Blue chip IT

Life in the enterprise fast lane often necessitates the quickest of implementation strategies. ACN reports on how Dubai Mercantile Exchange made its way through an ERP project in record time.

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By  Imthishan Giado Published  April 4, 2009

Life in the enterprise fast lane often necessitates the quickest of implementation strategies. ACN reports on how Dubai Mercantile Exchange made its way through an ERP project in record time.

When one thinks of a stock exchange, it's hard to escape that seminal film of the 1980s, Wall Street. Images instantly come to mind of harried traders shouting out sales and phones constantly ringing, while the true high-rollers sit behind oak-panelled desks planning their next big take-over.

But few people consider the complexity of the IT systems that run silently in the background and are absolutely critical to the operation of the business. Even fewer would expect that these systems would have to be set up within the space of six months. That's precisely what happened in the case of the Dubai Mercantile Exchange (DME), which had just that amount of time to plan and create its IT infrastructure. Gordon Gecko famously claimed in 1987 that "greed is good," but for DME in 2008, there's a different saying that best encapsulates its situation: timing is everything.

One of our key things was to also choose a solution provider and partner that were physically based in Dubai, somebody we could call up and have meetings with.

Paul O'Kirwan was the man tasked with bringing the exchange's ambitious IT plans to fruition. Having joined as IT director in January 2007, the task he was presented was both exceedingly simple and maddeningly complex: get the IT infrastructure ready for launch by June.

"The concept was thought about five or six years ago - having a commodities and futures exchange in the Middle East. Given that a vast majority of carbon and crude products come from this region but they are not traded here - the idea was to form a commodities exchange and set it up so that people could trade futures in contracts and crude," he explains.

With so much to do right off the bat, one might imagine that O'Kirwan would be on the lookout for hardened veterans to form the core of his IT team. But surprisingly - and in a good way for proponents of Emiratisation - he choose to keep his nascent of IT professionals relatively young and relatively local.

"The initial team from an IT perspective is the same size as we have now - we have a total of 11 people. Of those 11, we have four Emiratis, all basically recent graduates. We have quite a young team - all of them are pretty much in their twenties. That was obviously a key initiative as part of the Dubai Government and the Dubai Holdings group - having Emiratis in key roles was important to that part of the job. That's something we strive towards, making sure that they have got the right on-the-job training and support to grow their careers," confirms O'Kirwan.

IT at DME is divided into two key areas. The first is what O'Kirwan describes as his standard line of business applications, based off a standard Windows and Exchange platform. The second - and the key component of this implementation - is an ERP system based on Microsoft Great Plains Dynamics and a CRM system which is also Microsoft-based. These latter platforms are responsible for running DME's core business.

Unusually, DME did not elect to use products from either of the leading vendors in the ERP and CRM spaces, Oracle or SAP. As O'Kirwan explains, this decision was based on the projected size of the company.

"We are never going to be a people-heavy organisation. This is all about technology and electronic trading. We wanted to be able to deploy an ERP solution rapidly and had made a strategic decision to go with Windows and SQL Server in terms of our platform and database. We wanted an ERP solution that we could deploy quickly and grow over time," he states.

But though he clearly stated that time was of the essence in the Request for Proposal (RFP) for the system, many chose to ignore it: "In some of the initial responses to RFPs and stuff, the lead time, development time and installation time were running like nine months to a year. That was clearly unacceptable. We had issued the RFPs in February and we needed to be ready by June, in terms of being able to bill traders."

"Our key thing was to select a partner that we knew we could trust to deploy in the shortest amount of time possible and could deploy a solution that was right for the business in terms of the functionality it gave us, the cost and obviously the hardware required to run it and everything else," he continues.

The time factor becomes very clear when one considers that O'Kirwan joined specifically in late January 2007, issued the RFP for the ERP system in February, and wanted to be enable traders right from June 1 when trading officially began on the platform. Though there were further elements to consider as well.

"That was the initial inception of the platform. We had requirements to deploy core financials in terms of general ledger and all of those core components. But we then needed a partner who could write us a custom component that would take data from the trading engines and generate bills, basically. So it was a billing engine, if you like, that we needed to develop very quickly," he clarifies.

"We issued the RFPs with those functionalities and we shortlisted three. We asked them to come in and present, and then we selected eSolutions as being the company which we felt had the ability to deliver on time which was the key for us, really, in that we had to be ready in time for June 1. We had a fixed deadline and we couldn't afford to let this ERP implementation slip," maintains O'Kirwan.

What have you done for me lately?

Dubai Mercantile Exchange's most recent accomplishment was its move to the Globex trading platform in early February.

As O'Kirwan explains, the move was precipitated by a merger between Chicago Mercantile Exchange (CME) and the New York Mercantile Exchange (NYMEX) in 2008. When DME first set up for business, it's original partnership was with NYME.

"What made sense for them economically was to merge those two trading platforms together. The resulting platform is currently the largest in the world; there's over 100,000 traders using it on any given day. They do about 11 million trades per day in volume. It made sense for us economically and technically to be subsumed and move onto that platform," he says.

Previously, DME operated from a custom-built platform called DME Direct which O'Kirwan describes as being sophisticated, but not in common usage by traders. In September 2008, the decision was taken to move to Globex, one which is not quite as straightforward as it seems.

"There are a lot of moving parts to a trading engine, it's not just the trade. It's all the clearing and the billing and the regulatory and financial stuff that has to go on behind it. We had to make sure all of those moving parts were working," he explains.

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