntax was created for number crunching and COBOL has been the language of banking for 50 years.

COBOL is here for good. As recently as February of last year, COBOL’s durability, prevalence and reliability established it in the top 20 of the TIOBE Index and it continues to grow. But banks and other FS clients don’t need graphs. They want real-world answers to the business challenges their customers are giving them.

Some currently host their COBOL applications on mainframes, a technology never created for this level of flexibility. Others use distributed platforms. Few have a great appetite for the risks of rewrite or replacement. So how can the behemoths of banking offer the innovation that the more nimble FinTech start-ups demand?


The solutions

Micro Focus enabling technologies regularly achieve modern flexibility for our financial services (FS) customers and other owners of mature COBOL and PL/I applications.

Mainframe clients exploit the contemporary Eclipse or Visual Studio technology of Enterprise Developer, a powerful integrated development environment (IDE) while Visual COBOL offers the same benefits on distributed platforms.

Visual COBOL, Enterprise Developer – and the Micro Focus Enterprise suite of application modernization tools – enable FS customers to realise a corporate FinTech strategy. They protect their IT infrastructure investments while improving application development to create the products their end-users – the bank customers – and partners demand.

Because as we noted in our recent blog on challenger banks. “Customers are trusting banks who possess good technology. And IT could well be the next major battlefield between established and challenger banks in a rapidly changing market.”

So whether banks are start-ups or just looking to keep going, a failure to innovate means being left behind…….

Share your thoughts in the comment section below

PL/I – 50 years young….

Relying on PL/I-based applications to tackle today’s challenges doesn’t have to be challenging. Amie Johnson checks out how the Micro Focus approach to modernization enables PL/I shops to get the most out of the rich and valuable business logic embedded in PL/I applications and support innovation.

50 years pl1

Did you know IBM shipped the first Pl/I compiler in 1966? Contemplating PL/I’s fifty-year anniversary made me wonder what fifty computer years feels like. Turning fifty in human years usually induces fear and anxiety because we’re forced to reckon with the fact that, according to today’s calculated life expectancy, we’ve lived more than half of our life. That’s intense. But, turning fifty in computer years seems dramatically more intense. Especially imagining if I were the CIO of a business relying on fifty year-old PL/I applications to compete in today’s world where the speed at which you can deliver services matters in fractions of a percentage point. Cue some uncertainty…..

As you can imagine, a fifty year old IT estate is an unwieldy array of disparate, heterogeneous systems, often woven together by a delicate fabric of dependencies and relationships. But the Intellectual Property captured within these estates contains nuggets of genuine gold. For example PL/I has boasting rights to some pretty remarkable accomplishments – from space travel to laying the foundation for the instant-price-quote economy that drives fierce competition in industries like insurance and travel.

PLi blog lunar

The truth is, there is still a sizable group of industry leading businesses using the differentiators delivered by their PL/I-based systems to compete and win today. And IBM has shipped new enhancements every year since 1999 including providing modernization capabilities that enable business-critical applications to interoperate with Java, process inbound and outbound XML documents, and work with Web services and the latest middleware.

Micro Focus too continues to invest in helping our PL/I customers by continuing to cultivate a team of PL/I talent that is unrivaled in the industry. Additionally, the latest update to the Enterprise Product Suite boasts an array of PL/I enhancements geared toward making the work of the PL/I teams more integrated.

Enterprise Developer support for PL/I now enables users to create projects on remote UNIX/Linux machines from the Eclipse IDE so developers can remotely edit, compile and debug their PL/I applications on the target machine from within the IDE running on Windows. This makes the use of development tools more consistent and the results from testing more relevant as the applications are running on the target environment.

Visual Studio-specific improvements include support for squiggles, IntelliSense, margins and error checking when editing, which improves developer productivity by making code development and problem determination easier.

And for organizations that need to consider a multi-platform environment or want to modernize their applications to take advantage of 64-bit server architecture, Enterprise Server offers improved functionality and greater language compatibility, making it easier to deploy PL/I workloads wherever the business needs them to be.

server room

CIOs today have to contend with plenty of challenges, like addressing the IT Backlog and meeting tough compliance targets while delivering new web, mobile and cloud-based services quickly. Relying on PL/I-based applications to tackle these challenges doesn’t have to be be challenging. Check out how our approach to modernization enables you to get the most from the rich and valuable business logic embedded in your PL/I applications, so you can support the business as it looks to innovate.

