ETRM Designed for Natural Gas
Energy Trading and Risk Management (ETRM) solutions are near and dear to my heart, having devoted so much of my career to ETRM software and its customization for company-specific needs. Unfortunately, customizations are the norm, representing high cost and high risk to unsuspecting buyers whose businesses need functionality beyond what traditional ETRM software provides. It wasn’t until I exited a global ETRM software company that I came to realize just how universal the term ETRM is in the industry and how convinced companies can become that an ETRM system will accommodate all their requirements, when, in fact, ETRM functionality lacks many crucial operational capabilities.
Consider, ETRM vendors specialize in developing and selling trading software in support of a wide variety of wholesale commodities, such as power, natural gas, crude oil, refined products, corn, wheat, metals, and many others. Serving the needs of such a range of commodities means ETRM software functionality is inherently designed for general breadth. While an ETRM’s wholesale breadth is capable of meeting certain business needs, its limitations fail to serve the needs of organizations that require both retail and wholesale functionality depth to support the operational processes and related day-to-day activities of a Natural Gas business.
Natural Gas businesses who select nGenue, either to replace, or instead of, a traditional multi-commodity ETRM product, do so for one or more of the following reasons:
- Functionality: Regardless of the multi-commodity ETRM product, all require customization for Wholesale natural gas functionality (no such thing as out of the box functionality) and none offer Retail functionality.
- Cost: Multi-commodity ETRM products are expensive to license, expensive to implement and even more expensive to maintain (require highly skilled resources) over the life cycle – ask any company using a traditional ETRM product and they will tell you they have spent millions to stand it up, operate it and support it.
- Enhancements: Functionality enhancements are always necessary and never free, but rather come at substantial cost – traditional ETRM vendors and their consulting partners thrive on revenue from a multitude of customizations (for what should be standard functionality) and the never-ending cost to support them.
How then do companies address the depth of natural gas-specific operational requirements, such as seamless integration of sales, complex pricing, nominations, forecasting, billing, invoicing, collections, taxes, accounting, and Utility / Marketer communications? While too many have followed the path of multi-commodity ETRM software acquisition and customization, I can state with experience-based certainty that this approach is not a winning proposition, but rather a costly and risky one. Here are a couple of ETRM vendor quotes: The first comes from a global ETRM vendor’s consulting head, who said, “There aren’t enough enhancements that can be made to our product to meet the needs of natural gas business operations.” The second comes from another global ETRM vendor’s product development head, who stated, “We would have to rewrite 13 million lines of code to support natural gas specific business requirements, and that just won’t happen.”
The good news is that someone has already written all that code! nGenue is an off-the-shelf, fully integrated wholesale and retail software solution for natural gas operations that costs a fraction of ETRM software and eliminates the time, cost, and risk of traditional ETRM software customizations. nGenue functionality spans all day-to-day business operations from the wellhead to the pipeline to the city gate to the meter. It houses all wholesale and retail operations data in one central repository, simultaneously accessible for all operations staff via a standard user interface and has been in production use for 25+ years.
Distributors, End Users, LDCs, Marketers, Pipelines, Producers, and Utilities face increasing competitive and compliance pressures, requiring increased operational efficiency, data integrity and process improvement. Their operational systems must support this, but most do not. Engage us and we will show you how to make a breakthrough. It’s what we do for natural gas companies, and we are experts in our field.
~ Ken
