Brent Phillips - 27 August 2018

It’s becoming increasingly common for organizations to outsource, or consider outsourcing, their z/OS mainframes. There can be compelling arguments for the business executives to outsource as an efficient way to cut costs, eliminate risks, and focus on core business competencies (which is not necessarily IT).

The reality of these outsourcing agreements, however, often proves different than the theoretical value proposition. Outsourcing agreements are important and expensive, and it is important to have third party analytics to ensure Service Level Agreement (SLA) compliance and cost-efficiency optimization.

This doesn’t mean outsourcers are the bad guys. As IntelliMagic partner Cheryl Watson stated in our recent joint webinar, Performance and Capacity Insights for your Outsourced z/OS Mainframe, “I have never met an outsourcer that doesn’t try to do the very best they can for their customer.” But the challenges that plague performance and capacity analysts at almost every mainframe shop – that of being overworked and understaffed – is even more true for outsourcers.

If you’ve already outsourced your mainframe operations, it is easier than most people think to provide application and infrastructure performance and efficiency analysis and advice to the business. This can be a high-value investment that often can pay for itself. If you haven’t yet outsourced, it is very important to provide well-written SLA parameters per application.

Common Areas of Struggle after z/OS Outsourcing

The most common reasons for an organization to decide to outsource their z/OS performance operations are typically:

  • Align Strategy
  • Reduce Risk
  • Lower Costs

However, as we and our partners have regularly seen, it is in these very areas that issues very often arise.

Align Strategy

Mainframe outsourcing is usually an executive decision intended to drive the focus of the organization towards the core competencies of the business and outsource “non-core” aspects of the business. If the organization is already planning on moving off the mainframe, this can also be an appealing move as a transition to migrating off.

However, if an application is the primary enabler for a core line of business, then so is the efficient delivery of its required service levels. And it’s often significantly more difficult to ensure and control the delivery of those service levels once outsourced.

Reduce Risk

Outsourcing operations to somebody that does have a core competency focus on delivering IT infrastructure and service levels and who understands how to keep the environment modern and secure is a great way to reduce risk. This also eliminates the risk of losing critical staff to retirement as the skills shortage continues to grow.

However, very often the experts involved with looking after your business’s key areas are also juggling many different clients and cannot provide the dedicated attention needed for those key areas.

This ensures that actions are often reactive rather than proactive, response times are elongated, and proactive work often decreases – the very opposite of the reasons why the business chose to outsource to begin with. The outsourced staff are normally only allowed to perform tasks that are specifically required in the outsourcing contract, for example.

Lower Costs

It intuitively makes sense that a z/OS outsourcer, whose entire business is maintaining these infrastructures, would be adept and efficient at reducing operational costs. However, it is also important to consider the incentive to optimize costs.

If the software costs (MLC for example) are passed onto the customer in one form or another, and no optimization expert is tasked with minimizing costs, then it would be very unusual for this optimization effort to occur. Consequently, many outsourced sites likely have safe cost reduction that could be realized.

And as Cheryl Watson points out in our webinar, the reality is that often the contracts are written in such a way that there is actually a conflict of interest where the outsourcer is disincentivized to optimize costs in a way that might cut into their income.

How to Overcome the Struggles of z/OS Outsourcing

These struggles are not unique to outsourced customers in the slightest. Strategy, risk, and cost struggles similarly affect non-outsourced customers who have not modernized their z/OS Infrastructure Operations Analytics and are instead relying on outdated, manual processes to run their environment.

However, these struggles are exacerbated in the outsourced environment. This is because the contractual obligations list the specific services that are included, and regular cost-optimization is likely not on the list. Also, the outsourcers financial margins from the contract are allocated and do not allow for investment from the outsourcing side in new initiatives unless the business is willing to make those incremental investments.

Those issues provide additional hurdles beyond the normal technical challenges of how to understand the performance and configuration data using the cumbersome reporting tools designed decades ago that make the process almost impossible.

Third Party Validation

The solution to ensuring that an outsourcer delivers the optimal performance and in the most-cost efficient manner is to utilize third party validation services that leverage modernized, AI-driven analytics on the performance and configuration data. This modernized approach also opens up new value with performance health reporting by application, and processes for automated application performance testing from the infrastructure perspective, which can reduce the risk when moving new releases of an application to production.

Third party validation services that leverage modernized analytics can deliver very efficient tasks such as:

  • Continuous scanning of z/OS infrastructure health by application
  • SLA/Performance management and capacity planning advisory services
  • Cost optimization and infrastructure modernization advisory services

z/OS outsourcing is a very expensive and important relationship and having a trusted third party come in to ensure that the contract requirements are being met and costs are minimized provides value for the outsourced company that it is receiving the proper attention and optimization it’s paying for and ensures that the outsourcer meets its obligations. On the other hand, it can also help prove from the outsourcer perspective that it is meeting its obligations.

Utilizing third party validations eliminates the tension from both parties and helps to foster a trusting and mutually beneficial relationship. Technical staff at the outsourcer, if they get access to the modernized analytics, will also benefit.

Modernizing Your z/OS Infrastructure Performance Analysis

The key to efficient and effective validation services is modernized z/OS infrastructure performance analysis.

AIOps is the most-recent label for solutions which apply Artificial Intelligence to IT Operations Analytics. IntelliMagic has been building these solutions for over a decade and has the most robust and complete AIOps solution for RMF and SMF performance and configuration data analysis.

This solution uses AI to process, interpret, correlate, and rate key metrics automatically. The result is an interactive, GUI-based interface with context-sensitive drilldowns, rated metrics which guide problem resolution, and recommendations to aid in understanding and resolving issues.

This elevates the impact of the human performance analysts looking at the environment – regardless of whether they are outsourced or insourced – and provides many benefits in outsourcing environments such as:

  • Automated metric analysis is cost-effective and helps both sides
  • Will usually pay for itself in savings and fewer production performance issues
  • Bringing AI to the team results in happier customers and better outsourcing relationships

Ensuring Optimal Performance and Cost Efficiency for Your Outsourced z/OS Mainframe

Having your z/OS mainframe outsourced doesn’t have to be a source of frustration.

If you haven’t already, I encourage you to watch the webinar, “Performance and Capacity Insights for Your Outsourced z/OS Mainframe” that was co-hosted by IntelliMagic, Edge Solutions and Consulting, and Watson & Walker. In the webinar, we discuss these topics in more depth.

Charles Hinkle of Edge dives into a real use case where an independent validation of service levels helped both the outsourced company and the outsourcer.

And Cheryl Watson offers her insights from having worked on both sides of the outsourcing equation over the course of 30+ years. Her perspective on the top problems and solutions in outsourcing is extremely valuable and worth the watch.

And if you’re interested in learning about what outsourcing solutions and services these three companies can provide for your outsourced z/OS mainframe, click here to learn more.

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This article's author

Brent Phillips
Managing Director, Americas
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