ACHIEVING A FASTER, MORE COST EFFECTIVE ETRM

IMPLEMENTATION

- WHAT BUSINESSES NEED TO DO AND ASK

A TRAYPORT BUSINESS

WHITE PAPER

In a challenging and fast-changing energy market, it is more important than ever for businesses to

be using systems and processes that provide efficiencies and help maintain competitive advantage. With Contigo research* finding that 69% believe spread sheets are not sufficient to manage the demands of the energy sector, a modern energy trading and

risk management system (ETRM) is now seen by many as essential. However, according to

the same research, many businesses are still operating without the systems in place to meet the demands of the changing energy market place.

The reasons for the failure to upgrade may be varied, but lack of internal resource and fears of extended

implementation timescales and costs are likely to be having an impact. This paper features expert guidance

from Contigo’s ETRM implementation specialists, together with that of energy businesses who have carried

out successful ETRM implementations. It outlines the six key factors that influence the implementation

process, and is designed to support businesses in understanding how to achieve successful implementations

of ETRM solutions, faster and cost effectively.

How can you gain value from your new ETRM system faster and how long should the implementation take?

While every implementation and timescale will be different, there are key factors that will influence how long the implementation takes and also how successful the resulting system will be.

complexity for hardware requirements. These newer

technical features result in many more businesses

being able to move to a robust and modern ETRM

system, that meets the demands of a fast paced and

volatile modern energy trading market place.

Here are the six key factors that influence the time

an implementation will take. Energy businesses

can benefit from being aware of these, and taking

them into consideration during their purchasing and

implementation process.

The early ETRM systems could often take years

to implement, requiring complex coding changes

when configuring the system to meet specific

business processes. This became a significant

deterrent for businesses when considering

moving from an out-dated system. However,

with the most modern systems available today,

implementation can be fast and efficient, due to

flexible customisation designed into the solution,

open API allowing a simple migration of historic

data and cloud technology minimising costs and

69% Of people

surveyed believe spread

sheets are not sufficient to

manage the demands of

the energy sector

www.contigosoftware.com +44(0)2079225150 sales@contigosoftware.com Page 3

Achieving a faster more cost effective implementation

- what businesses need to do and ask

Implementation Influencer 1: Scoping the ETRM system

Effective GAP/FIT analysis during the early scoping

of a system will reduce the number of surprises that

occur during implementation. Energy businesses that

create high-quality requirements containing business

process and domain models can ascertain through vendor

demonstrations how well the system meets their needs

and what level of modification will be needed. At this early

stage, a true understanding of time, resource and effort can

be estimated and effectively planned for.

Every business has unique processes and requirements, and

the goals for a new system may vary considerably. However,

the key objectives should be the requirement to increase

operational efficiency, through automation of business

processes, and minimise data entry errors through STP.

Additional requirements should also be considered, such as

access to intraday and day ahead market platforms, position

and portfolio management data in near real-time, and more.

Vendors supplying easy to implement systems may

also offer a proof of concept (POC) where the system is

configured for agreed business processes, within

an agreed length of time. The offer of this

service demonstrates how swift and simple

the ETRM solution will be to implement,

providing early assurance for the

client. Contigo has successfully

delivered this service to energy

businesses and recommends this

approach for anyone looking to upgrade

their existing systems.

Implementation Influencer 2: ETRM architecture and functionality

The second factor influencing timescales is the ETRM

system that has been selected. Businesses are most

likely to be able to achieve a faster implementation with a

system that is ready to use ‘out of the box’. However, there

are enormous differences in the levels of readiness for use,

with some systems almost having to be built from scratch

for the individual client. A good indicator of an out of the

box system will be the ability to see the system in a live

demo.

Contigo’s enTrader, for example, is a ready to use system

that is pre-configured and pre-populated with data, clients

simply need to add counterparties in order to begin trading.

This means that clients could begin trading in a matter of

days, however, the complexity of many energy businesses

means that more time is taken to ensure the client benefits

fully from what the system can deliver.

There are likely to be some interfaces that will need to be

created to link the system to other client systems, such as

demand forecasting, payment and billing systems. Indeed,

Contigo’s research* cited increased connectivity of different

systems within an organisation as the most likely change

in ETRM systems over the next five years. Again, the ETRM

system itself will play a huge part in determining

whether this work can be done quickly and

efficiently.

