Business challenge

Digitization and regulatory pressures were driving higher workload variance on the large IBM Z landscape at Fiducia & GAD. How could the banking service provider meet SLAs more cost-effectively?

Transformation

Fiducia & GAD IT AG adopted the new IBM Tailored Fit Pricing model and is upgrading to IBM z14® technology, removing constraints on the use of capacity and making pricing less driven by workload peaks.

Results

5% lower

system response times across production landscape

20% faster

application development

25% lower

elapsed time for nightly batch

Business challenge story

Unpredictable demands

As the IT service provider for more than 900 banks in Germany, responsible for 82 million customer accounts, Fiducia & GAD operates one of the world's largest implementations of IBM Z® technology to support its core banking systems.

In recent years, workload on the systems managed by Fiducia & GAD IT AG has become increasingly unpredictable, driven in part by the ongoing digitization of banking services. Looking to the future, the coming introduction of both instant payments and the second European Union Directive on Payment Services (PSD2) represented a potential significant increase in workload.

Thomas Heitlinger, System Planner at Fiducia & GAD IT AG, says: "PSD2 requires us to open up APIs to fintechs and other startups, but right now we do not know when it will come into force or what the impact will be."

Meanwhile, instant payments will make workload planning more difficult, as Fiducia & GAD will no longer be able to batch payments together. In combination, the two regulatory changes are expected to produce at least 10 percent variance in the total workload.

"We wanted to ensure we could absorb new workload peaks cost-effectively, which would not be possible with the existing economic model for our IBM Z landscape," says Heitlinger.

An additional goal for the organization was to support a more agile software development process on IBM Z. The thousands of Fiducia & GAD software engineers were constrained by capacity limits, and often had to halt development and testing activities to avoid adding to workload peaks at the beginning and end of each month. These constraints ultimately caused delays in software delivery.

Thanks to Tailored Fit Pricing, we have significantly reduced the planning work, eliminated capping, and ensured that our costs are less influenced by peaks, which offers greater value overall.

Thomas Heitlinger, System Planner, Fiducia & GAD IT AG

Transformation story

Flexible workload management

Fiducia & GAD IT AG became one of the first adopters globally of IBM’s new consumption-based pricing model for IBM Z solutions: Tailored Fit Pricing. Under the new model, the organization moved all production workload into a small number of containers, and rather than being based on the rolling four-hour average (R4HA) peak, pricing under the new model is based on total million service units (MSU) consumption by workload containers. The net effect is that monthly workload peaks no longer dominate the entire billing for the month, making it easier for Fiducia & GAD to plan capacity and absorb peaks in a cost-effective way.

Fiducia & GAD IT AG also utilized the DevTest offering, creating a larger, fixed capacity DevTest environment; no constraints at busy or peak times and always fully available for the developers to utilize at a fixed, predictable cost.

"The Tailored Fit Pricing solution was easy to implement, and it is also easy to manage, because we use the same monitoring toolset and metrics for system control and pricing as we used for the usual system control," says Heitlinger.

As part of its adoption of the consumption-based pricing model, Fiducia & GAD is upgrading eight production servers and coupling servers to IBM z14® systems, and will shrink its footprint of servers in the process.

Before adopting the new pricing model, Fiducia & GAD was spending considerable time and resources on planning production activities to optimize its costs while adhering to SLAs. "We provide core banking systems to approximately 30 percent of all banks in Germany, so the primary objective was to avoid any impact on production," says Heitlinger. "On the software development side, all we could do was 'manage by pain', simply imposing restrictions on teams. Thanks to Tailored Fit Pricing, we have significantly reduced the planning work, eliminated capping, and ensured that our costs are less influenced by peaks, which offers greater value overall."

The new pricing model saves time and skilled resources that we can invest in other value-add activities, helping us to improve the service to our customers.

Thomas Heitlinger, System Planner, Fiducia & GAD IT AG

Results story

Effortless speed and transparency

Fiducia & GAD IT AG has achieved a five percent reduction in response times across all production systems, freeing up headroom for additional growth. The organization has also reduced its nightly batch window by 25 percent. Previously, 10 to 15 team members from operations, production and systems administration would meet early each morning where a peak was expected, to decide whether to add capacity in order to ensure that the batch would complete on time. With the new pricing model, only two or three people are involved in capacity planning, freeing up the remaining employees for activities that add greater value.

"Administration is now much faster and easier across the board," says Heitlinger. "It took perhaps four hours before to calculate the four-hour rolling average pricing for production, whereas we can now determine pricing in perhaps four minutes. We also have a direct and transparent relationship between workload pricing and our internal charge-back model."

With the IT architecture set up to support application performance rather than pricing, Fiducia & GAD IT AG has been able to process the peaks over the last nine months without any additional technical staff resources. Developers are far happier with the new arrangements, because they no longer face constraints on their activities, accelerating development cycles by up to 20 percent.

"Thanks to our effort and expertise around the R4HA model, we were always able to meet our SLAs in the past," says Heitlinger. "However, the administrative overhead is significantly lower with Tailored Fit Pricing. The new pricing model saves time and skilled resources that we can invest in other value-add activities, helping us to improve the service to our customers."

About Fiducia & GAD IT AG

Fiducia & GAD IT AG is the information technology service provider within the FinanzGruppe cooperative in Germany. The company's 6,600 employees serve a client base that includes around 900 Volksbanken and Raiffeisenbanken in Germany, cooperative financial companies, and numerous private banks. Ultimately responsible for supporting more than 82 million customer accounts, Fiducia & GAD manages more than 169,000 banking workplaces and 34,000 ATMs nationwide.

Solution components

Take the next step

To learn more about IBM z14, please contact your IBM representative or IBM Business Partner, or visit the following website: ibm.com/marketplace/z14  

To learn more about Tailored Fit Pricing, please contact your IBM representative or IBM Business Partner, or visit the following website: ibm.com/it-infrastructure/z/software/pricing

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