August 16, 2023
Chatting with two friends of mine—a trader and her scheduler from a major energy company—I casually enquired which IT assets were most reliable and critical to their day-to-day work.
“Email, chat, and spreadsheets,” they agreed.
As an advocate for the value that enterprise ETRM systems—and their associated ecosystem—can deliver, I asked how they made use of their company’s ETRM and ERP.
They hummed and hawed and gave me an “if you can’t say something nice, why say anything at all?” response.
I felt triggered. How can it be that an end user to whom I believe we deliver tremendous value doesn’t feel the same way?
I posed this question to several consultants with major ETRM and ERP implementations under their belts, to hear their side of the story.
They spoke about end users who didn’t value enterprise security as highly as their management.
Some users dismissed the importance of consolidated reporting, while others saw limited use for semantic and contextual standards that ensure accurate communications within and between the complex organizations they represent.
Many end users exhibited blind spots outside their immediate sphere of operation, adopting an “it’s not my job to worry about security/auditability/etc.” attitude.
After following up with some shuttle diplomacy over the last few months—including some expensive lunches and quite a few drinks—it has become clear that the complexity found in some of today’s large-scale ETRM systems has become off-putting to end users.
Alarmingly, it may have turned enough of them away that the very purpose of the systems—and thus their promised ROI—could be under threat.
Based on my conversations, I’ve developed a set of questions that should be asked during an ETRM implementation and again after a period of use.
Hopefully they will help close the gap between desired and actual return on investment.
One of the primary complaints voiced by end users is that workflows developed to provide controls are too complex to implement and use.
For each such control, it is therefore important to ask:
Trading desks are inherently skilled at managing market risks, credit risks, and operational risks, so they are well equipped to evaluate the effectiveness of IT-based risk controls.
Allow them to assess their specific processes and they might suggest simplifications that the consultants have missed.
Another end user bugbear is excessive system interaction, especially data entry.
Wherever data entry or transfer occurs, ask:
Crush the need for reconciliation wherever it raises its ugly head!
A third end user nightmare is being forced to digitally transform.
Digital transformation is a grand aspiration. To see real value, an organization must measure and compare actual improvements in process efficiency with the theoretical improvements that underpinned the business case for implementation.
To sustain end user engagement, try asking:
Many digital transformations waste enormous amounts of time and money because end users ignore or actively resist moving away from established systems and ways of working.
This must be consciously addressed by taking measures to build end user confidence in the transformation initiative and the systems being implemented, which will ultimately determine how comfortable they are being “transformed”.
Major ETRM implementations—like any significant enterprise software replacement—take a long time.
It’s easy to lose sight of the business case that was presented at the time of purchase.
Furthermore, the task of measuring the actual value delivered by an ETRM implementation and comparing it to what was promised can require an audacious framework of measurements and accountabilities.
However, we already force our trading desks to mark to market and tie their activities to realized profits and losses.
Those same desks would feel a lot more comfortable about ETRM implementations if we followed similarly strict requirements when tracking the cost and value delivered.
The feedback I’ve gathered suggests that internal and external implementation teams need to have a much more solid grasp on how much ROI is expected from each new process they transform.
These discussions have also made me realize that there’s a stark divide in how the success of some trading system ETRM implementations—or operational and scheduling transformations involving ETRM systems—is reported by different stakeholders.
In many cases, the IT team (including implementation consultants) reports that they have delivered great value, while end users at the trading desks see limited value and perceive an unnecessary increase in complexity.
How do the two sides end up with such differing views of the same reality?
How can such glaring mismatches of objectives and actual performance co-exist, when so much money is being spent?
I have heard about cases where entire systems—replete with reporting capabilities and dashboards—were built, kickoffs and go-lives completed, and celebrations held, and yet end users didn’t actively use them afterwards (except to enter data).
Perhaps we need to periodically evaluate each team’s ability to keep backup systems in retirement and make exclusive use of the new tools?
An annual review for each desk would expose differences between perception and reality and could help align incentives for both system implementers and end users.
What else should we be doing at the start of these journeys to ensure the best of breed solutions we have painstakingly selected deliver as promised?
Can we rekindle the flame and get the two sides back together, at least to be effective co-parents and minimize the conflict?
By consciously asking questions and having a few more concrete answers, can we regain end user buy-in and restore confidence in the ROI that enterprise ETRM systems can surely deliver?
Perhaps we need a new catch phrase, such as “digital simplification”?
At Trellis, we will continue exploring ways in which our industry—and especially we as vendors—can use existing and emerging technologies to deliver simple, elegant solutions for our end user community.
Watch this space as we brainstorm and present new ideas in future editions of this blog.