As befits an institution whose roots go back more than 200 years, the headquarters of the Irish Stock Exchange in the heart of Dublin oozes history and old-world charm.
First opened in 1793 as the Dublin Stock Exchange, the listed building’s beautiful interior is rich in mementoes of the past. Names of previous chairmen are recorded on ornate carved panels, and in the elegant boardroom the walls are adorned with portraits of past luminaries and a replica of a chalkboard displaying information that would have been typical during a busy day’s trading in the middle of the 19th Century.
It’s in the boardroom that I meet Alan Finan, IT manager of the Irish Stock Exchange and before I get a chance to ask to see the trading floor, he points out that we are in fact sitting in it.
Compared with the frenzy of stock exchanges in say London or New York, the relatively small Irish Stock Exchange was always a more sedate environment, but since 2000, it has become a virtual operation, with all trading now taking place online via the ISE/Xetra electronic trading platform by means of a technology alliance with the Deutsche Börse in Frankfurt.
‘We implemented our electronic trading system in June 2000,’ said Finan. ‘It resides on a mainframe with the Deutsche Börse in Frankfurt. All of our member firms, stockbrokers and investment banks, now have access to that trading platform from their own offices. So all of our trading is now done in a virtual environment with communications being a key facet.’
Old days
Prior to 2000, stockbrokers traded in Irish shares by telephone or directly between dealers on the floor of the Exchange in what is now the board room. Factors driving the move might have included the ability to provide a leading edge, cost effective trading platform to members of the Exchange, the imminent adoption of the euro and the increasingly global nature of international business, but whatever the motivation, it is quite clear that information and communications technology was the enabler.
Finan says that the Exchange has invested heavily in IT over the past five years with the primary aim of developing and improving its business processes. IT has therefore to be aligned very closely to the business of the company and in this, Finan says, the senior management has been extremely supportive. ‘They are very much aware of the advantages of IT,’ he said, ‘particularly in the area of communications and the speed of communications that a good IT infrastructure can provide.’
The Irish Stock Exchange has a number of different businesses. Its primary role is to provide efficient markets for the securities that it admits to trading. It offers investors the opportunity to invest in a variety of investment products, including equities, listed investment funds and specialist debt securities. It also has regulatory responsibilities for the Irish stockbroking sector.Because of that it needs to have historical information. ‘Since 2000, we have had the facilities to publish extensive trading and stock information ourselves,’ said Finan.
Prior to 2000 the Exchange’s own technology offering was limited. It had a link into a settlement system called Crestco which ran on a mainframe in the UK, and also had a number of small systems in Dublin for e-mail and file-sharing purposes. It also had terminals to receive financial information from news agencies such as Reuters and Bloomberg. The year 2000 was a major milestone for the Exchange in terms of IT, according to Finan, since then it has followed a policy of aligning IT closely to its internal operations and using it to enhance its business. Senior management has instigated a policy of continuous improvement in the development of the Exchanges business units, he says.
Remote sites
Because of the protected nature of the headquarters building, most of the Exchange’s IT infrastructure has to be located in a remote data centre. It has three HP-UX servers and about eight Intel systems running Windows 2000 located at InterXion’s hosting centre in Park West. However, all of these are managed remotely from the headquarters building by Finan and his team. ‘InterXion just provides us real estate,’ he said. A few small servers remain at headquarters for domain control and file serving. Out in Park West, the main applications are customised software running on Oracle databases. The back-office systems are all custom applications written in C++. They extract information from the Germany Börse, correlate that data, load it into an Oracle database and subsequently pump that live information out to the commercial data or news suppliers like Reuters and Bloomberg via the Consolidated Vendor Feed (CEF) provided for the Exchange via Germany. Other customised applications provide workflow and Web-content delivery mechanisms (see panel).
Strong position
Finan believes that IT is helping put the Irish Stock Exchange in a strong position to provide a range of new information services directly to clients. ‘Financial Institutions are always looking for new ways to package or enhance old products,’ he said. ‘We understand our business. Not only are our people technically proficient, they also know how the business works. That gives us an insight into that business and what people want.’ ‘I’ve heard a lot about aligning IT to business goals,’ he continued. ‘Here, that’s always been the way. IT enhances the business because we understand the business. In other companies I’ve worked for, IT’s job was to mind that data without having any for its quality. Here we understand the information that’s gathered we can interpret it, vet it and enhance the business as a result. We work hand in hand with the business in all aspects.’ This is particularly relevant because the nature of the Exchange’s business is highly specialised. ‘All our applications are customised to some degree,’ said Finan. ‘Our business is unique in this country. Nobody else does it. It doesn’t allow for generic products.’
Size of team.
Finan’s current IT team comprises himself and five others. ‘We do everything,’ he says. ‘We develop, maintain, support and administer IT for the organisation. All our systems are remotely managed from headquarters.’ ‘I’m very proud of this,’ he continued, ‘because we hadn’t done offsite remote management before. Some of our staff were reluctant, because they no longer had the comfort of being able to walk into the computer room any more. But it’s been very successful.’
To facilitate the remote management, the Exchange has a high-speed 100Mbit/s leased line connecting headquarters to the Park West data centre. ‘We also have a 2Mbit/s line linking this building and Park West to our disaster recovery site run by a third party provider,’ said Finan.
Disaster recovery is a key part of the Exchange’s business, and Finan has split the infrastructure between three sites.
