Kmart plans multi-year app transformation

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Kmart plans multi-year app transformation

After virtualising its mainframe using a fully remote team.

Kmart Australia is anticipating a multi-year effort to “slice off” and either rebuild or replace the applications - and 6 million lines of code - hosted in its recently virtualised mainframe environment.

Chief technology officer Michael Fagan told Micro Focus’ Realize 2020 A/NZ summit that with the virtualisation of the mainframe now completed, it is time “to look to slice out the applications that we are hosting in the mainframe.” 

“We have 6 million lines of code that we are looking to rebuild and refactor into a set of modern architecture and services using contemporary ways of working which we could do now that we weren't able to do before we migrated our mainframe,” Fagan said.

iTnews first reported at the end of last year Kmart’s plan to "strangle" its mainframe "out of existence" and to use the money it saved to modernise its core merchandise system.

It has virtualised the mainframe to run on AWS, a migration that occurred over a weekend in May this year with help from Infosys, AWS and software from Micro Focus.

“We had a crack team then supporting us to do this in record time and control our costs,” Fagan said.

Fagan added that Kmart is “almost definitely the first company ever to have done this entirely remotely”, with all staff working on the cutover based remotely due to COVID-19.

He said the cutover date could not be moved due to the end of an existing contract associated with the mainframe.

“We had a real deadline, a real drop-dead date, so we couldn't miss the deadline that we had, which was smack bang in the middle of COVID-19,” Fagan said.

“As a CTO, when you come to a go-live situation, there's not much you can do on those weekends except maybe turn up to the office, show a bit of morale and support, and buy pizza and beer for the team, but we couldn't even do that, because we had everyone working remotely. 

“We believe it's the first mainframe migration globally that has ever been completed 100 percent remotely. That includes all the dress rehearsals that we did beforehand, so our final stages of build and test were all conducted remotely,” said Fagan, though he hastens to add that “you wouldn't choose to do this if you had an alternative option.”

Still, the move - despite its drawbacks - will result in tidy savings for Kmart, and those savings in particular will add up over time.

“We save millions of dollars annually by doing this,” Fagan said.

“I think the key part of that is not just the millions, but it's actually the ‘annual’ part of that. It's an annuity so it pays back every year.

“In the next five years it will save more than $30-$40 million for the company as well as unlocking huge amounts of value for our teams or for our business partners, and ultimately for our customers.”

For that reason, Fagan saw the project as “not just a cost play [but also as] a capability play.”

“It's really about unlocking the future for us at the Kmart Group so we can deliver better outcomes to our customers,” he said.

Fagan said the retailer would no longer be “hamstrung by our past systems, structure, success and history”.

“Combined together, this [held] us back in several ways,” he said.

“Our legacy systems contain trapped value, trapped data and/or capabilities that can be used for innovative new products, services and business models, but we cannot leverage them. 

“Technology hasn't been seen as a priority so we've had a history of underinvestments … and we have technical debt in our existing systems which is increasing costs and holding us back … from being innovative and delivering what our customers want.”

Fagan said Kmart’s technology team wanted to be “valued partners with the rest of the organisation”.

“We have two key aims that we try to live by,” he said.

“The first is to deliver more innovation and better experiences to our customers more quickly. We improve our speed of delivery in order to stimulate customer demand and drive greater total benefits for the group. 

“The second aim is to implement technology to be efficient and improve productivity, which in turn will reduce total group costs, which allows us to lower our prices, which makes life better for our customers.”

Ultimately, he said, Kmart wanted to provide customers with even better products at lower prices - and a better IT environment would help the group achieve that.

“It's easy to do better products at higher prices, or to have lower prices and worse products, but it's actually quite hard to have better products at a lower price,” Fagan said.

“We’ve set ourselves some tough goals or some tough challenges over the [coming] years.”

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