In-Depth

XML spurs Liquidnet link to Europe

• By Rich Seeley
• March 27, 2003

ADT's 2003 Innovator Awards

Middleware/Application Integration Finalist

Extending an American electronic brokerage for institutional trading to serve financial markets in the United Kingdom, Germany, France, the Netherlands and Switzerland is a major undertaking. This was the task of Liquidnet Holdings Inc., a New York-based electronic brokerage that had built a successful U.S. operation in little more than a year and was ready to expand to the European market.

The task of integrating back-office systems with European vendors and developing new features to support the expansion fell to Nick Codignotto, director of development, and a staff of three programmers. And it all needed to be done in six months or less.

Codignotto did not hesitate when asked what his biggest challenge was in developing the project that Liquidnet had dubbed Rio.

''The biggest challenge was the huge scope of the functionality we had to implement,'' he said. ''To implement the functionality would take a year and a half with [large teams of] developers working on different sections. But we really only had four people working on this project.''

The key elements of the project included implementing interfaces to third-party vendors in Europe, enhancing the security, and making it scalable to handle the higher volume of trades.

Perhaps the biggest surprise was that the team was able to complete the project in six months. And they did it without working grueling hours. Codignotto, who, despite his director title, worked in the trenches doing coding with his team, wanted to avoid burnout. So while they worked intensely from 9 a.m. to 7 p.m. five days a week, he made sure his team had weekends to recover. While they did not exactly keep bankers' hours, they worked very few Saturdays and only a few weeknights, never later than 10 p.m., he added.

Codignotto said that along with his team's hard work, there were two keys to their success. One was using XML technology to unify and standardize the data streams from the U.S. and Europe.

''XML was a huge boon for us because it allowed different components to talk to one another,'' he said. ''We didn't have to develop a custom messaging interface.''

The other key was following the Extreme Programming (XP) methodology authored by Kent Beck. To keep from becoming overwhelmed, Codignotto and his team would take requests from Liquidnet's Member Services Representatives (MSRs), the system's primary users, and break them down into doable chunks.

''They gave us a list of 100 features,'' he recalled. ''We gave them 10 and let them beat it up. And then they figured out, 'These six features, we don't need them anymore.' If we'd given them everything at once, we would have ended up implementing features they didn't even need.''

When the project began to run over schedule, Codignotto said his team would do triage to drop features that were bogging the programmers down. Features that would eventually be needed but were not essential to initial implementation were added after rollout.

''You've really got to do that,'' he said. ''If you don't do that, a six-month project could go to 18 months.''

Application profile

Project: Rio 2.0I

Purpose: The new system supports the firm's international clearing initiative. It also allows seamless communication between Liquidnet's domestic operations based in New York City and its international operations, which are based in London.

Benefits: Extensibility to support trading in five new foreign markets on a single, integrated back-end system vs. six disparate systems. Scalability to support a rapidly increasing client base without increasing staff, and adaptability to support sharp spikes in client growth and/or usage.

Tools: Microsoft Project, Visual C++ 6.0, Sun Solaris compiler, Apache Xerces/Xalan XML tools, SmartSockets from Talarian/Tibco, Oracle 8i, Omgeo OASYS Global (formerly Thompson Financial) interface, Xpedite fax and e-mail service, UltraGrid from Infragistics Inc.

Development team: Nick Codignotto, director of development; Sydney Gomez, software engineer; Harry Chan, software engineer; Matthew Moss, software engineer

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Click here to read about the winner in this category, ''Aviall IT investment boosts bottom line in hard times,'' or click here to go to the Innovator Awards home page.