As Published In
Oracle Magazine
March/April 2008


Moving Forward

By David Baum

Oracle streamlines legacy systems and speeds the enterprise to SOA.

The world of information technology moves relentlessly forward, and many CIOs find themselves in a quandary. Some of their legacy information systems were created when programmers took it upon themselves to automate processes in the workplace using COBOL, IP Multimedia Subsystem, virtual storage access method (VSAM), Natural, and a wide variety of other now-aging technologies and tools.

As much as 80 percent of IT budgets are spent operating and maintaining these legacy applications, and this percentage is projected to grow in the next few years. That doesn't leave much budget for new development, let alone the type of IT transformation required to take advantage of open systems, service-oriented architecture (SOA), and process-driven workflow systems.

Pathways to Modernization
Pathways to Modernization
Download pdf

While companies are challenged to embrace open standards, internet computing models, and SOA, they also can't afford to throw away the mission-critical content of their entrenched business systems. And standing still is not an option for businesses as the competitive pressures to become more agile and move to cost-effective IT architectures continue to grow.

Moving Forward

Some organizations are moving their business operations away from aging applications and into more-flexible and more-versatile IT environments—a process called IT modernization. These organizations are modernizing by retaining existing application asset content while transforming these assets to modern languages, database systems, and SOA services. The tricky part, however, involves preserving the business content of these applications as they are transformed to the new environment. This is especially important when the business knowledge encapsulated within legacy applications is unknown outside of those applications.

"We've seen a lot of organizations looking at how they can modernize their applications," says Rebecca Wettemann, vice president of Nucleus Research, a firm based in Wellesley, Massachusetts.

"As companies look to the next generation of enterprise applications, they are trying to design solutions that streamline management, require less administration, and require less troubleshooting, while providing more availability to end users," Wettemann says.

Most modernization efforts begin with an assessment of the legacy application portfolio to determine the state of current systems, which applications are the best candidates for modernization, and which modernization techniques will deliver the greatest returns. A big part of this process is a frank assessment of the IT workforce. People with skill sets in legacy technologies such as COBOL, Adabas, and integrated data management system (IDMS) are simply getting harder and harder to find.

The next step is to examine the best modernization approach. Legacy modernization can be approached several ways, including SOA integration, rehosting, automated migration, commercial off-the-shelf (COTS) replacement, and rearchitecting.

On Track for Automated Conversion

The Danish Commerce and Companies Agency (DCCA) decided to modernize an IBM MVS mainframe system that processes more than 350,000 business registrations each year. As part of the Ministry of Economic and Business Affairs in Copenhagen, the DCCA is responsible for regulating companies, accountants, real estate agents, authorized translators, interpreters, restaurants, and hotels.

According to David Graff Nielsen, a project manager and IT architect at the DCCA, their environment was expensive to maintain and didn't easily integrate with the agency's newer information systems. "We absorbed high facility management costs, partly because our registrations were scattered over a large number of dissimilar systems and platforms," he says.

The DCCA hired Oracle modernization partner BluePhoenix Solutions to transform this IBM MVS system from an OS/390 environment to an Oracle/Java Platform, Enterprise Edition (Java EE) environment on a Linux platform. The agency's goal was to maintain the level of functionality provided by the existing system while adopting a more modern and flexible software platform—and to do the migration automatically.

"The advantages of automated migration are speed and consistency," says Lance Knowlton, vice president of modernization solutions at Oracle. "Since a computer carries out the conversion process, it can be done quickly and consistently and can even be repeated on a more recent copy of the source code to include ongoing changes." However, Knowlton says that as with all automated tasks, "these types of conversions are most successful when there is a well-defined and understood mapping between the source and target architectures."

Another prerequisite for a successful automatic migration is high-quality source code. In the DCCA's case, BluePhoenix took an inventory to determine the scope of the migration effort and identify obsolete code. Then the modernization team created a rule set for converting Adabas to Oracle Database and Natural to Java. Next, they used BluePhoenix' DBMSMigrator for Adabas/Natural to migrate the Adabas/Natural applications to a relational system, with careful attention to those specific constructs such as reinput statements as well as all Natural objects including programs, subprograms, maps, data area types, and so forth.

