A key function of government is, of course, the collection and payment of money.

A big part of that in the UK public sector is provided by Paymaster, formerly known as the Office of HM Paymaster General.

Since privatisation, the operation is one of the largest providers of outsourced financial services in the UK. It covers pensions administration, payroll and annuity services but is still a big arm of UK benefits. Over two million pensioners throughout the world, whose total pension payments are in excess of £7 billion a year, get their money through this system.

"It was imperative that along with removing the mainframe the migrated suite had to run with almost total transparency to the staff who use it"

Ralph Tigwell, director of business technology, Paymaster

What is interesting is that this body has now almost completely turned its back on mainframe technologies in favour of what it says are cheaper and more cost-effective Windows and Intel (HP two-way) platforms.

Of course, it is not that unusual these days to see organisations moving away from what was once must-have hardware to newer platforms, nor to see them enjoying immediate benefits from the move. A recent example in the publishing industry was Express Newspapers, which moved key editorial applications off the mainframe and on to Windows servers. A move, it says, saved £830,000 a year in IT costs.

The Paymaster General

The Office of HM Paymaster General was established in 1836 to coordinate the payment functions for public sector organisations, in particular, pensions and payroll administration.

The long-standing civil service function moved into the private sector with the election of New Labour in 1997, providing services for both public and private sector companies. The group offers pensions and payroll administration, payroll processing, data cleansing, annuities management services for insurance companies as well as back-office functions for banks and investment services. There is a government minister called the Paymaster General – currently Dawn Primarolo – to who HM Revenue and Customs formally reports.

Critical migration

But it is notable when public sector universe organisations – once the homeground of the old ICL user base – take similar radical steps in search of a more cost-effective IT.

Paymaster has migrated what was a mission-critical Cobol-based banking suite off a legacy ICL mainframe to a Windows 2003 environment with technology provided by Transoft, part of Computer Software Group, via its Legacy Liberator system.

The system in question ran critical code for the control and reconciliation of all the payable orders which Paymaster processes on behalf of its public and private sector clients, such as governmental movements of money.

Ralph Tigwell, director of business technology at Paymaster, says: “It was the last remaining application on our ICL mainframe which we had planned to shut-down and be removed by the end of April 2006. So it was imperative that along with removing the mainframe, the migrated suite had to run with almost total transparency for the staff who use it.”

The good news is that the move was successful and the big iron has been switched off.

Tigwell says this has not only saved significant costs but it is processing work much faster than before which means Paymaster was able to move to a single shift.

The overall investment in the project, £250,000, was paid back within 10 months. The code now runs at about 10 to 30 times faster and on much cheaper hardware, says Tigwell, while the batch window has shrunk from its previous three to six hours a night to just one.

The port worked by translating the ICL flavoured Cobol to a more ‘open’ version from Micro Focus. At the same time, a special monitor replaced the ICL green screen system interface to provide the same look and feel of the old system in the new environment.

The technical feat only really has significance from a business sense, though. Paymaster’s banking services director David Nunn says: “If we had not been able to migrate the application off the ICL mainframe we would have had to renew its lease for a further year at considerable cost. It is a directly measurable benefit.

“We now have the application on a much lower cost platform and, with the increased performance, we are now able to take additional steps to further automate the suite and reduce the cost of its operation.”

Deadline pressure

Not that this transition has been a weekend’s work – the planning of the operation dates back to 2000. “We have had this business aim for some time but what really focused our mind to get this part done was the supplier’s announcement it would cease Trimetra support from the middle of 2006,” says Tigwell. “That gave us a real deadline. We didn’t want to face the expense of either buying the latest replacement host or even leasing a temporary box.”

The migration of the banking suite was started in October 2005 and crossed the finish line in April this year. An added attraction of working with the selected supplier was a fixed-price contract. But as important as money is in a project like this, equal focus was given to the migration and making sure users were disrupted as little as possible. “We had to make sure all this went as smoothly as possible,” he stresses.

"If we had not been able to migrate the application off the ICL mainframe we would have had to renew its lease for a further year at considerable cost. It is a directly measurable benefit"

David Nunn, banking services director, Paymaster

This was achieved and is another reason the project has been seen as a success internally, while other benefits have included extra and, in some ways, unexpected functionality. What Tigwell describes as the ability to “integrate easily, extract data and produce consolidated reports”.

Another advantage is that this is not a new system. There is no need to retrain staff or take them out of front-line positions, they simply pick up what they know and carry on in the fresh system. “What we want to do now is look at where we need to go next, investigate all our options and see how we can make the best use of the jump we have made in terms of time and cost,” he says.

This will take the better part of the next six months as the migration’s impact starts settling in. Of course, there are many mainframe stalwarts out there claiming the central host is still a reliable workhorse for the big problems. And this is backed up by figures – in 2004, revenues for IBM’s zServer mainframe business grew by 15 per cent. It may be a while before the last public sector user turns off the last mainframe.

But as Paymaster shows – and other projects like The Royal Borough of Windsor & Maidenhead which last year in a similar migration slashed running costs of one key system from £300,000 to £10,000 – for some applications the day of big tin is most definitely over.