BBVA Banks on Modern Systems for COBOL to Java Modernization

Banking Giant Moves From COBOL to Java

As many a Gartner analyst will attest, COBOL to Java application modernization is becoming a high priority for banks across the world. The ability to reduce costs while enabling data and business process integration is necessary for competing in today’s global banking environment.

BBVA is the second largest bank in Spain.  Since 2006 the bank has focused on overseas expansion, and now operates in 40 countries.  Like many other Spanish companies, it enjoys a top tier position in Spanish-speaking Latin American countries.  BBVA’s debt market operation in Mexico, Chile, Colombia and Uruguay is dominant.  It has a strong retail presence in southern European countries, especially Spain, Portugal and Italy, and has expanded into the United States and Asia.
legacy modernization, cobol to java, idms to oracle
VASS Consultoria de Sistemas,  one of the major consulting companies in Spain, was selected to run the project as the prime contractor.  Modern Systems, then known as BluePhoenix, was subcontracted to perform the actual migration of IDMS, ADS, COBOL, Easytrieve and JCL.  The converted systems went into production in September 2013.

Critical Factors Driving COBOL to Java Modernization

BBVA’s primary objectives were to cut licensing costs of the mainframe and free up data trapped in an IDMS database.  BBVA decided to modernize two applications, both written in COBOL, ADS and Easytrieve. The target for the migration included Java and Oracle database.  BBVA wanted the new system to be an exact copy of old system, as the legacy application’s business logic and user interface were satisfactory to the business.

Upon successful launch of the online and batch applications, overall system costs were cut significantly.  Just considering direct license savings, BBVA project leaders predicted positive ROI for the entire effort would be achieved within 2 years.  There was the additional strategic benefit of risk reduction around IDMS resources, which are expensive and difficult to find. A big positive of legacy modernization is the ability to leverage highly available, cost-effective resources to run the target environment.

Lessons Learned

As with most modernization projects, a deep understanding of the source system is essential. This is often difficult, as these systems can be over 30 years old, having passed through multiple hands with minimal documentation. A legacy assessment exercise is the first step in every Modern Systems project. This maps out the total technical inventory, technical use cases, identifies risk factors and unused programs. For the COBOL applications, we identified large amounts of dead code and 876 unused programs out of 2311 supplied programs approximately 38% unused programs!

Keys To Success

It’s critical to understand the application’s relationship with the business. If the application isn’t isolated, prepare to put lots of effort into bridging. We worked closely with BBVA and VASS to ensure both teams were prepared with the proper human and material resources.

Another overlooked key to success lies in understanding people. Legacy systems are still in play because they’re effective and have been run by talented, dedicated people.  It’s important these people have a visible and impactful role in your modernization project. BBVA, VASS and Modern Systems worked hard to ensure close collaboration between the project’s sponsor and the old system’s owners.

You don’t want to spend half a project fighting each other, so get together early and often to chart a mutually beneficial transition. Remember- people are always the most important part of a successful COBOL to Java modernization!

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