PLi blog


IT Skills: Industry experts have their say, Part 1

IT Skills remains an important topic in many organizations. In a recent webinar, hosted by SHARE, experts from Micro Focus, IBM and IT-ology gave some tremendous insights into this important question. Jackie Anglin caught up with Micro Focus’ panelist, Ed Airey, to hear all about it

Recently I helped arrange a webinar on IT Skills, featuring a panel of experts. Hosted by Micro Focus’ Derek Britton, the panel included Ed Airey – Micro Focus’ solutions marketing director, Lonnie Emard – President of IT-ology, David Rhoderick – Manager of IBM z Systems Competitive Project Office.

Derek set the scene describing reports of concerns over dwindling technical skills, but then asked Ed and the other panelists a range of key questions. Having worked with our University partners through the Micro Focus Academic Program and a variety of customers around our COBOL-based technology, Ed has some unique insights, so I was glad to catch up with him and ask him about how the webinar went:

ITSkills Q1

Ed the first question was “How does an organization build an appropriately skilled workforce?” – how did you see it?

Ed: “That’s a great question.  To best address future IT workforce needs, an organization must first assess their current IT (application) estate.  A strong understanding of the application portfolio supporting core business will drive the necessary conversation and action to best develop or recruit that sought after talent.  Fundamentally, though, an organization must begin by examining the value within its core business application portfolio.  If such applications remain vital to the long term success of that organization then IT leadership must align its IT skills plans to that of its core business applications.  That being said, this new’ digital economy’ has added even further complexity to the skills planning process.  Supporting core business systems is important, but IT must also possess the skills needed to deliver ‘new innovation’ as requested by the business.  For an organization to appropriately respond to this challenge, it must recruit and develop IT talent with an understanding and appreciation of core business applications but also with eye to future technology and how the ‘best of both worlds’ can come together to address core business needs.”

ITSkills Q2

The second question was about how technology plays its part in the skill challenge. Thoughts?

Ed: “Yes – and we see this pretty clearly. Technology plays a hugely important role in addressing IT skills concerns.  Both IBM and Micro Focus share a long standing commitment to technology innovation and have made similar investments in this area.  Here at Micro Focus, we believe that technology can mitigate challenges organizations have in attracting ‘next gen’ talent.  In the context of business applications, many IT shops use tech that ‘did the job’ well enough, but required many years of experience to command.  But the application development landscape has changed.  According to reports, over 70% of professional software developers are building enterprise applications using either Visual Studio or Eclipse.  And these same IDEs are the development tools being taught within most IT university programs. So graduates will have modern IT development skills but also a command (and interest) for many programming languages.  Herein is the strategy for enterprise organizations to attract next generation talent in support of core business systems but also to acquire the same talent needed to modernize these applications for the future. Micro Focus and IBM have made investments in this space to simplify application development across all environments, mainframe, distributed and cloud.   Developers can now easily build and test enterprise applications (COBOL, PL/I) using the latest IDEs (Visual Studio or Eclipse) allowing organizations to leverage modern technology to bring on more skilled talent where it is needed.”

ITSkills Q3

Finally Ed, you were asked what is the long term solution?

Ed: “That’s right. Here’s how I saw it – the long term solution to addressing industry skills concern rests with the greater community and the ability of that collective group to better collaborate together, align business need to IT skill development and ultimately, deliver lasting change.  That change occurs through honest, open and continual dialogue between partners – Academic universities shaping IT curriculums to the needs of its local business partners (the enterprise).  Enterprise IT partnering more closely with their local university and IT vendors playing their role through the FREE provision and education of modern technology.  It’s only when these three forces align, can the community truly implement lasting change and a long term solution to the ‘IT skills’ concern.”

Thanks Ed – was there anything else you saw as important?

Ed: “To be honest this is an ongoing discussion for many organizations, which are constantly changing, and need to look at their talent pool regularly. But for organizations seeking to move quickly to address IT Skills uneasiness, I would suggest the following actions:

  • Begin an assessment of your current and future IT skill needs.  Ask how do these skills align to your existing CORE business application portfolio?  Develop a succession plan (shadow program) to cross train IT talent within your organization.
  • Reach out to your local university.  Develop a partnership.  Share your needs and begin to influence the IT program at that university.  Better still suggest your local university research the IBM Academic Initiative or the Micro Focus Academic program for software and educational support.”

