The ROI of AS400 Services: A High-Return Legacy Solution

Many companies still rely on IBM AS400 for critical functions—and for good reason. The AS400 offers substantial ROI by enhancing operational efficiency, minimizing costs, and enabling strategic modernizations. Here’s a closer look at how AS400 provides measurable returns and a specific example of modernization at work.

1. Cost Savings Through Automation

Automation with AS400 can reduce manual processing costs by as much as 50%, streamlining repetitive tasks such as payroll, inventory management, and order processing. For example, AS400’s built-in tools automate data entry and verification, which Gartner estimates can save companies $10,000 annually per automated task by eliminating errors and reducing processing time.

2. Improved System Uptime

Reliability is a core strength of the AS400, offering uptime rates over 99.9%. This level of reliability is invaluable: IBM estimates that unplanned downtime costs companies an average of $300,000 per hour. For industries where every second of downtime costs money - like finance or manufacturing—this level of stability is invaluable. Unlike newer systems that might require frequent patches or troubleshooting, AS400’s robust architecture minimizes disruptions. This reliability ensures consistent service delivery, reducing the high costs associated with emergency repairs and system downtime, making it an investment with continuous returns.

3. Reduced Hardware Replacement Costs

A study by IBM found that AS400 hardware has an average lifespan of over 15 years, compared to 3–5 years for many other server - AS400 systems are built to last. While other systems might require expensive upgrades every few years, AS400 hardware often remains functional for decades. This longevity enables companies to maximize the life span of their hardware, extending the value of their initial investment without incurring constant replacement costs. For companies that don’t want to overhaul their infrastructure frequently, AS400 represents an excellent return on capital.

4. Strong Security and Compliance Features

In highly regulated sectors such as finance and healthcare, AS400’s strong security protocols add significant ROI by preventing costly breaches and regulatory fines. Data breaches cost U.S. businesses an average of $4.88 million per incident, according to IBM’s 2024 Cost of a Data Breach report. AS400’s built-in encryption and access controls help prevent costly breaches, adding measurable value by protecting company assets and reputation. AS400 supports critical compliance measures, including encryption and access control. With built-in security features, organizations can reduce the risk of data breaches, which are not only costly but also damaging to a company’s reputation. For industries where compliance is essential, AS400’s secure architecture provides protection and peace of mind.

5. Modernization for Future-Proof ROI

AS400 is highly compatible with modern technology stacks, enabling seamless integration with APIs, web-based GUIs, and even cloud solutions. This capability ensures organizations can benefit from AS400’s robust backend while providing a modern user experience for employees and customers. Studies show that companies investing in AS400 modernization can see a 40–60% improvement in productivity by enabling employees to work more efficiently within a familiar, yet modernized, interface.

Modernization often involves phased migration to web interfaces, data visualization tools, and integration with partner solutions, all of which drive competitive advantage.

Case Study: AS400 Modernization for Enhanced ROI

An Arkansas-based fitness management solution provider faced challenges with their legacy AS400 system. The client needed a more user-friendly web-based interface, but the lack of documentation and patchy legacy code complicated modernization efforts. With successful implementation of a phased migration to a modern GUI, enhanced customer experience, and added business intelligence tools for insights. The outcome was an attractive, efficient user interface that improved decision-making, ultimately driving higher ROI through better customer engagement and streamlined workflows.

Source: Nalashaa's AS400 Modernization Case Study

Conclusion

The ROI of AS400 is substantial, with benefits extending from operational efficiencies and lower maintenance costs to enhanced security and modernization flexibility. For businesses leveraging AS400, the platform delivers high returns and long-term value, proving that strategic investments in AS400 can still drive profitability and growth as long as you partner with the right service providers.