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TAURUS Creating a Paperless Stock Trading
Operation
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Introduction

• The London stock exchange is one of the largest
  stock exchange in the world with numerous foreign
  listings as well as British organizations
• Its history traces back as far as 1698 where
  trading were done in the streets and in coffee
  houses
• In 1773 the broker erected their own building
  with dealing rooms on the top floors and a coffee
  house below. This was their first real home
• In 1801 the exchange was officially established
  at that time all transactions were paper base.
  This resulted in movement of large volumes of
  paper around the city which created security risks

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Introduction

• In 1979 the Exchange implemented a computerized
  system for settling share deals Called Talisman
  (Transfer Accounting and Lodgment for Investors
  Stock Management)
• The removal of government policies resulted in an
  increase in volume of trading and Talisman could
  not handle it .
• Taurus was proposed in 1981 and work began in
  1983, the initial goals of the system were 4
  folded.
• Competitive The exchange felt that
  computerization would enable then to be
  competitive in the global market.
• Efficiency They felt computerization would
  reduce the bureaucracy and administrative errors
  associated with paper base transactions.
• Cost The system would remove the need for the
  registrar hence operation cost would decrease.
  Including all cost involved in moving large
  volumes of paper around the city
• Service The system would reduce the lengthy
  process of settling shares to provide the
  exchange the ability to be competitive with
  other major exchanges.

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Why was there a need for TAURUS

• After the removal of government stipulations and
  the increase in the trading a more robust,
  scalable system was need and Taurus1 (Transfer
  and Automated Registration of Uncertified Stock)
  was proposed and implementation began in 1983
• The initial design was a system that would cover
  all share dealings with a single centralized
  database which would be solely maintained by the
  London Stock Exchange.
• This initial design was reject by many of the
  investment companies who wished to maintain the
  inefficient, but highly profitable, status quo.
• They claimed that Taurus1 did not meet the
  demands of their business operations and that
  placed them at a commercial disadvantage

TAURUS Creating a Paperless Stock Trading
Operation
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Why was there a need for TAURUS

• Bank of England stepped in and played an
  influential role in the selection of committee
  members of SISCOT (Securities and Investment
  Steering Committee on Taurus).
• The committee was composed of representatives of
  the banking, stock-broking, and share registrar
  communities their focal task was to design a
  paperless settlement process that was acceptable
  to all parties involved.
• SISCOT team recommended that all parties were
  entitled to have their operations incorporated in
  the Taurus project and the most efficient way to
  accomplish this task was to expand the existing
  settlement system, Talisman

TAURUS Creating a Paperless Stock Trading
Operation
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TAURUS

• In March of 1990, due to increasing pressures
  from both internal and external stakeholders. The
  London Stock Exchange began to work on TAURUS a
  completely different system from TAURUS1 and also
  different from the system proposed by the SISCOT
  committee.
• The new state-of-the-art system would change
  the scheme of trading to paperless trading and
  computerized shareholding
• thereby, drastically reducing the time taken in
  the legal and financial arrangements
• minimizing transfer of monies
• decreasing the overall costs of the process
• and eliminating face-to-face meetings between
  share dealers

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TAURUS

• In 1990 a detailed document entitled Project
  Taurus A Prospectus for Settlement was
  published at the time of the launch of the new
  TAURUS
• This document was a thorough analysis of how the
  proposed system would work for all entities
  involved
• and a projected timetable of completion due
  within eighteen months
• As the system was on the way there were numerous
  modifications to the implementation of the design
  and deadlines were extended and new budgets were
  approved.
• The cumulative impact of these changes was an
  entropy increasing process and the consequence
  were an ever increasing project scope

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TAURUS

• The initial plans for TAURUS was to implemented
  the system using the Structured Systems Analysis
  and Design Methodology (SSADM).

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TAURUS

• This design was completely different from the
  original design which was a centralized database
  stockbrokers and holdings. The new design
• Incorporated a distributed database with LSE as
  the central hub.
• The revamp of TAURUS launch in 1990 and was
  schedule to complete by late 1993
• An additional cost of 45 million added to the
  project budget.
• By September 1990 they realized that they would
  not have enough time to complete the in-house
  database project that have been in
• The works for 2 years. So they abandoned the
  project.

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TAURUS

• Decision Makers in the TAURUS project decided to
  purchase the VSPS back office administration
  package without thorough investigation of the
  package.
• Although Vista was an excellent software database
  for on-line, real-time processing it lack the
  capability for batch processing and coordinate
  distributed databases which were part of the LSE
  regular routine.
• The software required 70 modification to provide
  the services that LSE required.

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What Helps Projects Succeed?