In my next blog, we’ll recap the panel discussion including thoughts and views from IT-ology and IBM on tackling the skills opportunity that organizations have. I’d love to hear your thoughts and feedback too! Find me on Twitter

Taking an interest – the rise of the challenger bank

Recent reputational damage among market leaders has coincided with the arrival of so-called Challenger Banks. Derek Britton takes a look at the impact of IT and other factors on the competitive landscape.


Most of us stay with the same bank forever. Business banking also follows a model of brand loyalty. It is almost diametrically different to the insurance market where, by comparison, the expectation is that the customer will proactively look for the “best” supplier at each annual renewal date. Yet somehow a market dominated for so long by major incumbents is being gradually eroded by new entrants. Indeed, high streets in the UK are greeting a brand new banking brand, Metro Bank, opening new branches.

A lot has changed in a short space of time. Building on from Challenger banks: on the lawns of retail banking?, this blog takes the Challenger Bank discussion further by examining this seismic shift in the banking sector and asks if this change is here to stay.


Market Interest

Big players in the banking market enjoy significant market share. In the UK, the “Big Five” (HSBC, Barclays, Lloyds, RBS and Santander) account for 85% of the market, while in the US the much more fragmented marketplace still has big names, where “the largest five banks in the U.S. now control nearly 45 percent of the industry’s total assets.”

Yet retail banking is far from a static market. The banking crisis saw unprecedented levels of consolidation and attrition in the market during which household names such as Wachovia (formerly First Union), Merrill Lynch, Northern Rock, Alliance and Leicester and over two dozen Spanish banks ceased to exist. In 2009 alone, 140 US banking brands ceased trading.

But when there is ebb, there is flow. When Metro Bank opened in 2010, it was the first new company to be granted a banking licence in 150 years. Atom Bank followed suit, joined by other new entrants. “Challenger Banks” – as they are now often termed – comprise both established retail organizations that have moved into banking (e.g Tesco, M&S), and new banking start-ups.


A Cutting Edge

What are these new banks offering that makes them attractive?

New UK banking start-ups including Atom and Starling offer an online-only service, and are passing on some of that cost efficiency with offer lower interest rates on loans and higher rates on savings.

Their focus on mobile apps and strong user experience, they are aiming to attract the growing demographic of technically savvy, online banking customers. The number of people using mobile banking, for example, is set to double in the next 4 years. And it seems to be working. Growth figures are outperforming the bigger banks and lending volumes have increased significantly.

Additionally, offering a “voice” to the customer community is part of the challenger proposition. German digital bank Fidor, which launched in the UK in September 2015, bases its banking model around its online community, offering customers a voice – through its social media platform – in how the bank is run.

Furthermore, the new brands have sustained none of the reputational damage[1] suffered by the major players in the wake of the banking crisis, including brand-damaging scandals around IT crashes, LIBOR, FOREX and PPI mis-selling, insider trading and data breaches. As recently as April 2015, an industry steering group implored banks to “raise their game” to improve their reputation. Yet regulatory violations are reported, and fines continue up to the present day.


Too Big To Fail?

Surely the incumbent giants of retail banking have a response ready?

The first witness for the defence is, paradoxically perhaps, the issue of trust. Compared with a known banking brand, does a customer trust a bank with little or no experience? Despite a couple of banking giants losing the trust of some customers, others are still trusted more than newer entrants in terms of expertise and capability. People know what to expect from the long-established retail bank branch.

Related to this, was the issue of whether the bank could provide appropriate – by that read reliable – technology. Brand loyalty, according to research, hinges on banks providing good technology, said an overwhelming 80% of respondents to one survey. Whether for challengers it is too early to tell how good that technology is, is an interesting question.

The next issue concerns regulatory readiness in terms of funding. Chief executive of the British Banker’s association, Anthony Browne, commented:

“Challenger banks are obliged to hold more capital than more established banks, which have data stretching back decades, allowing them to show … they are less risky. Challengers do not have that track record. This can mean that…a challenger is obliged to hold eight times’ as much capital as a larger bank.

