The Australian Stock Exchange recently started getting its hands dirty on a four-year, $50 million project to completely overhaul its trading and post-trade platforms, in what the organisation’s CIO is calling its first officially agile project.
The first part of the project will be the replacement of the ASX’s derivatives and equities trading platforms and risk management and market monitoring systems, an effort expected to take up to two years and cost $35 million.
This ‘phase one’ will be followed by post-trade services, such as cash market clearing and central securities depository services.
Swedish firm Cinnober Financial Technology has been chosen to supply the foundation of the new derivatives and equities platforms, replacing the eight-year old ASX Trade24 proprietary derivatives system and the NASDAQ OMX’s Genium INET-based equities platform.
But it’s not just the underlying technology the ASX is relying on Cinnober for.
The solutions provider has proved to be the driver behind the ASX’s official adoption of the agile method of software development.
The exchange has been dipping its toes in agile waters for a number of years now. The approach to software development and project management was first used in the ASX’s over-the-counter (OTC) client clearing project in late 2013/ early 2014.
But in more recent times - and culminating in the trading platform overhaul - the agile methodology has spread across the wider business. It’s been a targeted push by ASX CIO Tim Thurman, who was keen to see the method leave the confines of the IT department and extend into the organisation.
The approach is now championed by ASX CEO Elmer Funke Kupper, and has its own dedicated function within the office of the deputy CEO Peter Hiom.
“We are now running the agile framework as an organisational change. It’s not an IT thing anymore,” Thurman told iTnews.
“Every piece of an agile project contains a piece of the organisation, be it technical, finance, legal, even media. It’s a component of each. I didn’t want it to be an IT thing. I wanted to have the support of the group executives.”
Now that the ASX’s potential to deliver a successful project through the technique has been proven, Thurman is willing to publicly label projects as “agile”.
“When I arrived here three years ago, we ran our OTC dealer to dealer project with agile governance - which was extremely successful - but we didn’t call it that,” he said.
“With the trading platform now, we’re actually calling it agile. We have coaches, scrum masters and product owners. We’re going to run it very cautiously over the coming months and make sure we don’t have a bad experience. But we are experimenting very aggressively. Moving from waterfall to agile is a big culture change.”
It’s here that Cinnober comes in - the provider’s experience in agile management and software development (the company "wrote the book" on the subject, according to Thurman) was a key factor in its appointment to the project.
“I’ve had an opportunity to use Cinnober in a past life, so I have experience with the way they deliver and the agile framework they have,” Thurman said.
But he’s not planning on running the entire overhaul project under the agile mindset - the 50-60 strong trading platforms team (the project’s largest) will be the strongest adopters, with the CIO taking an ‘as-fits’ approach elsewhere.
“We could potentially do all of [the project] agile, but we’re not quite there yet. We might be in three or four years, but today to keep us all sane, we’ll do things in a way we are comfortable with,” he said.
The organisational shift in mindset will also have a flow-on effect to the exchange’s headcount - the ASX has forecast a one-off restructuring charge of $6.5 million for the second half of the year as it invests in the skills base required to deliver its vision.
Thurman said the platforms transformation would likely result in a headcount reduction to the IT team as efficiencies are created and certain functions are made redundant. He said the drop would be picked up by other areas of the business.
“The reduction in IT would give other areas of the business the opportunity to create new roles, including in product innovation teams and sales,” Thurman said.
The CIO will also be looking to reskill his base of 200-odd IT workers and up to 50 contractors in areas like Java and automated testing.
“We are taking on the journey of agile across the organisation. We’re very keen on upskilling our staff and making sure that’s successful for us,” Thurman said.