The energy and commodities market has only one constant: change. Energy and commodities traders regularly experience everything from small, localized adjustments to regional shifts in consumption to long-term, industry-wide transformations spurred by innovation and new technology. Yet it often takes more dramatic changes, such as the impacts of the COVID-19 pandemic, to underscore the importance of adaptability. Over the last two years, market participants have faced uncertain global economic conditions, aggressive competitive pressures, and even unexpected opportunities arising from the crisis. An effective commodity/energy trading and risk management (C/ETRM) system can help organizations meet these challenges, but nimbleness is the key. Just how adaptable is your C/ETRM system?
Long before the COVID-19 crisis and driven by the digital revolution, forward-looking companies had already begun transforming in order to thrive in a flexible, changing environment. At the same time, energy market participants sought a stable foundation for understanding the market while being able to pivot quickly. To ride the market’s waves, organizations need a C/ETRM system with four crucial characteristics:
As companies try to differentiate themselves in a competitive market, legacy functionality and technology can impede implementation of new customer-specific strategies. Beyond failing to support new customer strategies, outdated systems also increase total cost of ownership (TCO). In contrast, unparalleled configurability enables any size company to use standard or customized models of highly complex business processes optimize operations, and boost user adoption. This capability is particularly critical to accelerate new product offerings. Hitachi Energy’s TRMTracker provides a flexible, hierarchical book structure along with template- and formula-based software to increase user control and reduce vendor reliance. A highly configurable system offers flexibility at a lower cost for smaller companies and minimizes additional cost when ramping up or changing course.
Your C/ETRM system should be flexible enough to be able to extend system functionality. Legacy systems often become out of date due to limitations around key functions such as data modeling, business logic, and importing data. Hitachi Energy's next generation C/ETRM offers a different approach. By providing functionality to customize within the boundaries of the system, we minimize complication from software upgrades. Think of user-defined fields and tables that can be added to extend data models on deals, counterparties and other functions. This allows users to easily add data such as tariffs or taxes, time series data support, data import/export rules, and to develop innovative reporting, including Excel add-ins.
Ease of integration is another area for which legacy C/ETRM systems are ill-equipped. Traders, portfolio managers and their risk management colleagues need to have information about their business – often from multiple sources – at their fingertips. The service-oriented architecture (SOA) of TRMTracker has embedded middleware technology that supports ease-of-integration including market connections. It provides support for a variety of formats for both inbound and outbound interfaces, from user configurable flat-file methods, to XML, SOAP webservices, FIX APIs, and REST-based web services.
For growing businesses, scalability is vital. Unless you can predict exactly how large your business will grow and what functionality you will need in the future, your C/ETRM system must be able to scale with you. Scalability is so important that it is often the sole reason cited for adopting cloud-based C/ETRM applications. An enterprise with a flexible and scalable C/ETRM system can withstand fluctuations in volume without harming its profitability or efficiency levels.
Driven by continuous change, challenges and opportunities, trading companies must constantly look at automation, optimization, control, and analytics, while lowering their cost of trading. Many are held back by underperforming software, disconnected spreadsheets, legacy homegrown systems, or vendor solutions incapable of adapting to new business processes. The best C/ETRM solutions are flexible and adaptable to the changing conditions of both the market and the market participant.
Award-wining C/ETRM for Utilities. Hitachi Energy’s TRMTracker has been recognized as a leading C/ETRM solution by analysts who understand the industry and how a flexible, hierarchical book structure combined with template- and formula-based software provides a high degree of user control and less vendor reliance.
Today’s environment compels organizations to become more agile. Forward-looking companies are leveraging next-generation solutions to accomplish what their competitors are still trying to do with inadequate, ineffectual systems. Hitachi Energy’s C/ETRM software is better, faster, easier, and cheaper for today’s tasks, extends and adapts to tomorrow’s needs, and ultimately delivers a lower total cost of ownership over time.
Learn more about energy trading and risk management (ETRM) from Hitachi Energy.