There is also a question of technology. And it is a big question. Customers might  see the mobile app as the face of the bank, but the core processing takes place away from the user’s screen, which requires a reliable, resilient infrastructure: a bank’s IT system is its business. By running long-standing reliable systems, retail banks possess both trusted technologies and are evolving quickly. For instance, the mobile banking apps on our phones are invariable supported by typically COBOL applications written many decades ago, and still running today, on mainframe machinery. This is technology which has a heritage of investment, value and uniqueness at the larger banks, but which clearly does not exist in the same way in the back office of the Challengers.

Finally there the thorny issue of the branch network. Despite significant closures, the established banks’ branch network far outnumbers[2] new incumbents. And while the question of the value of the branch itself in terms of day-to-day consume banking, the attitude to branches remains benign. According to the 2014 UK YouGov Poll for the British Banking Association “57% of banking customers themselves believe access to a branch is important, even if they choose not to use branches”.

Adding it all up

In the UK, the most disrupted banking market, those Challenger banks still only account for a small proportion of the market. Some way to go perhaps before a major dent appears.

Yet the changes are afoot.  The comprehensive banking results review published by KPMG in 2015 stated “The Challengers are outperforming the Big Five in terms of growth (compound annual growth rate 8.2% between 2012 and 2014 compared to a reduction of 2.9% for the Big Five).” While barely noticeable from a distance, the market continues to shift. A former Chief Executive of one major bank predicted branch numbers and employees in the sector “may decline by as much as 50% over the next ten years” in response to Challenger threats and the new digital economy. It is no great surprise that a significant investment in one Challenger Bank, Atom, was recently made by a major EMEA Banking giant, BBVA.

While the Challengers have some advantage – they can adapt to change quickly, enjoy a fairly benign reputation so far, and have fewer overheads, the major incumbents possess the systems, the skills and the deeper pockets, not to mention the major market share, to navigate the choppy waters of market change. The situation seems finely poised.

Many clients in the financial services sector choose Micro Focus to support their important enterprise application modernization strategy. Take Standard Chartered Bank, China for instance. As well as helping it meet regulatory requirements, Micro Focus technology improved performance and response times, reducing a 3 hour job to just 3 minutes, cutting time to market of new services by 25%.

Customers are trusting banks who possess good technology. And IT could well be the next major battlefield between established and challenger banks in a rapidly changing market.


[1] A poll carried out by YouGov in April 2013 for the Public Trust in Banking symposium, found that 73% of respondents believed the reputation of banking was bad.

[2] According to the KPMG Report “The Game Changers”, 2015, the average branch network size for the “big 5” UK banks is over 1,400. The average branch network for smaller Challenger Banks (e.g. Metro. OneSavings) is 37.

Development technologies and strategies – meeting the skills challenge – Part I

Neil Fowler, Micro Focus Development Director, looks at the challenges of aligning skills requirements to IT business priorities, and suggests some strategies for overcoming the issues.

The Development Director challenge is simple enough; he or she must attract and maintain sufficient and appropriate development skills within the organisation to support the IT strategy and identify new solutions to improve productivity. However, the issues are more nuanced. The challenge of application complexity continues to grow. Documentation is limited, as is knowledge of the business systems. The availability of technically skilled staff is limited.

The very resilience of many organizations’ mature COBOL and PL/I applications presents Development Directors with an almost enviable challenge – to maintain systems whose longevity few had predicted. However, that is the reality.


These applications continue to provide intrinsic business-critical value and are effectively the lifeblood of the organizations who are looking to expose the business functions these applications provide to meet the pace of change. Keeping them up-to-date and fully maintained is therefore an operational imperative and often forms the cornerstone of technical strategy.

Decades of changing business demands will have meant extensive and ongoing application maintenance and evolution. Similarly, business and resourcing plans must evolve to reflect changing dynamics and operational requirements. Skills and resource management is integral to this.

Within IT organizations it is the Development Director who must find the specialist skills needed to develop and maintain their mainframe COBOL applications and ensure that the knowledge of these Subject Matter Experts (SME) stays in house. Because the older the application, the more likely it is that precious documentation goes astray – and maintaining this application is a major business imperative.