‘Our strategy is to have a small IT team with large infrastructure so it’s very important for us to be able to keep things up and running, but more importantly to keep the information flowing,’ said Finan. ‘In the event of a major catastrophe, I have halved our workloads because if the main office goes, we only have to replace people and desktops. If the computer facility goes down, I have only to recover data on the servers.’
Outsourcing
Finan’s total ongoing IT budget is significant, and individual projects can increase it further in any given year. ‘There are only a certain amount of things we can do in-house. If we need a major system written, we have to go outside,’ he said. For example, central securities and trading database and main element of the MIS, the DSS was initially developed by Cambridge Technology Partners in 1999/2000. ‘They worked closely with us in developing the source code but we are fully responsible for the ongoing maintenance and development of that system,’ said Finan.
Having invested so heavily in new IT systems over the past five years, Finan is now looking forward to a period of consolidation. ‘Having four years with the Exchange I have seen a lot of dramatic changes involving refurbishing the building, developing new applications and introducing new processes,’ he said. ‘We’re at a stage where we’re relatively happy with the current infrastructure, we’ve been successful and now we have to consolidate what we have and prepare for the next stage whatever that may be.’
Although no definite decisions have been made, Finan is clearly being drawn towards Microsoft technology for the future. ‘The .NET architecture is definitely something we will consider,’ he said. ‘All our new applications reside on Intel and Windows. and are predominantly XML compliant. We are looking at technologies such as Asp.net, but I think XML when it becomes standardised, will play a leading part. The .NET technology is a good fit in terms of the business we are in, the capabilities of the technology and the skill set I have available here.’
CIO FORUM PANEL
Critical Exchange systems
The Irish Stock Exchange has implemented some specialist IT systems since 2000, when trading was moved over to the ISE/Xetra Platform in Frankfurt. Among these systems were a document management and workflow project called FAST and an enhanced content-management system for its Website, which allowed non-IT specialists to post content to the corporate
The FAST way to get a listing
Those wanting to secure a listing for their investment fund or specialist debt security on the Irish Stock Exchange must go through a rigorous set or processes to meet all the necessary regulatory requirements.
Prior to 2002, any application for a listing was accompanied by reams of hard-copy documentation. ‘Applicants would have to submit a document which could be anything from 25 to 500 pages in size,’ said Finan. ‘Several copies of these documents would come in by courier and would be logged, checked and delivered to people here who would read them to ensure that they adhered to Stock Exchange rules.’
The laborious process tightly run, but paper volumes were huge and the Exchange had to keep all the documentation as an archive. At the end of 2002, the Exchange introduced the FAST system, which is a loose anagram for Fund Administration of Specialist Debt Securities.
This is a customised SoftCo document management and workflow system which allows the Exchange to receive the applications electronically. The content is now read on screen and the approvals process takes place on digital documents, not hard copy.
Even though the turnaround period is typically five days because of the time-consuming process of reading and proofing the material, Finan maintains that the electronic workflow has enhanced the business process. ‘We are required by law to hold records of all listings,’ he said, ‘so if you have paper records, they build up. We have over 5000 listed securities in the funds area, all of which must meet the same criteria. That’s a lot of documents.’
Storing such vast quantities of paper was a challenge, and because the Exchange inevitably had to start moving archives off site, the retrieval of documents became a slow process. Now that all documents are stored electronically, the physical storage space is less and the retrieval time is much quicker. Similar communications with each of the players in the value chain is speeded up and is more transparent.
The FAST system comprises three components. The core document-management system is based on SoftCo Enterprise. The other two components are a workflow server based on Microsoft’s SQL Server database and an application server called Softco Webserver.
Parallel processing
Information is key to the business of the Irish Stock Exchange and one of the major enhancements made recently has been the provision of a content management system (CMS), which allows non-technical users to post information to the Website, subject to an approvals procedure.
‘One of the key areas of our strategy in 2003 was to revisit our Website,’ said Finan. ‘It would gather information from the back office systems for publication, but we wanted to publish a lot more information directly to the Website.’
Some information, such as the equity prices, was already being published automatically at regular intervals, but the Exchange wanted to widen the scope of information being made available.
‘We did a very detailed research and scoping of the sort of system we wanted and then went out to the market with request for tender process,’ he said. ‘I come from a military background, having served in the Irish Navy, and I have used that type of approach for procurement.’
Parallel Internet won that tender and will continue to provide the development effort on the content management system, which is based on its own technology. However, the database design for the back end of that system was developed by the Exchange’s own staff, although Parallel provided the front end to display the material on the Website. This Website went live on January 13th this year. ‘Equity prices are now posted on an hourly basis,’ said Finan.
‘Before implementing the new system we couldn’t post them as regularly as that and we didn’t publish as much information either. We have added enhancements that allow people to export this data to other applications like Word or Excel.’
‘We also have published information pertinent to our investment funds business information about our asset-backed securities and specialist debt securities that we didn’t publish previously because we didn’t have the back-end systems to fully utilise that information,’ he continued.
The CMS allows non-IT people to have control over what they publish. The trouble with the Web when it first came out, according to Finan was that people thought: ‘Great. I can publish things online whenever I want now’. However the process was still seen as being part of the IT department’s responsibility. ‘We were expected to drop everything to post material on the Web and it was taking a lot of our time,’ he said. ‘This CMS gives business users the ability to do that themselves. There is a workflow engine that forces people to go through an approvals process before anything gets published.’
The CMS has freed up the IT department to concentrate on more important areas. ‘We have more scope now to grow our business by exploiting Website technologies,’ said Finan.
15/03/04
Subscribers 0
Fans 0
Followers 0
Followers