Project management essentials
S B Patankar, Chief Technology Advisor, BSE is no
stranger to project management. He outlines the steps involved in planning,
executing and managing large, complex projects. Kumar Dawada reports
S B Patankar
Managing the first major IT initiative is usually the most
challenging. For members of the BSE, the online trading system project was nothing
less than a major upheaval.
It challenged the way in which they were doing business for
decades. It replaced the traditional open outcry trading system where negotiation
and trading was a face-to-face affair. People could trade in regional languages
and computer knowledge was not essential. With time, traders realised that they
not only have to be business-savvy but also IT-oriented to survive.
The challenge was not just a fault-tolerant trading system,
BSE members had to be educated and made aware of the functionality of the IT-based
Instead of direct interaction, traders had to sit on computer
terminals and take decisions based on figures displayed on the screen. Making
traders adapt to this system was the major hurdle.
Implementation was slow and in three phases. The first phase
was to display critical information. Previously, if an investor had to buy shares,
he called up a broker, who in turn called the trading ring to get the prices
and conveyed it to the investor. BSE decided to collect the prices directly
from the trading ring and display it on the computers networked to each brokers
office. Now he no longer had to call the trading ring for prices. In phase two,
all trades happening in the trading rings were uploaded by the broker to the
The final phase was implementing online trading. Today, the
trader looks at the prices broadcast to his screen, he takes a decision to buy
or sell and trade happens instantaneously.
Clear Business Objectives
IT initiatives are derived from business objectives. So it
is essential that business objectives are clearly defined. For instance, in
BSEs surveillance system project, the business objective was to have tight
The systems are designed to monitor prices and positions
of shares and companies in the market and to take timely action if any irregularities
are found. Not only should the IT initiative have clear cut business objectives,
it must also ensure that objectives are achieved at the earliest.
A fundamental requirement for project management is classifying
the projects into categories. For BSE, the trading and surveillance systems
are considered mission-critical.
For instance, in the trading system traders would like to
instantaneously execute the trade. If this does not happen, then prices may
fluctuate and traders may lose money. The same is not true for a settlement
report where a delay of few minutes is not critical. The response time and availability
requirements vary depending on whether the application is mission-critical or
Planning is critical to the success of a project. Detailed
project schedules and charts must be made. The project chart gives a clear picture
as to when a particular deployment is required. This helps the organisation
mobilise the required resources and ensure that the project is not delayed.
The requirements for resources vary and can include anything from a capable
business analyst, system designer, vendor to IT infrastructure or application.
A project must be stringently monitored. Organisations can
hold a formal meeting on a weekly basis to analyse project status, identify
delays and chalk out action steps for next week. This helps minimise delays
and make up for lost time.
A multi-vendor approach helps an organisation extract the
best from a vendor. BSEs strategy is to select one vendor to develop software
and use another to provide quality assurance. This ensures quality in the software
developed. The same strategy can be used for software testing and design or
for IT infrastructure or network deployment.
Delays can be reduced substantially by having well-defined
SLAs along with penalty clauses which are activated if conditions are
Delays can be reduced substantially by having well-defined
SLAs along with penalty clauses which are activated if conditions are violated.
Since the conditions are known well in advance, neither the vendor nor the organisation
will want to delay the project and get penalised.
Choosing a Platform
The stock exchange cannot run without IT. The IT initiative
also has to result in infrastructure delivering optimum performance, reliability,
availability and scalability. The right choice of platform is also critical
for the system to grow.
BSE uses Tandem systems, which are fault-tolerant. If one
of the servers goes down when the trading is going on, no transaction is lost.
The processes are automatically switched on to the backup server and the trading
continues. The end user does not even know that there was a failure in the system.
Such systems are deployed to ensure that continuous availability is maintained.
BSE handles 40 lakh orders and 5 lakh trades everyday. Such
a large number of transactions happen simultaneously at 15,000 trader workstations
around 450 Indian cities. A large number of people accessing the system trade
and receive confirmation.
The challenge is to do it safely without compromising security.
This is done by making a secure architecture which is an intrinsic part of the
design. There are different authentications at trader workstation and server
levels. Authentication happens at each step without affecting response times.
This is a complex design based on maintaining a fine balance between performance
The BSE is BS7799-compliant, so it has a systematic security
process in place which defines roles, access and responsibilities of users.
BSEs arrangement is such that security and performance are not compromised.
The stock market system is a high risk one. There are limits
set in the system for the trading members. Every order which comes to the system
is looked for its parameters.
A trader is allowed to buy only up to a certain limit. He
gets warnings when he has reached 70 percent and above. Once he reaches 100
percent, the system deactivates his access.
Limits are defined based on scrip, value or group, and all
these limits are monitored online. By doing this, the BSE has become a safe
place to trade. All this is now done by a custom-made solution built specifically
to meet BSEs requirements. So it covers all aspects of performance, security
and risk management.
Initially, BSE was only a Bombay-based exchange. Now its
reach spans 15,000 trader workstations across 450 cities. This requires network
expansion. BSE has set up its own satellite network. It has a transponder on
INSAT 3B and its own satellite earth station hub at Mumbai. It also has more
than 2,000 VSATs across India.
Earlier, BSE had a T+15 settlement. Today, it works on a
T+2 settlement. This means that if a trade is executed then on the third day
the trader receives money if he has sold shares. This requires seamless integration
between various systems including the trading system, clearing house, depositories,
settlement systems, custodians, and the clearing banks.
It was challenging to get all systems to talk to each other
in a seamless and integrated manner. Along with this were market-related risks
and problems. The BSE surveillance system takes care of that proactively. It
provides online monitoring and tracks manipulation and ensures proper price
movement. The surveillance project requires complex business algorithms to be
visualised including what if scenarios and circular trading.
The next agenda is to achieve a T+1 settlement system. In
addition, as the bank network is integrated, the BSE Internet trading system
will have depository gateways and bank gateways to ensure that flow of funds
occur in a secure and seamless manner.
The next big technology shift will be driven by mobile phone
users. People will be able to trade on the move. They will receive prices and
complete trades through the mobile. As India is emerging as a major global player,
BSE is also gearing up to meet new challenges.