Clearing house LCH.Clearnet has abandoned its Generic Clearing Systems project to build a single integrated IT platform, after the firm’s latest internal review of the programme concluded that it was not technologically or economically viable to continue.
The decision means it will write off £32m of development costs, on top of the £13.9m it wrote off last year when the project first ran into trouble.
Chris Tupker, the clearing firm’s recently appointed chairman, said the failure of the project primarily reflected its excessive complexity.
“The nature of the GCS design resulted in a over-complex solution both in terms of ongoing production support, operability and development.”
Tupker said LCH.Clearnet would now focus on developing its existing systems for clearing trades to ensure their reliability and performance for customers including the London Stock Exchange, Euronext.Liffe and the London Metal Exchange.
LCH.Clearnet first began working on GCS when the company was formed by the merger of London Clearing House and Paris-based Clearnet in late 2003.
At the time, the plan was for the newly formed clearing house to replace the 30 or so legacy systems it inherited with a single platform for clearing trades based on Java and Oracle technologies.
But the project, which was origially expected to take three years to achieve this aim, has delivered very little since, and never come close to achieving the two boards’ vision of streamlined processes on a single platform bringing about dramatic cost savings.
With the abandonment of the GCS project, one of the first tasks of the group’s newly appointed CEO Roger Liddell is to develop a long-term IT strategy for the company.
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