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Case Study - Taurus. Brian Varela 4/20/2010 Management Information Systems. What was Taurus?. Taurus was a project with the goal of: Developing an automated transaction settlement system for the London Stock exchange Successfully accomplish de-materialization of all transactions.

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case study taurus

Case Study - Taurus

Brian Varela

4/20/2010

Management Information Systems

what was taurus
What was Taurus?
  • Taurus was a project with the goal of:
    • Developing an automated transaction settlement system for the London Stock exchange
    • Successfully accomplish de-materialization of all transactions
background of securities business
Background of Securities Business
  • Securities involves 2 processes:
    • Dealing
      • A trade is dealt when a broker is to buy or sell shares for a client at a specific price
    • Settlement
      • Settlement involves the transfer of money and shares, amending the company’s register of shareholders and either issuing and/or cancelling a share certificate
inefficiencies of securities business at the time
Inefficiencies of Securities Business (at the time)
  • It is no surprise that a system that can be traced back to the 18th century could be inefficient
    • due to the large number of transactions occurring within a day, the paper trail was becoming unmanageable
    • In 1987 the antiquated paper driven system almost collapsed under the sheer volume of trades resulting from a rising market
project taurus
Project: Taurus
  • The Taurus project began in 1998.
  • The aim was to create a simple system for the large investment houses, which account for over 70% of the value of transactions on the London Stock Exchange.
collapse of taurus
Collapse of Taurus
  • From the beginning there were signs of failure which included:
    • An ambitious 18 month time frame
    • It used new and untested technology (untested due to the time frame)
    • Too many different interests from organizations which would later cause complexity in the project
collapse of taurus1
Collapse of Taurus
  • 1st Warning:
    • the original project design called ‘Taurus 1’ was abandoned due to the broker constituency, who believed that it placed them at a commercial disadvantage.
    • This was a project that could have been completed in 6 months with tested technology
  • Conflicts of interest:
    • There were over 30 committees linked to the Taurus project, each with its own special interest
  • Not on schedule:
    • The design stage, which was scheduled for 2 months, lasted 2 years
final design
Final Design
  • Finalized by John Watson, hired by a consultancy firm to direct the project.
  • The final design was a hybrid structure comprising of over 17 alternative versions of Taurus welded together to reflect existing business practice.
  • The CEO at the time was opposed to this solution but he was not in a position to stop it
faults in the final design
Faults in the Final Design
  • The design phase was constantly being changed by securities
    • It made everything more complex
    • Too much control was given to too many bodies and this lead to constant changes in the software design
  • There was a lack of leadership and ownership was too spread out
    • The best firms/people in the industry headed the Taurus project
    • Power and control were the variables that steered the Taurus project into failure
faults in the final design1
Faults in the Final Design
  • Use of “off the shelf” software
    • Their intention was to speed up development
    • They used this state of the art technology and software on 20 year old hardware – which made no sense
    • The different builds were constantly not matching
    • It was noted that the re-engineering of the software package at the time of the failure of Taurus cost £14 million
faults in the final design2
Faults in the Final Design
  • The system design
    • There was no logic behind it
    • Its goal was to speed up project implementation
    • It was believed that by building the outward part of the system first, and then the central architecture would speed things up and make the interested parties happy.
conclusion
Conclusion
  • In mid-1991 the board granted a time extension and extended budget, but by 1993, with no visible sight of the finished Taurus project, it was cancelled.
  • The original budget of £6 million and with estimate cost at time of abandonment was £800 million; this was 13,200 % over budget, five years over time and without a viable solution in sight