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					TAURUS Creating a Paperless
Stock Trading Operation
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
2          TAURUS Creating a Paperless Stock Trading Operation
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
3      exchanges.
            TAURUS Creating a Paperless Stock Trading Operation
    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

4              TAURUS Creating a Paperless Stock Trading Operation
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



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           TAURUS Creating a Paperless Stock Trading Operation
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



6          TAURUS Creating a Paperless Stock Trading Operation
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


7          TAURUS Creating a Paperless Stock Trading Operation
TAURUS
 The initial plans for TAURUS was to implemented the
    system using the Structured Systems Analysis and
    Design Methodology (SSADM).




                       Requirements                   Logical System
                         Analysis                      Specification




                                      Requirements                     Physical
       Feasibility
                                      Specification                    Design




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               TAURUS Creating a Paperless Stock Trading Operation
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 Creating a Paperless Stock Trading Operation
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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        TAURUS Creating a Paperless Stock Trading Operation
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
11       TAURUS Creating a Paperless Stock Trading Operation
      TAURUS
What TAURUS Team did Wrong
  Lack of executive and                       What TAURUS Team did right
      stakeholders support                     High user involvement in the
     Based on the problems                     project
      encountered it seem that the
      project manager was not                  Use the SSADM
      that experience                           implementation methodology
     Have a large expanding
                                               Created and used a steering
      scope                                     committee
     Went ahead with the
      implementation of a system               Conducted a project kickoff
      with lack of user and                     event.
      stakeholders commitment.
     Lack of skilled resources
      and a clear complete specs.
•12      TAURUS Creating a Paperless Stock Trading Operation
 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




13          TAURUS Creating a Paperless Stock Trading Operation
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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              TAURUS Creating a Paperless Stock Trading Operation
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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          TAURUS Creating a Paperless Stock Trading Operation
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
     1.Will TAURUS affect all banks
                                                         of the users?
       in the same manner?
                                                      4.What other over the counter technologies
     2.Who will train the banks?
                                                        is required and the necessary
     3.Who will administer support?
                                                        modifications required?

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                TAURUS Creating a Paperless Stock Trading Operation
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.

17          TAURUS Creating a Paperless Stock Trading Operation
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
18          TAURUS Creating a Paperless Stock Trading Operation
 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


19         TAURUS Creating a Paperless Stock Trading Operation
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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            TAURUS Creating a Paperless Stock Trading Operation
Answers to TAURUS Crossword




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     TAURUS Creating a Paperless Stock Trading Operation

				
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