In all, the DCCA migrated more than 2,700 Adabas/Natural programs, totaling 1 million lines of code, and 200 Adabas file views. Additionally, the DCCA converted 1,000 Natural character-based screens to graphical Web screens. The new system has been working well in production for more than a year. "About 80 percent of the code was converted without issues, and the new applications work as expected," says Nielsen.

In a typical month, the DCCA runs 800,000 transactions over its new applications. Since adopting the new software platform, managers have seen a 50 percent reduction in application operating costs, and they expect to achieve a complete return on investment in three to five years, Nielsen reports. The DCCA is churning these savings back into the business by accelerating the deployment of Web-based services, leading to a faster, safer registration process.

"The automated migration is a step toward a more radical rearchitecting of all of the agency's registration systems," Nielsen says. "The agency plans to rework the modernized application as it gradually adopts SOA."

Old Locomotive, New Train

Another approach to modernization, called rehosting, involves migrating legacy application code to a modern underlying database and hardware platform while leaving the application logic largely untouched. This is done by using a layer of software that looks like the legacy environment to the application code but in actuality is running on an open systems platform.

This was the strategy selected by Royal London Group, which as the U.K.'s largest mutual life insurer manages more than US$55 billion in funds for more than 3.5 million customers. Royal London depended on Unisys mainframe systems to run its life assurance and pension administration systems. These business systems handled hundreds of thousands of transactions per day, supported by overnight batch runs.

According to Brian Henderson, head of technical design at Royal London Group, the mainframe systems were having a hard time handling an increasing number of business transactions while delivering the quality of service internal and external customers required. Henderson's team also wondered how long the underlying technologies would be supported and enhanced by Unisys. "Due to the size and complexity of the applications, we were encountering technical and capacity limits, resulting in batch process overruns and unacceptable downtime for online users," Henderson says.

The unpalatable cost of upgrading the Unisys hardware and software environment, coupled with the underlying infrastructure issues, led Royal London Group to look at modernization options, including rearchitecting, rehosting, and COTS replacement.

According to Nucleus Research's Wettemann, many companies are adopting a "plain-vanilla, out-of-the-box" strategy as much as they can. "We see a lot more organizations looking toward the vanilla approach just because it's so much less risky and less costly to develop and deploy. It's also less costly to upgrade in a lot of cases," she says. "But what they can do with integration technology and solutions like Oracle Application Integration Architecture, for example, is take those pieces that are very specific to their industry or even their business model and link them into that broader architecture that is more horizontal in nature."

Royal London ultimately decided to rehost the code because the firm believed it would be the least risky and most cost-effective alternative within the required timeline. The company engaged with HP as the hardware and infrastructure provider; Oracle as the database vendor; and MSS, an HP and Oracle modernization partner that provided the automated toolset to translate Unisys EAE and COBOL code to C, PL/SQL, and Micro Focus COBOL on a UNIX platform.


Danish Commerce and Companies Agency

 Location: Copenhagen, Denmark
 Industry: Government
 Employees: 275
 Oracle products: Oracle Database

Royal London Group

 Location: Edinburgh, Wilmslow, and London, U.K.
 Industry: Life assurance, protection, investments, pensions, and general insurance
 Employees: 2,570
 Oracle products: Oracle Database, Oracle Application Server, Oracle Data Guard

Government of New Brunswick

 Location: Fredericton, New Brunswick, Canada
 Industry: Healthcare
 Employees: 39
 Oracle products: Oracle Database

The project took 18 months to complete, culminating in a switch from the Unisys system to the Oracle/UNIX system over just one weekend. At that time, the team rehosted 10 million lines of application code and transferred 750 million data records to the Oracle database.

"The vast majority of the migration was automated using the MSS toolset," Henderson reports. "However, there were a small number of certain scenarios, particularly in the COBOL arena, where we had to write scripts and incorporate them into the migration process."