While recent Vanson Bourne research suggests that more than half of respondents have no difficulty finding IT workers with mainframe application skills, to ensure the long-term success and value of these core applications going forward, Development Directors must ensure an appropriate future supply of application expertise.


Strategic approaches

  1. Check your delivery processes: Smart thinking would suggest modernizing the application delivery process through the intelligent deployment of appropriate tooling. This represents an opportunity for new skills to contribute to an improved application development stream that incorporates the build, deployment and ultimately the ongoing support that underpin your improved process.  Enterprise tooling is available to enable a new generation of enterprise developers to meet the future needs of the business and resolve any resource challenge
  • Enterprise Analyzer aaccelerates development and modernization projects by more than 40%. Current and new staff will benefit from faster COBOL maintenance knowledge transfer, application analysis and documentation environment.
  • Our staff-enabling technologies include a more cost-effective and efficient environment that enable current staff to support key mainframe application maintenance, development and test activities.
  • Deploying more inclusive and contemporary mainframe development and testing environments will enable a new generation of developers to skill up and support core COBOL systems. This more powerful IDE also delivers tangible benefits – a 40% productivity boost is just one.
  • Many successful Development Directors have recognized the benefit of a more cost-effective and efficient testing environment for enabling current staff to support application maintenance and development activities. Many of our customers do.
  • The current industry talk is around DevOps, and our technology certainly fits this narrative. Because Micro Focus have been advocating the appropriate combination of technology and processes to racially improve software development and delivery for many years. Continuous Integration, Agile, Unit testing– these will all be familiar concepts to new joiners and supporting these processes with our tooling can breathe new life into application development and maintenance work for many enterprises.

In my next blog, I will take a look at how additional strategies such as workforce flexibility and upskilling – aligned with the latest in development and testing tech – can help organizations address their skills challenges.

Visit: www.microfocus.com/skills


Challenger bank or retail bank?

Challenger banks introduce competition to the world of the retail bank. Focusing on the challenger bank and its online/mobile appeal, this blog series explores the pros and cons of both bank types.

The challenger bank and its fresh appeal

Showing interest

When it comes to banks, the customer community has many questions. As well as the obvious things like, which bank offers the lowest interest rates, direct customers and institutions will want to know which one has the most user-friendly mobile app and whether any of them offer customer service that stands out. In addition, reputation and long-term health of a bank can be an important factor in how the market chooses a banking partner.

Initially it seems as if we have a catch-22 situation. While challenger banks like Atom Bank may offer an online-only service with a focus on keeping up with the latest technologies, retail banks such as Barclays have years of experience behind them of what works and what doesn’t work.

Taking inspiration from Challenger banks: on the lawns of retail banking?, this 2-part blog explores the pros and cons of challenger banks and retail banks.

The challenger bank: Bring on the competition

There’s nothing like a bit of healthy competition. Up until now customers have only really had the option to hop around from retail bank to retail bank, basically to get the same kind of services, in different colours and slightly different ways. Seeing big banks like RBS suffering downtime probably doesn’t instil much confidence in the customer, and branches still seem to follow the Bank Holiday ‘tradition’ from 1871. Online banking solves this for at least some of its customers.


Challenger banks are introducing some long overdue competition, giving people the opportunity to try something different. When Metro Bank opened in 2010, it was the first new company to be granted a banking licence in 150 years.

Other new banks have followed suit and are now rocking the retail banking boat with a whole new world of options, such as online-only banking.

Online banking pays off?

The advantage of this is that there are no branch networks or call centers which cost a little extra to run. New start-ups including Atom and Starling offer an online-only service, which means as well as sustaining low operating costs, they are choosing to offer lower interest rates on loans and higher rates on savings. Online-only means no complex IT platforms needing constant attention. The influx in mobile banking suggests that mobile banking is the way to go, with the number of people using it set to double in the next 4 years.


What you want is what you get?

Other digital-only banks bring social media to the mix. German digital bank Fidor, which launched in the UK in September 2015, bases its banking model around its online community, offering customers a voice in how the bank is run. Seen by some as a challenger bank to the challenger banks, this ‘disruptive innovator’ which prides itself on this modern banking technique uses its own propriety technology called Fidor Operating System, which is free of older source code and build. With newer, less familiar technologies, the proof of the pudding is in the eating, which is great if you don’t mind a little risk.