• 1.Executive support
• 2. User involvement
• 3. Experienced project manager
• 4. Clear business objectives
• 5. Minimized scope
• 6. Standard software infrastructure
• 7. Firm basic requirements
• 8. Formal methodology
• 9. Reliable estimates
• 10. Other criteria, such as small milestones,
  proper planning, competent staff, and ownership

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TAURUS

• What TAURUS Team did Wrong

• What TAURUS Team did right

• Lack of executive and stakeholders support
• Based on the problems encountered it seem that
  the project manager was not that experience
• Have a large expanding scope
• Went ahead with the implementation of a system
  with lack of user and stakeholders commitment.
• Lack of skilled resources and a clear complete
  specs.

• High user involvement in the project
• Use the SSADM implementation methodology
• Created and used a steering committee
• Conducted a project kickoff event.

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Reason for TAURUS Collapse

• Poor monitoring and controlling
• Monitoring a project work includes collecting,
  measuring, and disseminating performance
  information. If TAURUS management had good
  monitoring and control practices they would have
  known when they project was not meeting project
  objectives
• Poor management of the nine project management
  knowledge areas

TAURUS Creating a Paperless Stock Trading
Operation
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Knowledge Areas

• TAURUS project managers managed the nine project
  management knowledge areas poorly
• Scope If they had manage the scope of the
  project effective the huge scope creep would not
  have been encountered.
• Cost If this was managed effectively the project
  would not have gone over budget 100
• Time If this area had been manage effective the
  project would not have had a schedule overrun by
  100
• Quality If the quality area of the system was
  manage properly the specification was have been
  clear and complete
• Risk If the risk had been managed effectively
  they might have been able to abundant the project
  earlier.
• Communication If communication was managed all
  changes and delay would be communicated in a
  timely.
• Human resources skilled resources would be
  acquired and utilized.

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Integrated Change Control

• If TAURUS had an integrated change control they
  might have been able to influence the factors
  that create changes to ensure that changes are
  beneficial and control the scope of the project.
• Changes would be communicated to top management
  and steering committee in a timely manner and
  they would be able to manage these changes as
  they occur because change control is a critical
  success factors.

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Three Sphere Model for Systems Management of
TAURUS

• If TAURUS Management had address the three
  spheres of system management, business,
  organization and technology they would have
  tremendously impacted the success of selecting
  and managing the project.
• Sample of some of the business, organizational
  and technological issues that could have been
  factored into TAURUS

1.What will this project cost the
exchange? 2.What will it cost the banks? 3.What
will the cost of support be? 4.What will the
impact be on trading? 5.How to incorporate the
needs of all the stake holders?
1.What technologies should be used to
implement? 2.What will the hardware
specifications be? 3.What would the
requirement be to modify the existing system
to satisfy the needs of the users? 4.What
other over the counter technologies is
required and the necessary modifications
required?
1.Will TAURUS affect all banks in the same
manner? 2.Who will train the banks? 3.Who will
administer support?
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Issues in each Frame of the Organization

• If the Management understood the frames of the
  organization and view the project in the context
  of the larger organization they would have been
  able to eliminate many of the issues associated
  with the project.
• Structural Frames
• Had the managers understand the complex
  relationships involved in the stock exchange they
  would be able to understand the roles and
  responsibilities of each group involved in order
  to meet the goals and policies set.
• Human Resources Frame
• Had they taken into consideration the human
  relationships within the organization they
  understand which roles and their requirements.
  Ensuring that critical roles are not outsourced
  and that there are backups for these roles. So
  when the chief programmer got sick there would be
  someone to replace him.

TAURUS Creating a Paperless Stock Trading
Operation
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Issues in each Frame of the Organization

• Using the four frames of organizations can help
  meet stakeholder needs and expectations
• Political Frame
• Had the managers understand the political frame
  of the organization they would have understand
  the personal politics and competition among the
  various banks and other stakeholders.
• Symbolic Frame
• If they understood the symbolic frame of the
  organization they would have been able to balance
  the triple constraints as they relates to TAURUS.
• Using the four frames of organizations would have
  helped TAURUS meet stakeholder needs and
  expectations

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Project Management
Issues

• Poor Management of triple constraints
• SCOPE
• TAURUS managers failed to
• control and monitor the
• scope of the project
• TIME
• Management failed to
• define maintain and utilize
• clear timetables with small
• milestones
• COST
• Management failed to
• maintain and track changes
• to the project budget

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Conclusion

• Through out the project there were several
  warning signs that were missed.
• The project completion date was delayed 100
• Constantly changing requirements
• Project not being accepted by major stakeholders
• Incomplete specifications
• 100 over cost.
• Fragmentation of the project (components to work
  together)
• Parts of the Vista package modified in USA did
  not work with what was modified in UK.

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Answers to TAURUS Crossword