Having blogged last week about the replacement of a custom mainframe banking solution with a vendor mainframe banking solution at Citi, this week I’m turning to an organization taking an entirely different track. Currently under the shadow of the ash clouds drifting over northern Europe from Iceland's Eyjafjallajokull volcano, is a banking data center in Copenhagen, Denmark. The Skandinavisk Data Center (SDC) runs banking operations for over 150 banks across Denmark, Sweden and Norway. Cost reduction initiatives in back office processing are certainly not new, but the recent financial crisis certainly exacerbated the need to trim operational budgets. Like many banks, SDC sought a lower cost platform for mission critical operations but without the need to immediately rewrite vast amounts of legacy code. The solution? Danish newspaper ‘Bǿrsen’ reported that SDC has committed to replace its mainframe processing by 2012 with Microsoft Windows Server running on Fujitsu hardware. Of course, the difference in scale between Citi and SDC is huge, but with an estimated saving of over 100 million Danish kroner (US $18M) per year, that is serious money indeed!
Rock and a Hard Place
Bank CIOs are often between a rock and hard place. There’s a need to replace that aging technology for core operations and payments, yet perhaps unable at this time to invest in a completely new SOA-based real-time system. SDC has found a way to move forward. By porting legacy code to a modern more cost effective platform, they can immediately reduce costs and buy time and flexibility to implement a code renewal strategy.