November 29, 2023
We’re over a decade into the digitalization era, yet many businesses still depend on manual processes—including good-old pen and paper—to manage their operations.
You might think that energy operations—which are inherently complex, data rich, and fast-moving—would be at the forefront of digital adoption.
Sadly, that’s not always the case.
While software and systems exist that take full advantage of the latest in cloud computing, many energy transactions still flow through sticky notes, spreadsheets, and manual data entries.
If this sounds familiar, consider the following attributes of a true cloud solution, and then weigh the pros and cons of sticking with your status quo.
Without meaning to sound too condescending, it’s time to wake up and smell the coffee.
Companies that aren’t running true cloud energy transaction management systems are leaving money on the table and running unacceptable risks of data loss, security breaches, and value destruction.
Let’s dig in.
Many energy transaction management systems (ETMS) are either hosted on prem—i.e., on the company’s in-house hardware—or have an on-prem component.
This means that those systems will be inaccessible if the on-prem hardware fails or cannot be accessed via a web-based portal.
Some of you will remember the catastrophic impact of Hurricane Harvey on the Houston energy complex when power and access to on-prem systems were cut off for days.
With a true cloud solution, you can manage your entire transaction process from anywhere, using one URL.
Your data and workflows are securely replicated across multiple cloud servers, ensuring near-perfect uptime and near-infinite processing capacity.
Some IT infrastructure is inevitable, but not for your ETMS.
With a true cloud solution, you no longer incur the cost of installing, configuring, maintaining, and replacing on-prem hardware to keep things running.
Many companies hire entire teams to manage the implementation and upkeep of their on-prem ETRM and ETMS systems.
This personnel cost is minimized when deploying and using a true cloud system.
Companies with on-prem systems must run offsite backups and install redundant hardware to keep their transactions flowing in the event of a failure.
The intrusiveness and storage of those backups and the capital expense of that hardware are a complete waste of time and money.
What about sunk costs?
Most IT infrastructure becomes obsolete within five years or less, especially if you want your team to perform its calculations as fast as your competitors.
“Sunk” is an understatement.
The only thing that’s constant is change.
Whether it’s the regulatory environment, the commodities you’re trading, or the infrastructure you’re trading them on, the world of energy transactions never stands still.
And nor should your ETMS.
True cloud solutions are automatically updated, without interrupting the user experience and without placing a burden on the company.
Major updates are typically rolled out semi-annually, with incremental updates and bug fixes being delivered at a more frequent clip—sometimes as often as every two weeks.
What’s important is that updates can be rolled out to every user, immediately, whenever they are needed or ready.
Not so fast, on-prem people.
How fast a legacy system gets updated depends on the complexity of the installation, which might vary from location to location because of hardware differences and bespoke integrations.
It will also depend on the size, availability, and capability of the company’s IT team or contractor.
Unsurprisingly, most non-cloud systems are perpetually out of date—many of them horribly so—leaving their users at a commercial disadvantage and at risk of non-compliance with the most recent regulatory updates.
These two can seem like a paradox: running your system in the cloud guarantees greater availability, but doesn’t that also make it less secure?
Quite the opposite, actually.
Running your ETMS in the cloud makes it more widely available, with greater uptime, and far more secure.
Cloud-based solutions are run behind constantly updated cybersecurity tools and protocols.
Can you say the same thing for your sticky notes and spreadsheets? Didn’t think so.
There have been several reports of security breaches at companies running hybrid (cloud plus on prem) systems, too. We’re not aware of any affecting true cloud solutions.
The biggest impediment to most companies making the switch to a new software platform is that it requires a painful rip-and-replace transition.
ETMS and ETRM systems are inherently interconnected with several other systems in the corporate IT landscape—and that landscape looks slightly different at every company.
True cloud systems are designed for digital integration with a wide range of third-party applications.
This allows the company to continue using other legacy systems where they have made significant investment, or which some stakeholders simply refuse to let go.
True cloud solutions are cheaper to implement, operate, and maintain.
They are inherently more accessible than on-prem implementations, allowing you to run your business from anywhere, whether by design or in an emergency.
Cloud security technology is constantly evolving, making your data far less vulnerable to a cybersecurity breach than legacy solutions—especially those involving spreadsheets and offline data transfers.
Implementing cloud solutions is less painful and less time-consuming than would have been the case for legacy on-prem and hybrid systems. They require minimal on-site infrastructure and are designed to integrate with your existing IT systems without requiring extensive on-site effort.
Perhaps most critically, true cloud solutions are faster, more frequently updated, and easier to use than legacy systems, which makes your team more effective and more productive.
Businesses that have adopted true cloud solutions are operating at a competitive advantage over those that have not.
Where does your business want to play?
At Trellis Energy, we believe that a modern natural gas supply chain should be digital, efficient, and easy to manage, ensuring the delivery of clean energy when and where it’s needed. We’re in business to make that a reality for natural gas in North America.
Talk to us about Digital Simplification for your climate, trading, and logistics goals.