Hydrocarbon Processing - April 2022 - GP-9

INDUSTRY FOCUS
Maximizing the performance
of your ETRM system
T. KROH and B. YORK, Opportune, Tulsa, Oklahoma
Energy trading and risk management (ETRM) systems are
vital for the support of business processes associated with trading
energy commodities such as crude oil, refined products,
natural gas, natural gas liquids (NGLs) and electric power, as
well as facilitating the movement and delivery of those energy
commodities and associated risk management activities.
While legacy ETRM software systems have filled critical
functional gaps for the daily transaction of energy commodities
over the years, many of these solutions are becoming obsolete
or have not adapted to changing business conditions. Upgrading
to modern concepts like cloud-centric architectures and/or
digital strategies would serve companies well in that they can
provide a scalable, reliable, affordable and fit-for-purpose technology
stack that enables more effective trading and risk management
capabilities.
What can energy companies do to stay ahead of the ETRM
curve? Gas Processing & LNG (GP) spoke with Opportune's Directors
of Process and Technology Teresa Kroh (TK) and Brad
York (BY) to gain their insights on what decisions go into implementing
an ETRM system, the intricacies of how to stay on
top of ETRM solution upgrades, and how companies can stay
competitive this year, among other topics.
GP: Where does the energy industry stand today
in terms of ETRM technology? What needs to be
done for companies to upgrade or enhance outdated
systems that may hinder operational efficiencies?
TK: There are fewer players in the market and recommended
solutions for companies that share a similar business model, so
most companies do not need an extensive software selection process.
Most of the systems that handle enterprise-level risk and trading
still require on-premises servers and custom configurations,
along with a user interface typically delivered through Citrix.
Most vendors provide software upgrades for free and encourage
all customers to keep current with the latest release. However,
every upgrade-even minor releases-requires targeted
test plans and system downtime. There is a risk to continuing operations
associated with every upgrade. Every upgrade requires
solid project management supported by a team of people who
understand the components of a successful upgrade, including
the system hardware and delivery design, along with the testing
and cutover requirements.
BY: The challenge I see with many companies in the energy
industry is they will implement a system and think that is all they
need to do. To keep up with technology, any company, regardless
of the industry, must continuously upgrade and enhance its systems.
This needs to be an ongoing process. I see companies that
are on a platform that is more than 10 yr old because they were
hesitant to upgrade. The longer they wait to implement or upgrade,
the more expensive it is to implement. Technology changes
rapidly and performance alone is probably worth the upgrades.
It is a bit of a pay now or pay more later. I have worked with
companies that had a history of putting off upgrades and as a
result, ended up implementing a different system-twice. The
cost of that implementation and changing platforms was much
greater than the cost of upgrading more frequently.
GP: How do you see ETRM technologies evolving
in 2022 as they enable companies to better respond
to the demands of the future?
TK: The next big shift should be to true software as a service
(SaaS) delivery of functionality. Most of the players who
claim cloud-based solutions are just hosting individual installations
by the customer on offsite servers. The next major shift
should include:
* SaaS-based solutions without the intensive server and
software support teams per customer
* Core interfaces to the basic and necessary information
to feed an ETRM system, including bills of landing
(BOLs), pipeline tickets and nominations, invoices,
pricing services and exchange-based trades
* Taking this one step further, the ability to confirm/
approve trading activity and billing between
counterparties that are using the same software without
resorting to printing, email or other electronic methods.
BY: My experience is with one system, but I am aware of
other similar systems. From my perspective, it seems that .NET
technology is more flexible and easier to upgrade than older platforms.
As performance improves, more complex calculations
related to risk can be executed. As we talk about risk, which is
important, we must also note the basics in the system must be
there. If the data in the ETRM system is not reliable, there is no
reason to try to use it for risk analysis.
Currently, there are only a few players, and most are a part of
one company. A new software vendor will likely emerge, but it
may be a bit difficult to enter the market.
GP: What are a few key things companies need
to know before, during and after an ETRM
system implementation?
TK: Having an experienced team dedicated to the coordination
of design, testing, cutover planning and technical solutions
is vital. This team requires project management, business
users and server administrators, as well as developers who are
Gas Processing & LNG | MARCH/APRIL 2022 9
Hydrocarbon Processing - April 2022

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