Four years ago, Charlotte, N.C.-based Wachovia Bank realized all of its eggs were in one very small proverbial...
Like many other companies in the financial industry, the bank was running a very large, custom-built mainframe application. The problem was that the technicians maintaining the legacy code worked for a small outside firm. Tim Truelove, vice president of treasury finance balance sheet management technology at Wachovia said after the Sept. 11 terrorist attacks, management realized the inherent risk in that structure.
"The company [that designed the application] was very small. They all traveled together -- hung out together," Truelove said. If something ever happened to the small code maintenance firm, Wachovia would be left high and dry.
Under fire from auditors to mitigate that risk, Wachovia set out to find an off-the-shelf application to replace the customized program.
Wachovia had no team, no one that could go in and do any work at all, according to Truelove. Everything had been handled by the vendor. "So, as you can imagine, Wachovia did go out and try to find an off-the-shelf application and couldn't do it," Truelove said.
Instead, Wachovia decided to maintain the existing code and bring it in-house.
According to Truelove, Wachovia had well over 10 million lines of code and 6,000 programs. The applications ran on, z/OS and used DB2, and CICS. The vendor had used its own code generator for developing and maintaining the programs. Wachovia set out to find its own tools to support the applications. The bank picked application modernization specialists, Raleigh, N.C.-based Relativity Technologies Inc. to help with the project and used Relativity's Modernization Workbench tool to rein in the code.
When it came to selecting Relativity's tool set, Truelove said Wachovia put out its standard request for proposal (RFP) and chose it based on cost and availability.
"At the time, IBM didn't have this product -- a modernization workbench to allow us to do enhancements and support. I don't think they had anything that could support us on that end," Truelove said.
The Workbench tool is PC-based software that allows users to analyze legacy code, parsing applications to extract information from the system. The software can then predict the impact of changes. Wachovia used the tool set to reduce coding redundancy, dropping from 10 million lines to 6-7 million lines of code. The bank identified programs that had the same functionality, multiple copies of a program and duplicate programs under multiple names.
"Since [the applications] were code-generated, an important part of the analysis was identifying all of the dead code," Truelove said. Throughout the project, code was being redeployed while the applications were still in production.
With the newly streamlined code base up and running, Truelove and his team have since turned to application tuning. "We're going in and fine tuning the links to DB2 and the way it's handling the data," Truelove said. "We've been trying to do that as we do analysis -- getting better use of computing resources."
The new insourcing trend
It seems counterintuitive to hear a story about a company bringing mainframe skills and programming back in-house. But this isn't an isolated incident. A recent Forrester Report, titled "Logistics Firm Corrals App Maintenance Costs," tells the story of an unidentified global logistics firm that brought its COBOL code maintenance in-house to cut costs.
From the report: The annualized bill for the operation and support of this particular application was almost $14 million. The firm used an application mining tool to guide its decision to insource, cutting the bill down to $5 million. The firm was able to restore much of its lost application knowledge and improve its scoping and estimation capabilities.
Truelove currently has 15 mainframe people on his team. He's working on an extremely large project, automating the application and taking some of the manual tasks to an external vendor. Eventually, he expects to be running with a staff of eight or nine, but said it may stay at 15 for a while.
Truelove said he has offshored some tiny applications, "time-wasters" for his staff, earlier this year. But overall, "Wachovia has been conservative in offshoring altogether," he said.
It should be noted that Wachovia Strategic Ventures provided Relativity with $6.5 million in venture capital funding back in 2004.
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