An ETRM system with an open API will enable

the fast creation of bespoke interfaces to client

systems such as those for billing or demand forecasting.

In addition, the most modern systems, such as Contigo’s

enTrader, will have a number of existing connections which

will allow the system to be linked to exchanges such as

EPEX SPOT, to trading solutions providers such as Trayport

or to reporting modules for REMIT and EMIR.

System architecture and time to configure which helps

avoid the need for complex development, will impact, not

only the implementation, but also future maintenance.

Businesses should look for a system with scalability, to

allow it to handle higher levels of activity in the future,

such as more trades, commodities or users. In addition, an

extensible system with an open API, will enable the fast

creation of bespoke interfaces during implementation,

supporting efficient connectivity to other business critical

systems including billing, nominations, price, execution

and forecasting. Open API can also bring future benefits;

allowing the system to be extended, for example, to include

bespoke functionality.

Businesses can benefit from selecting an ETRM system

that captures data as a time series such as enTrader. By

having functionality already available to hold data at any

granularity, to 15 minutes and below, will support a faster

implementation process by minimising any functional

extensions or additional development work.

Systems that have been built using the most modern

technology, with smart architecture, and are ready to

use out of the box can deliver faster implementation and

many additional benefits to energy trading businesses.

Businesses should ask vendors about the system

architecture and its out of the box capabilities. Asking for

a live demo, asking about implementation times and also

speaking to some recent clients can help to ensure that

businesses are selecting the most appropriate system.

Implementation Influencer 3: Measurable goals and project milestones

Goals and project milestones should be planned

and agreed between the business and the vendor

to ensure additional functionality is phased

in at a time scale achievable by both parties.

Communicating clear goals internally, as well as

with the vendor will ensure all resource is working

to the same vision with clarity of what a successful

outcome should look like.

Once business processes and data migration rules

have been documented there can be the option

to use an out of the box system in a ‘sand box’

environment, in which the client can trial the new

system functionality and determine if bespoke

adaptations are actually required. With Contigo, for

example, some clients who have initially requested

additional functionality, have decided against it

once they have had the opportunity to use a new,

more modern system.

Software implementations can fail where

businesses are keen to implement all new

functionality and processes at once. Successful

implementations phase functionality, identifying

the processes that should be managed from

day one and introducing only critical operational

features initially. This approach supports continuity

of the business while gaining early benefit from

efficiency savings and data security.

Businesses should expect vendors to assign both

a lead project manager and business analyst to the

project, defining and managing clear timescales,

with weekly catch-ups and progress reports

provided. In Contigo’s view, project managers and

business analysts should have experience in the

energy industry, as well as in the ETRM software.

Contigo also believes its model of handling all the

technical development in-house contributes to the

building of the most modern software solutions,

as the team is at the centre of the business and

is in daily contact with the business analysts and

project managers. There are also advantages of

working with a vendor whose team spans both

the project and live stages to support a smooth

transition.

Businesses can also benefit from ensuring that the

client project team fully understands the business

drivers for the purchase of the system. This may

sound obvious, but in larger organisations there

is the potential for this understanding to become

diluted as the project moves from the senior

management to the project team. Together, the

client and vendor can ensure that the project

team fully understands what the system needs

to achieve and what the priorities are. This is

important to help ensure that the project stays

on course, with priorities achieved and that the

system goes live as quickly as possible.

Implementation Influencer 4: Testing period

Vendors need to clearly communicate the client

resource that will be required for the project and

the advantages for the client of resourcing the

project fully. Clients who are able to allocate a

group of subject matter experts to the project, and

also ensure that these experts have enough time

to allocate to the project, benefit from smoother

and faster implementations. The subject matter

experts are usually team members from front

office, back office and middle office who have

expert knowledge of the business’s processes.

They play an important role, both in terms of

getting the system up and running and in the

ongoing use of the system.

When a business is investing in a new ETRM

system, it makes commercial sense to invest

Using an out-of-the-

box system in a sandbox

environement enables the

client to trial new system

functionality and determine

if bespoke adaptions are

actually required.

www.contigosoftware.com +44(0)2079225150 sales@contigosoftware.com Page 5

Achieving a faster more cost effective implementation

- what businesses need to do and ask

the time of key personnel to ensure that it achieves the

maximum possible for the organisation. It can be the client

under-resourcing of the project that can lead to delays, and so

clients should not underestimate the importance of planning

their resourcing carefully.

