JSE to rewrite back office programme
The JSE Ltd says it will need to completely rewrite a component of its long-delayed System Replacement Programme (SRP), used for its back office and not trading purposes.
The group says it has completed a technical analysis of SRP which indicates that it is “technically desirable to completely rewrite the Market Services Solution (MSS) component of SRP, which is one of the five components of SRP.
“We are currently considering our options following the technical recommendations, both in relation to MSS and any impact on the other components of SRP,” the JSE said.
Financially speaking, the group notes that the carrying value in respect of SRP as a whole, is approximately R158 million. “As a result of the technical analysis, we anticipate impairment to SRP of at least R60 million, which is the carrying value of the MSS component, to be reflected in the interim financial results for the period ending June 2012,” it said.
The JSE added that the total extent of any impairments will be determined following the group’s decision on the options available.
Last month Humphrey Borkum, chairman of JSE Limited alluded to his scepticism of the ease of implementation of new IT projects. “Somehow I’ve always related these to projects in the construction industry which invariably seem to come in later than scheduled, with unforeseen cost overruns and long snag lists. The Gautrain is a good example,” he said.
“This was certainly the case with our Systems Replacement Project aimed at replacing the JSE’s current back office (BDA) system. After extensive testing our software did not fully meet our requirements – hence the impairment and delay of implementation,” he added.
The chair also highlighted strong 2011 financial results, in which the JSE turned R3.3 trillion in the 249 trading days of 2011 and increases its dividend to 250c per share, from 210 cents, despite taking an impairment of R223 million on software development.
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