Failed Systems Development - Consideration Analysis

JOURNAL #FOUR [SYD701]

Failed Systems Development - Consideration Analysis

The systems migration failure at TSB bank was a major headline-making event in the UK for two reasons. Firstly, the launch of the core banking platform occurred at such a large financial institution with a significant customer base and high street presence and secondly, the impact of the failure extended to millions of customers who were either locked out of their accounts, experienced their money disappearing or accessed the accounts of other customers. The migration failure also led to the platform being targeted by fraudsters, attacks were estimated at being 70 times greater than normal expected levels during the fallout. As a result of the failure, the bank had to fork out millions of pounds in compensation to customers and additional resources that had to be allocated to advisory services for companies including IBM and Deloitte.

Several elements of the failure stood out, making this an interesting case study:

• The existing banking system was a legacy platform service provided by a now competitor bank as a consequence of the bank being broken up after the 2008 financial crisis
• The system being migrated to was designed to conform with smaller Spanish banks after asset acquisition, not an organisation as large and complex as TSB
• The new system was developed by an IT supplier owned by TSB parent Sabadell, which impacted communication and decision-making authority
• Technical deadlines failed to be met time and time again, lessons were not learned and opportunities for correction were missed
• The fundamental implementation methodology was flawed, choosing a ‘big bang’ migration and waterfall approach with little attempt to fully understand or mitigate the risks or consult expert external advisors for the project
• The scale of the failure resulted in a Parliamentary Enquiry, an investigation by the Financial Conduct Authority and a 262-page report by law firm Slaughter and May estimated to have cost £25m

Multiple problems made the migration failure an interesting examination:

• The migration programme was unique, being described as unprecedented in its level of complexity and conformity
• A lack of understanding by TSB of the complexity of system migration, compounded by a lack of understanding of the TSB system by the IT supplier
• The assessment of the IT supplier’s capability to deliver the migrations was insufficient
• Failed deadlines led to testing to be scoped out or the scale reduced to meet unreasonable deadlines
• Opportunities to make changes and reconsider the plan or Go Live date were not identified or were missed
• The procedures designed to mitigate risk and prevent failure proved ineffective on multiple occasions
• The new system required a greater level of extensive changes to enable it to conform to the existing infrastructure

Despite this being a commercial project, regulatory authorities provided oversight of the project from the beginning. The scale of the programme resulted in significant media reporting, independent audits and regulatory investigations, which act as excellent resources.

TSB programme pulled apart in report on IT meltdown. (n.d.). ComputerWeekly.Com. Retrieved April 10, 2022, from https://www.computerweekly.com/news/252474170/TSB-programme-pulled-apart-in-report-on-IT-meltdown