The following entry is a record in the “Catalogue of Catastrophe” – a list of failed or troubled projects from around the world.
Organization: Australian Stock Exchange (ASX Ltd)
Project type : Stock trading system (using blockchain)
Project name : CHESS Replacement (Clearing House Electronic Subregister System)
Date : Nov 2022
Cost : Aus $250 million (plus a similar amount spent by future users of the system as they worked to integrate their systems with the new product and prepared for rollout)
To make good decisions you need ‘situational awareness’ and events surrounding the failed CHESS replacement (Clearing House Electronic Sub-register System) project at the Australian Stock Exchange suggest a disconnect between senior management and the reality on the ground.
The CHESS Replacement project was to deliver a new exchange trading system based on blockchain technology. Sitting at the heart of the Sydney Stock Exchange (SSX) the system was intended to be a replacement for legacy systems and it was hoped that the system would make the SSX a technology leader among the world’s stock exchanges.
Despite two years of delivery delays, management painted a rosy picture of the project’s status. According to reporting from Reuters in May 2022 ASX management announced at a Stockbrokers and Investment Advisers Association conference that “Ninety-six percent of the software is currently in an operating-and-test environment. That 96% of that software is working”. By Nov 2022 the picture looked very different as an independent review by consulting firm Accenture revealed that only 63% of the software had been delivered and of that 50% needed to be rewritten. Following that review the project was shelved.
As I’ve written about often software can be complex stuff and large scale bespoke software systems development projects have featured in this blog since its inception in 2008. The practices used in software engineering have improved over the years (e.g. through the widespread adoption of agile practices and the use of pattern based designs), but the despite those improvements large IT projects require skilled leadership and effective processes.
A useful color coded chart of practices on the CHESS project (produced by the independent consultants) helps cast lights on the practices being used to manage the project.
Of the 19 areas reviewed: 3 scored green (satisfactory), 8 were orange (developing), 6 were yellow (emerging) and 2 were assessed as red (ad-hoc). One particular disappointment were the scores of quality and test related activities. Modern agile software development practices emphasise the importance of continuous integration and test. Failures at that level can cause a significant build-up of latent defects (a ‘defect deficit’) that was likely part of the disconnect between what management thought they had and the underlying reality.
- London Stock Exchange – TradElect
- London Stock Exchange – Taurus
- The Story Behind the High Failure Rates in the IT Sector (the first article I wrote for this website – first published back in 2009)
Contributing factors as reported in the press:
Dysfunctional management, scope creep, insufficient quality management.