There is one constant in the energy market and that is change, nowadays even more rapid than before. Consequently, energy market participants need to be able to respond to competitive pressures, regulatory requirements and economic conditions. An effective ETRM system will help in meeting these challenges.
Yet to keep the ETRM system effective requires adaptability to dynamic business environments. With budgets under pressure, how do you achieve a predictable Total Cost of Ownership (TCO)? A very flexible system – the secret of lower TCO over time!
Implementing ETRM Software
When an ETRM system is being acquired, companies go through the cost of ETRM application software, recurring maintenance cost, implementation cost and the supporting infrastructure of database and operating system software, hardware and network equipment cost. They may include recurring support and server amortization cost in their future budgets as well.
It provides a predictable cost projection over time – they are the tip of the iceberg. However, in a time of constantly changing marketplace and the effects of economic ups and downs, energy market participants must have the ability to rapidly adapt to the demands of new requirements and the evolving business environment. This introduces an often hidden cost of having to modify and enhance the ETRM system to support new business processes.
Total Cost of Ownership (TCO) is an industry standard method that considers the aforementioned initial cost and the on-going support cost. The more predictable the better.
Therefore, upfront you want your current requirements covered and have the ability to meet future requirements with minimum additional cost. Specific future requirements could stem from your company growth, or product offerings to differentiate with, a new market to compete in, or regulatory demands.
Selecting an ETRM system
This means selecting an ETRM system is a serious undertaking. When the offerings are either simpler/pre-packaged or complex/feature-rich, then you end up with two expensive TCO propositions: the risk of outgrowing your ETRM system with a costly replacement or an ETRM system you cannot afford in the first place.
Of course a search for an ETRM system starts with a good understanding of your own processes and requirements. This is also key in minimizing the risk of a failed implementation and therefore cost. It is typically very hard to find and rely on a pre-packaged system without compromising your unique and evolving business.
While some processes might be universal, a market participant differentiates itself in a particular market and those processes are unique to it. Those must be configurable for optimal use and adoption by your users. This is inherent with a system that provides the functional depth to adapt to future changes.
With a business process that stretches from deal capture to settlement, selecting a solution that offers a full suite of applications that are seamlessly integrated will work cost-effectively down the road. Whether you implement all at once or in a phased approach, a front-to-back offering reduces the risk of outgrowing the system while enabling the functionally within a family of products can be done in less time and with less effort. Regardless of the approach, with a deployable end-to-end solution, you will have the foundation of architecturally-integrated modules and the benefits of straight-through-processing.
A system solution that is scalable and highly configurable offers the flexibility to be lower cost for the smaller company and minimizes additional cost when ramping up or changing course. This can be achieved by using template and formula-based software where no coding expertise is needed to maintain.
With book structures that can be easily modeled, customizable templates, user-defined custom formula entries and ad-hoc report writing, such a solution provides not only a rich user-configurable environment but also superior ability to configure complex business processes. It enables both smaller and larger companies to do configuration themselves with less reliance on the vendor.
Achieving a predictable Total Cost of Ownership of your ETRM system requires a very flexible and highly configurable front-to-back solution. Such solution allows to capture your current and future business requirements while minimizing additional cost.
It offers any size company with the flexibility to use standard or model highly complex business processes thereby configuring the system fit to the business process for optimal use and adoption by the users. Benefiting from this user-configurable software, it allows to adapt and extend for continued usage with minimum vendor reliance and ultimately resulting in a lower total cost of ownership over time.