Imagine your company’s core banking system, processing millions of transactions daily, is like a complex, decades-old factory. It’s still producing, but you don’t have the original blueprints, and the engineers who built it are retiring. This factory, often built on COBOL, powers critical business functions. Ignoring it puts your business at risk. This chapter provides a business leader’s guide to understanding your COBOL ‘factory’ – its strengths, weaknesses, and how to assess its impact on your organization.
We’ll explore three essential areas: First, we’ll demystify COBOL concepts in business-friendly terms, helping you understand what these systems actually do for your organization. Next, we’ll guide you through assessing your legacy landscape to identify modernization opportunities and challenges, including how to prioritize applications based on business value and risk. Finally, we’ll provide strategies for effective communication with your COBOL experts, enabling you to leverage their knowledge and ensure successful modernization initiatives.
By the end of this chapter, you’ll have the foundational knowledge needed to make informed decisions about your COBOL systems’ future and be prepared to engage effectively with technical teams about modernization options, including AI-powered approaches.
COBOL powers core business functions in finance, insurance, government, supply chain, logistics, and healthcare. Understanding COBOL is crucial for making informed decisions about these legacy systems and preparing for AI-powered modernization. This section provides a business-focused overview of COBOL’s role and function.
Think of COBOL as a foundational technology driving critical systems, such as core banking platforms, insurance claims processing, and government benefit distribution. Developed in the late 1950s, COBOL excels at processing large data volumes with precision and remains a robust and secure platform for high-volume transaction processing. For example, it handles millions of daily financial transactions, calculates insurance premiums, and manages government benefits. COBOL supports trillions of dollars in daily transactions globally.
COBOL emerged when mainframes dominated computing, and the mainframe remains a critical component of many hybrid cloud environments. The business logic embedded in these COBOL systems represents decades of invaluable institutional knowledge. Rewriting these systems is often prohibitively expensive and risky. A global financial institution found that integrating their COBOL-based customer data system with a new AI-powered fraud detection platform required a dedicated team for several months due to complex data structures and business rules, impacting their project timeline.
What This Means for Your Business: COBOL isn’t just old code; it’s decades of business knowledge and continues to be a vital component of your IT ecosystem. Recognizing this value is the first step in modernization. Ask your IT team: What is our current technical debt associated with our core COBOL applications, and what are the potential risks of inaction?
Technical jargon can hinder communication. These business-friendly translations bridge the gap between business and IT teams.
Understanding these equivalents enables effective participation in discussions about COBOL systems. You can ask informed questions and understand the implications of technical decisions.
What This Means for Your Business: Common language fosters better collaboration. This leads to more effective modernization and reduces miscommunication. Ask your team: How well-documented are the business rules within our core COBOL applications’ Procedure Divisions? What is the estimated effort to change a critical rule and deploy it through our CI/CD pipeline?
COBOL is renowned for its reliability and efficiency in processing large data volumes, making it ideal for financial transactions, insurance claims, and high-volume government services. However, it lacks modern features, and the pool of experienced programmers is shrinking. AI-powered solutions are emerging to bridge this skills gap and accelerate modernization.