The system testing stages are one of the key milestones that

it is important for both vendor and client to plan together

and resource fully. Test cases and data need to be carefully

prepared in advance. A clear plan should be devised and

agreed up front, covering how the testing periods will be

resourced and managed. The plan should include how issues

will be assessed, what resource will be on standby to resolve

issues and how the testing can maintain momentum.

“The way in which testing is managed can have a significant

impact on project timescales. A common mistake is for testing

activity to be suspended while smaller bugs are resolved.”

Advises Simon Stevens, head of technology at Contigo.

“A traffic light system for issues raised should be agreed,

defining the urgency of the issue and what testing can be

continued around the fix. Vendors can determine the best

way to roll out fixes with minimal impact to the testing period,

whilst ensuring a robust and quality build.”

Implementation Influencer 5: Training

To gain full value from the new asset, in-depth understanding

of the system’s capabilities are required. A user-friendly

system with intuitive help screens will support a swift and

easy adoption for users. In addition, businesses can benefit

from using a vendor that makes training an integral part of

the implementation process. During the project the subject

experts should also become expert users of the new system,

which will have ongoing benefits for the business.

In Contigo’s view, the training should extend to the

configuration of the system. While Contigo could undertake

all of the configuration on behalf of the client, we have found

that by training clients to configure the system themselves,

they gain a better understanding of the system, the

information within it and how they can use it to the benefit of

the business on an ongoing basis.

Implementation Influencer 6: Communication/partnership

The most effective implementations are achieved when the

client and vendor work in partnership, to an agreed plan and

to agreed timescales, with a clear understanding of what

is expected of each party. The experience and capabilities

of the software vendor’s team will also have a substantial

influence on the efficiency of the implementation process.

While it is true that the success and speed of an ETRM

system implementation can be attributed to a large degree

to the experience and professionalism of the software

vendor and to the ETRM system itself, the client also has

an important role to play.

Energy businesses looking to procure a new system

and for whom a fast and effective implementation

is a key requirement, should ask questions about

the system and its implementation process,

work with the vendor to agree the business’s

requirements of the system, and work in partnership

with an experienced vendor team to achieve the best

outcome within agreed timescales.

The implementation of an ETRM system can be an important

step forward in the operational effectiveness of a business.

It can work to support individual business processes, adding

automation, helping businesses to react swiftly to commercial

opportunities, reducing operational costs and future-proofing.

With a system that is such an integral part of a business, the

best implementations take place when clients and software

vendors work in partnership. Shared knowledge and effective

planning lead to system implementations that meet the

business objectives and are also achieved efficiently, to

agreed timescales.

For further information: www.contigosoftware.com info@

contigosoftware.com.

About Contigo

Contigo provides a powerful energy software

suite that is used by energy generators, wholesale

traders and retail suppliers across Europe.

Contigo’s solutions are delivered either on premise

or securely in the cloud under a SaaS model. Its

award winning ETRM solution enTrader manages

the full trade lifecycle from deal capture, through

portfolio and risk management to settlement.

Contigo’s software was voted number one for ‘ease of implementation’ in the Energy Risk Software Rankings 2017. enTrader® is pre-configured for the

European energy market with ready to use functionality and is fully integrated with Trayport’s GlobalVision

Trading Gateway.

Contigo is a business unit of Trayport Limited, registered in England and Wales.

About Trayport Limited

Trayport is a leading provider of energy trading solutions to traders, brokers and exchanges worldwide. It

develops, deploys and supports quality, resilient software for trading in multiple asset classes worldwide in

cleared or OTC markets. Trayport’s software is used by the world’s largest trading companies in high profile

markets. Founded in 1993, Trayport has offices in London and Singapore. Trayport Holdings Limited is a

wholly-owned subsidiary of TMX Group Limited (TMX Group). For more information about TMX Group and

terms of use, please visit: www.tmx.com

References

*‘The Future of Energy Trading’ digital survey undertaken by Contigo 2018

Contigo, winners of Energy Risk’s ‘Ease of implementation’ award

2017enTrader works out-of-the-box for rapid

implementation

For the full research results:

https://www.contigosoftware.com/energy-trading-maximising-

profit-minimising-risk-age-change/

Contact usCall: +44 (0)207 922 5150Email: sales@contigosoftware.comVisit: contigosoftware.com / contigosoftware.de