You need to Digitize before you Robotize: RPA in C/ETRM

Post by admin on October 9, 2017

Digitization is the process of converting information from analog into a digital (i.e. computer-readable) format. It increases the efficiency of business processes. In the field of commodity/energy trading, C/ETRM systems provide a solution to accomplish this. To further improve the efficiency and speed of those work flows, Robotic Process Automation (RPA) is being introduced to reduce or eliminate the repetitive processes through a virtual worker, especially the routine and rules-driven tasks in the back office. However, to enable configuration of the virtual worker or robot, the business process must be digital and automated. Yet, surveys reveal that manual processes with little armies of settlement analyst’s are still very common in the back office. You can’t put the cart before the horse: you need to digitize before you robotize!

While legacy C/ETRM system have significantly automated the end-to-end process from deal entry and risk management to settlement, they were not conceived with the back-office as the starting point. As a result, most C/ETRM systems only provide the ability to settle/invoice STANDARD trades/contracts. Consequently, complex billing of NON-standard contracts is done outside those C/ETRM system through manual processes. This is evidently, a costly, error prone, and inefficient approach. And, not surprising given the market conditions they are facing, this is now getting attention within commodity/energy trading organizations.

With that in mind, looking at the automation of the complex non-standard contract settlement and invoicing, would the first logical step to improve operational performance and optimizing resources.  When a C/ETRM system provides an integrated solution, the back-office will benefit from straight-through-processing and built-in workflow management thereby streamlining the contract-to-bill process. A C/ETRM system that has a notion of Billing Determinants and Charges Types, will be able to automate 95% of all contracts, whether EFET / ISDA master agreement, complex PPA, Intercompany, or Generation and Renewables contracts. This functionality is also required if one wants a complete P&L report, i.e.  in case of incomplete actual data, it accomplishes shadow settlement to calculate estimates. Taken together, the savings and efficiency improvement of this step alone will be substantial (6+ FTEs).

At this point, you have digitized and automated a process that is ready for a next level of optimization for operational accuracy, costs and speed. Here is where Robotic Process Automation (RPA) can play a role. RPA is a software-based approach, where a virtual worker replicates the user actions of a human. Virtual workers can be deployed 24/7 thereby driving higher levels of productivity. Just as industrial robots have been remaking the manufacturing industry by creating higher production rates and improved quality.

Next-generation C/ETRM systems are highly configurable, take advantage of the latest technology and delivery the functionality to do more with less. This is a prerequisite to leverage technologies like presentation-layer automation software – the technology that mimics the steps of a rules-based process without compromising the exiting IT architecture – that can consistently carry out prescribed functions. Separating scalability from human resources allows a company to handle short-term demand without extra recruiting or training.

In today’s business environment, leading enterprises need up-to-date, innovative ways to optimize workflows in the back office. As the Robot will mimic the Human User, the existing system will require changes if the rule-based back office process is not already automated sufficiently to receive the full benefits of RPA. The combination of a highly configurable C/ETRM module, such as Pioneer’s SettlementTracker, with RPA will deliver the flexibility for constant adjustment of robot operation to the C/ETRM system software. It enables you to Digitize and Robotize!

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