So despite all these intriguing new challengers dangling carrots before our eyes, the ‘Big Four’ remain largely unflustered. And, like the corner shop versus the supermarket, challenger banks have very big shoes to fill if they’re going to stand against the retail banks. Why? Let’s investigate.

Is mobile a temporary influx?

The question is, ‘do customers trust a bank with little or no experience as a bank?’ Only if they have good technology, 80% of Brits say. The online-only bank’s service relies entirely on the quality of its app. And if the Big Banks can get it wrong, others can get it wrong too. As well as this, what happens when a bank’s site goes down? The convenience of an online-only banking service may turn into an inconvenience when the customer least wants it. With access to money being so reliant on Wi-Fi or mobile network signal, customers could get into difficulties quite easily. With this in mind, could challenger banks be proof of Britain’s banking system mess?


Are we giving more credit than the digital challenger bank deserves?

While many of us take to new technology like a mathematician takes to numbers, there are also some technophobes among us. Around 89% of the UK uses the internet, which means 11% don’t. The percentage is lower in the USA with 87% using the internet. What’s more, only 53% of the UK accessed their bank accounts online last year. In this case online-only banks have a limited audience of only those with online access, which is barely more than half of the UK.




Dear RBS: invest in better systems. Not adjectives.

Ho hum. Another day, another example of RBS presenting IT system neglect as a ‘glitch’…

Analysts, industry commentators and – most importantly – frustrated RBS, Ulster Bank and NatWest customers took to Twitter, keen to remind RBS that their latest IT-based debacle is by no means their first offence.

Analysts, industry commentators and – most importantly – frustrated RBS, Ulster Bank and NatWest customers took to Twitter, keen to remind RBS that their latest IT-based debacle is by no means their first offence. Their most recent attempt to stretch the definition of the word ‘glitch’ was predictable to those of us familiar with their IT infrastructure and deeply irritating for those trying to access their own cash.

And as wearily familiar as the story itself – a host IT failure inconveniencing customers – were the excuses. Perhaps the RBS public relations machine has seen more investment than the IT running their banking operations, because it seems more than half a million HMRC payments had, apparently, not ‘disappeared’ at all, but were merely “delayed.” And although the problem had been “fixed”, customers would be denied access to their child or working tax credits for at least another 48 hours. Remember – these are benefits payments. Two days is a long time to wait for food.

After the comments, the reality

The footnote of an online story is rarely a repository of reasoned argument. Indeed, if you want sensational journalism and conspiracy theories then the comments section of the Mail Online usually has what you need. But the ‘Related Stories’ section after this Finextra blog is more interesting. Note how every other story relates to a meltdown, or the fine that follows it.

That’s because anyone who understand mainframes and COBOL won’t buy the legacy technology/glitch excuse. With proper investment, older mainframes running COBOL applications run just fine. As this blog points out, the DWP make 2.5m benefit payments every single day without a problem. Indeed, some high-profile organizations are using similar tech to defend whole countries and launch rockets: the US Navy is at the forefront of technological breakthroughs and NASA is helping to push back the boundaries of human understanding. No glitches there.

Our own Andy King didn’t buy the glitch angle when RBS tried it last time. Iain Chidgey of data management company Delphix, points the finger at insufficient testing. A distinctly unimpressed Vince Cable suspected “skimping on large-scale investment” is NATS systems when thousands of airline customers were left grounded by a similar computer schism. There are so many more examples.

More examples - click the image for details
More examples – click the image for details

After RBS let their customers down on – of all times – Cyber Monday, Group Chief Executive Ross McEwan described the failure as “unacceptable” and issued a heartfelt mea culpa: “For decades, RBS failed to invest properly in its systems. It will take time, but we are investing heavily in building IT systems our customers can rely on.” All good, but that was in 2013 and two glitches ago. And despite a £750m improvement programme, we seem to be no further forward. Where exactly is this “heavy investment” going?

To be fair, there has been work. But nothing beyond a low-level and inevitable ‘consolidation’ exercise that any large organisation would do to as a by-the-numbers efficiency drive or cost-cutting exercise. No-one is suggesting that these systems are not old. Clearly they are. But properly supported, older technology helps NASA send probes to Mars. And customers of other banks access their cash.

Mainframes – tomorrow’s tech?