The new business systems are hosted by 12 HP servers, and Henderson is pleased to report significantly improved performance from the Oracle/UNIX environment. "We have reduced the overnight batch runs from 11 or 12 hours to 4 or 5 hours, which allows us to process business over an extended working day," he says.

While most of the rehosting process went smoothly, Henderson admits that some of the rehosted mainframe code remained difficult to change and test in the new environment. "We have gradually reduced our reliance on the legacy migrated code, but it has taken longer than expected," he says.

"However, we have a long-term strategy for moving to a more open environment, and new projects are exploiting opportunities to redevelop existing code," he adds. "On top of this, achieving a return on investment within two years and halving IT operating costs on the modernized application infrastructure has marked the project as a huge success."

Stoking the Architecture

Many organizations today feel so compelled by the importance of getting the full value of modern IT architectures and open standards that they choose to rearchitect their legacy systems. Rearchitecting a legacy environment allows businesses to retain business-relevant processes and assets from legacy applications while eliminating all dependence on legacy technologies. Rearchitecting is common for modernization efforts that require fundamental changes in the design of the application to adopt an SOA architecture including the full use of new technology areas such as business intelligence and business rules engines.

The Government of New Brunswick, Canada, chose this approach to modernize its Medicare system, which processes between 6 and 7 million physician claims per year. The current Medicare system, which was implemented in 1982 by the New Brunswick Department of Health, is based on a Unisys mainframe system running an OS 2200 operating system and a DMS 2200 database.

The Department of Health decided to vacate the legacy environment and move to more-modern and cost-effective technologies. The agency considered a number of alternatives to rearchitecture, including outsourcing the Medicare system to a private consortium.

The Department of Health began by analyzing the legacy environment through a set of tools and processes provided by Oracle modernization partner Make Technologies. During phase one, the application's operational and functional characteristics were documented to establish a baseline for the new Medicare application. Then the agency used Make's Transformational Legacy Modernization technology, which involves extracting the intellectual property residing in the existing application and transforming the legacy data, assets, and processes into a Web-based, Java EE SOA application based on an Oracle database.

Travis Foster, project manager at the Department of Health, says that the Medicare project is progressing as expected, despite an initial limited understanding of the embedded logic in Medicare's legacy source code.

"Moving away from the legacy character-based screens to more-streamlined graphical user interfaces will allow Medicare staff to perform their daily tasks more efficiently," he notes. "It will be easier to train new employees and less expensive to maintain the system."

Having extracted the core content of the existing environment, Foster and his colleagues are determining the final design for the new rearchitected Medicare system, a process that will be completed in May of 2008. The Transformational Legacy Modernization methodology and toolset will then be used to rearchitect the core content into the new design. The projected payback for the Medicare modernization project is five years, based on annual savings in maintenance costs of CA$1.6 million.

Staying on Track

Next Steps

READ about
Oracle IT Modernization
Oracle IT Modernization Techniques
SOA Modernization Architecture
Oracle Modernization Alliance

Undertaking these modernization projects has both pros and cons. One of the biggest drawbacks comes with the extra responsibility of taking on a mission-critical long-term project and commitment. That's why Foster advises careful preparation: collecting existing documentation and setting a clear strategy and vision before moving forward. "There is no silver bullet when doing a legacy modernization project," he says. "Success is dependent on the organization committing the necessary resources."

Royal London Group's Henderson agrees, saying that the key lesson his team learned was to invest as much effort and time as possible in an initial proof of concept with the technology partners. "This will pay big dividends in the overall program timeline," he says.

In the end, each organization must determine its own modernization road map based on its own specific business drivers, legacy technologies, aversion to risk, and other business factors. But once the determination has been made that modernization makes sense, the important thing is to get started.

"While some organizations might make the mistake of thinking that there is no compelling need for modernization, doing nothing can be a recipe for disaster," cautions Oracle's Knowlton.

"Today's newer generation of IT staff is not skilled in legacy environments, and this situation will likely get worse," he says. "Better to invest today, while there is still time to define an optimal modernization road map, than to find yourself with a bigger problem tomorrow."


David Baum ( is a freelance business writer based in Santa Barbara, California.

Send us your comments