Business today is based on agility, or the ability to respond quickly when the market changes or a disruptor enters an industry, says Raghu Radhakrishnan, CEO & President, TmaxSoft Technologies Pvt Limited,in an interview with Elets News Network (ENN).
1. How important is technology and its deployment in determining a business’s success or failure?
Today, the most successful and competitive businesses in the world are digital. Think of Tata, Amazon, Uber, Google, and Infosys. They use the latest technology, open environments, and the cloud. They also reach customers, develop products, monitor sales and transactions, analyze data, and more through web and mobile applications. Therefore, I would say that a business cannot succeed without technology.
However, it’s important to note that the technology must be tuned to business in the digital age. Companies that rely on 40-year-old mainframes and legacy applications that are close to the end of life, if not there already, and huge, rigid databases and management systems that cannot scale are not going to succeed in the long run.
Business today is based on agility, or the ability to respond quickly when the market changes or a disruptor enters an industry.
This hold true for all industries, BFSI companies. Fintech startups and competitors are winning customers because of their agility. They use technology such as the cloud, modern architectures, platforms as a service, NoSQL databases, containers, data lakes, and microservices to provide the fast, high-performance engagement customers expect.
So, 20th century solutions such as on-premises mainframes, data centers, data warehouses, relational databases, and software will only hold businesses back unless they play a lesser role in running the business.
It is possible, for example, to move applications off an IBM mainframe so that only the data resides there or to deploy an open or cloud-based RDBMS for an on-premises Oracle database. Of course, the long-term goal should be to move as much of one’s core business systems and data to the cloud, but it is possible to boost agility by reducing the strain on current installations.
2. “Break free from your biggest IT headaches”: how does TmaxSoft ensure this for its BFSI customers?
Mainframes still run the core business systems of more than 60% of the world’s largest banks, financial services, and insurance enterprises. Yet, there is no bigger headache than a mainframe that is decades old. It’s slow, workloads are difficult to balance, and workarounds and patches that have been applied for years hurt performance. Many of the programmers that can maintain them are retiring. Our BFSI customers most commonly find relief for these headaches with our TmaxSoft OpenFramesolutions.
TmaxSoft OpenFrame enables our BFSI customers to rehost their mainframe applications in an open environment or on the cloud so that the workload and strain on the mainframe is reduced.
Our customers have a choice of reducing MIPS (millions of instructions per second), moving mission-critical and core applications off the mainframe onto new hardware or the cloud, or re-platforming, which converts legacy applications and mirrors their data structures onto an open system or cloud platform.
For example, the core business system (1,600 MIPS) of a global property and casualty insurance company used to run on an IBM mainframe with a footprint of 19,000 batch processes.
After rehosting, the insurance carrier reported enhancements in CPU capability (10,000 MIPS), improvements in transactions per second (4x), a response time of 200 milliseconds, and cost reductions of $17.5 million in the first five years after the project.
3. What is your view on “legacy IT?” What is the way out?
The use of the term “legacy” to describe aging existing systems has always been interesting to me. In life, but not technology, legacy has good connotations, usually indicating something valuable that has been inherited from a family member. In IT, it’s viewed as something bad. But is it really bad? There’s a reason there are 50-year-old mainframes powering the world’s largest BFSI enterprises; they have had amazing staying power. Of course, they won’t last forever, but just as you can refinish an antique, you can also optimize legacy IT so that you can get the most out of it while it’s still around, while still planning for a day when you won’t need it anymore.
I see the “way out,” as you put it, as moving legacy applications off the mainframe and onto the cloud and re-platforming them so that they can be transformed or rewritten as modern applications that deliver business agility, better performance, and lower costs. Then, it’s time to move the RDBMS out of an on-premises data center and, ideally, onto the cloud. Finally, databases are migrated onto the cloud.
That last step makes BFSI customers uncomfortable because the cloud is still viewed as an inherently unsafe place to keep confidential and personal data. However, it really is only the way out. There are great strides being made by Amazon and Microsoft in the area of securing data in the cloud.
4. How important is the role of CXOs in ensuring tech transformation? Is it on the right path, in India, specifically?
If you don’t have buy-in or sponsorship from a CXO, you won’t get very far in any kind of technical transformation. Any kind of major transformation has to start from the top, and it can’t just be lip-service. The CXO must express enthusiasm for the project, make it clear that it is the way forward for their BFSI enterprise (or any enterprise for that matter), emphasize that those who oppose it will run into problems, and then be part of changing organization culture to ensure its success.
A recent McKinsey analysis of 600 businesses in India showed that technical transformation has been uneven for all sectors, even though India as a country is highly digital, with highest potential for explosive growth in the next five years. The surge in digital solutions in the public and private sector indicate that tech transformation is on the right path but cautions that CXOs will need to do an exemplary job of anticipating the digital forces that will disrupt their businesses. More investment in modern technology, environments, and architecture is needed, but I think India is headed in the right direction. The government’s biometric database and Aadhaar, which is responsible for generating an increase in the opening of bank accounts, are excellent examples of the type of tech transformation India is capable of.
The best way to enable agility and flexibility is through digital transformation on the cloud. BFSI companies in particular must stop relying on mainframes to run their core business systems, which are no longer efficient, and reduce, if not eliminate, on-premises data centers by moving traditional infrastructure to the cloud. Many of the world’s backends are a combination of mainframes, relational databases, transaction monitors and J2EE Application Servers, and moving them to the cloud and re-platforming or rewriting them will result in greater agility and flexibility.
Mainframe rehosting in the cloud and infrastructure modernization offered by TmaxSoft OpenFrame and our other solutions—Tibero, Jeus, and Tmax—provide the performance, speed and availability needed to complement the demands of banking, financial services, and insurance customers in the 21 century.
The applications that are migrated to the cloud run in a modern architecture, making organizations more agile and competitive while providing a platform for future growth. Operating systems in rehosted mainframes are open, and they integrate with the new technology required to achieve a competitive edge in the insurance marketplace.
Not only are there cost savings, but BFSI customers gain greater flexibility, which can drive and deliver instantaneous, highly personalized experiences similar to those on mobile devices to consumers, policyholders, brokers, and agents. There is no negative impact on the enterprise or on the measures already in place to address regulatory compliance and data security, and it requires minimal training.