Energy commodity producers, traders and buyers have for a long time bemoaned the limitations of traditional ETRM systems that do not support the many complexities of their organisation’s commodity processing workflows. With this in mind, Gen10 Founder & CEO Richard Williamson discusses his thoughts on the future of ETRM and how Gen10 are already solving many of the industry’s challenges. 

Evolving Customer Needs & Industry Trends

As commodity management technology providers, we need to be addressing the needs of our customers’ customers. We already have the data, processes, controls and reporting in place for our clients. The focus now is on how they can increase customer service, such as via our client portal dashboard for tracking orders and open commitments, and how we can help them share important data with their customers.

In the physical energy space, where we are relatively new but making good traction, companies are faced with an urgent dilemma with traditional E/CTRM systems; with the shift from centralised to decentralised and fragmented supply chains, they find that they are not able to cope. These systems were simply not designed for a decentralised supply chain and all the operational challenges that come with it. This is where our years in tracking the operations of a variety of commodities down to the pallet or even unit is reaping dividends for our energy clients.

Carbon and climate offsets and trading is a really exciting space with huge demands on digital technology. We have put considerable effort into this over the years and it looks like Carbon 2.0 and environmental markets will go the distance this time round – which is great news!

The tsunami of tighter governance & provenance is coming from all sides; trade finance, insurance, government policy, and social media/consumer demands. It’s only going to get bigger and digital plays a significant part of the solution, with a need for technology that emphasises operational risks and controls.

Standardisation (or Organisation)

A trend that should exist but perhaps isn’t realised just yet is standardisation. Everyone is still struggling trying to organise their data so that they can get reports, which means innovation has to wait. 

Standardisation is a sensitive topic, as of course nobody wants to lose their competitive edge, so maybe “organised” is a better term to use. But however we phrase it, it has to happen. Contracts can still be creative, they just need to be organised better. Data can be more structured without giving up opportunities or IP. And until it is better organised, digital transformation & innovation, and the new ways to make money and ability to source responsibly that these create will be limited. Its full potential will not be fulfilled. 

And organisation doesn’t need to be difficult. At Halcyon Agri/Corrie MacColl, the largest rubber trading company, Gen10’s platform was selected to harmonise data and processes across their global operations during a post-merger integration; which was achieved in under 6 months. 

This shouldn’t be interpreted as simplifying or reducing business creativity in order to adhere to how the system is designed. The system needs to be both specific and fluid to facilitate the business. It’s the creativity and the often-non-linear processes, the exceptions of commodity trading, that add value but make it hard for an ERP system to accommodate without considerable time, effort and investment. Witnessing the return of companies to the E/CTRM marketplace having tried to go down the super-expensive ERP route for the last 6 years is testimony to that. 

Monolithic systems vs modular ecosystems

The lessons have been learnt and it’s now widely accepted that the monolith stifles innovation while a well-managed modular approach enables it. There still needs to be governance and a sound methodology, but with the flexibility and agility that a modular approach can give, digital transformation is achievable. But the whole procurement/selection process for systems needs to change and welcome the innovators. Otherwise industry players are likely going to continue to be stuck like they have been for the last 30 years or so. 

 

If you have any comments on these thoughts, or would like to discuss them in more detail with Richard, leave a message below.

Ags and softs CTRM needs to be grounded in operations

Green steel could lead to unexpected collaboration

Gen10 launches NetZero OS – a new digital solution for environmental markets