Perhaps the issue is that RBS think they are, like many other mainframe owners, fighting fires on too many fronts to enable the innovation that could help their systems deliver modern performance from an older footprint. Banking is heavily regulated, so meeting compliance targets are a challenge. Every organization with an IT function has an IT Backlog. So there’s another. Perhaps their investment is being swallowed up by these activities that do little more than keep the lights on.

RBS recently announced better than expected financial results with pre-tax profits expected to double to £2.65bn. So the money is there. Well, let’s hope so. Imagine if the funding they had committed to application modernization and innovation was to be “delayed”? In a world where a business reputation can be destroyed in the time it takes to tweet, it makes sense to invest in core systems rather than PR. Micro Focus Mainframe solutions can enable long-established enterprise applications with modern functionality. Find me on Twitter if you want to talk more….

Delivery Velocity – cutting through the fog

As global IT faces the new digital era, how is this affecting their workload? Recent studies make interesting reading, as Derek Britton discovers

How do IT Departments ensure delivery keeps pace with unprecedented levels of demand?

I read Joe McKendrick’s article “It may be the age of cloud, but IT workloads just keep growing” (ZDNET, November 2014) with keen interest. The article draws on recent industry survey data to conclude that “development workloads are growing to the point [where] IT shops are being crushed by the demand”.

Let’s look at some of the report’s findings in more detail.


Beating the IT Backlog

First, the article explores how “output isn’t keeping pace [and] backlogs are growing”, citing a “lackluster” industry-wide IT delivery performance. The survey mentioned in the article (conducted by Mendix), is reported as stating that 89% of respondents were unable to reduce their [IT] backlog year over year. This is consistent with other industry reports, including one published by Vanson Bourne, where respondents reported an actual increase in IT backlogs of 29% within an 18 month period. IT estate complexity, accelerating business requirements, additional regulatory and compliance challenges are simply compounding the task of meeting deadlines and delivering value to the business.

Don’t Cloud the view

The promises of the Cloud appearing not to make any difference. First in defence of the Cloud the comparison (made deliberately this way I think) is nonsense. Just because you have more launch pads, it doesn’t make it any easier to build a rocket. As much as it is anything else, Cloud is a deployment platform, and fundamentally it doesn’t necessarily change the process of building, testing and delivering applications in a materially significant way.

Lacking a Cutting Edge?

Another issue reported is the tooling being used. Mendix reported many developments lacked “key elements to enable rapid, iterative and collaborative cycles”, fundamental to accelerated application delivery. Only six percent of respondents were able to deliver applications in a matter of weeks, and change requests take a month or longer in most shops. Efficiency development tooling clearly has an important part to play in effective workload delivery.

So What?

The Mendix report went on to suggest possible solutions, including implementing an application strategy, promoting and empowering development staff and modernizing the development environments.

Quite Right Too

The article touches on a number of major challenges facing the application development organization today. Where it focused specifically on newer, digital applications, the topics broadly cover appdev across a variety of technical disciplines, including core, back-end business applications. In support of business application development and delivery, Micro Focus has taken steps to support organizations looking to tackle precisely the same kinds of challenge with innovative technology:

  • Backlog Management hinges on process efficiency. Collaborative, productive and efficient tools that remove hesitancy, mistakes and unnecessary delay will enable a more streamlined delivery process. Automated knowledge transfer, rapid development IDEs and flexible, scalable testing models enable core enterprise application delivery to be accelerated by up to 50%.
  • Opting to adopt Cloud technology as a development or deployment platform is, for core enterprise application development, as simple as switching to another (fully compatible) environment. Micro Focus offers support and certification and a highly portable application environment, so that adopting a Cloud model is just a simple technical switchover.
  • Modernizing the development process also requires a more enlightened view of tooling, to support the task at hand. Collaboration across language types, unification into an industry standard, and full control by the developer over their own workspace are just normal attributes for today’s enterprise application developer.
  • An “application strategy” is supported through an automated collection and analysis process of all application artefacts, to enable key strategic questions (application value, quality metrics, cost, defect analysis, etc.) to be taken early in the cycle.


Today’s application development workload continues to challenge many organizations, and the path forward is shrouded in mist. For the core business systems, smarter technology does at least provide many of the answers facing those looking to improve their delivery velocity.