Mainframe Cost Reduction Strategies You Can Use Right Now

Mainframes continue to run critical operations for banks, insurance providers, healthcare systems, and government agencies. These platforms are reliable, secure, and proven—but they can also be expensive to maintain, especially when using third-party software duplicating IBM functionality.

If your organization is looking for immediate ways to lower costs without compromising performance or security, it’s time to examine your mainframe environment more closely.

Here are several practical strategies you can use right now to drive mainframe cost reduction and improve business outcomes.

Start with a Clear Software Inventory

You can’t reduce what you haven’t tracked. That’s why one of the most important first steps is to complete a full inventory of the software running on your mainframe.

List everything:

• What tools are installed?
• What tools are active?
• What tools are licensed but not used?

This process gives visibility into what’s consuming resources. Many companies discover they’re still paying for tools no longer in use. Others find software that duplicates what IBM already provides.

Cleaning up that list leads to quick savings.

Replace ISV Software with IBM Tools

One of the most effective IBM software cost reduction strategies is to eliminate Independent Software Vendor (ISV) tools that duplicate IBM functionality. Many of these third-party products cost more than their IBM equivalents.

If you're using a third-party tool for job scheduling, reporting, or database management, chances are IBM has a native product that can replace it. IBM tools typically integrate better, are more secure, and qualify for better licensing terms.

The Smith Group focuses on this specific solution. They help businesses make a seamless shift from ISVs to IBM-native tools—reducing costs while improving efficiency. This move improves ROI and lowers the ongoing burden of licensing and support contracts.

Optimize MIPS Usage Across All Workloads

MIPS consumption is one of the largest drivers of mainframe cost. Every workload that runs on your system consumes CPU cycles, and those cycles add up.

To manage this, look at:

• Which workloads run during peak hours
• Whether batch jobs can be rescheduled to off-peak windows
• How many unnecessary processes run by default
• Whether jobs are still running for historical or audit purposes, without business value

Even small adjustments to batch timing, memory usage, or job priority can lead to significant mainframe cost reduction over time.

Use Modern IBM Licensing Options

IBM offers pricing models that better reflect real usage. Tailored Fit Pricing (TFP) is one example. This model allows businesses to control and predict costs more effectively than traditional MLC (monthly license charge) models.

Many organizations stay with outdated licensing simply because it’s familiar. But switching to TFP or other modern pricing structures can unlock measurable savings, especially when combined with software cleanup and workload tuning.

Work with a team that understands how to assess your usage and recommend the right licensing model. That kind of guidance turns IBM pricing into a competitive advantage.

Automate Routine Tasks to Save Time and Cost

Manual processes lead to delays, errors, and higher staffing needs. That’s why automation supports mainframe cost reduction on both the technical and operational levels.

Start by automating:

• Job scheduling
• File transfers
• System monitoring
• Error alerts
• Backup routines

When your team spends less time on manual tasks, they spend more time on value-driven projects. Automation tools can be IBM-native or third-party. The key is to choose the right ones for your environment—and make sure they reduce manual overhead, not add to it.

Review Capacity and Storage Management

Overprovisioned capacity leads to wasted spend. If your mainframe is sized for a workload you no longer run—or for peak demand that no longer exists—you may be spending more than necessary.

Analyze your capacity:

• Are you using all available resources?
• Are some apps using more storage than they need?
• Can compression or archiving reduce usage?

Storage and capacity audits often reveal hidden opportunities to reduce costs. You don’t need to compromise performance. You need smarter data management.

Phase Out Legacy Apps That No Longer Add Value

Legacy applications create hidden costs. They often require older infrastructure, duplicate data, or depend on hard-to-maintain skill sets.

If an application no longer aligns with current business needs, plan to retire or replace it. Doing so:

• Reduces license costs
• Cuts maintenance workload
• Frees up resources for core applications

Work with business units to determine which apps can be retired without risk. This approach keeps your mainframe focused on mission-critical tasks.

Consolidate Mainframe Operations Where Possible

Some organizations run multiple mainframe environments across business units. This setup leads to siloed costs, inconsistent operations, and higher overall spend.

Consolidating systems or standardizing across divisions simplifies management. It also improves purchasing power and streamlines updates.

If full consolidation isn’t possible, consider partial consolidation—shared services, common tools, or unified reporting.

Next Steps for IT Leaders

Start where it matters most:

• Identify your top three cost drivers
• Review where third-party tools duplicate IBM capabilities
• Build a roadmap that focuses on measurable outcomes

Mainframe cost reduction doesn’t require disruption. It requires smart analysis, focused action, and support from experts who understand the platform inside and out.

Unlock Savings Without Sacrificing Stability

The Smith Group helps enterprise organizations take control of their mainframe spending. Their focus on IBM software cost reduction through strategic ISV replacement ensures clients lower their operating costs while maintaining the reliability they depend on.

Explore proven cost reduction strategies with The Smith Group—and start getting more value from your mainframe investments today.