The benefits of an integrated ETRM

With the complexity of the oil industry and the myriad software systems which underpin it, software upgrades, integrations and replacements have traditionally been characterised as a painful, slow and expensive process and it is no wonder that it has been avoided or postponed if at all possible.

By contrast, modern systems such as those Gen10 provide offer a superior means to the same end – an incremental, rapid and low risk path to easier systems integrations and upgrades, quickly and painlessly adding additional functionality with tangible results and rapid customisation.

Of course, the successful management of production and processing operations in constantly demanding oil markets needs the flexibility of purpose-built commodity trading and risk management (CTRM) systems, delivering streamlined automated processing on top of accurate trading and risk management reporting. Additionally, tightening regulations mean that finance controls provided by systems that can provide fully integrated record-to-report processes are the only way to guarantee greater confidence in providing accurate, consistent reporting to all stakeholders.

The ability to easily integrate the front office marketing and trading functions, the middle office risk functions and the back office/ERP functions through automated processing and reliable data-sharing enables both oil production and oil processing companies to improve operational efficiency, reduce the risk of human error and realise a good level of ROI.

Gen10 has a successful track record of providing a flexible and cost-efficient software ecosystem where data in its many forms can be ingested, processed and distributed across teams and software platforms according to requirements. Automated processing workflows reduce the risk of errors and can be customised to fit your processes and share data with your existing software without the need for costly development. Analytical tools create secure and comprehensive reporting for those who need it, or implement real-time integrations to BI software for valuable decision-making support and reliability.

ETRM implementation challenges

In the oil industry, the integration of separate software solutions that provide the necessary level of operational reliability whilst enabling full visibility into commercial opportunities has always been a challenge. Management often find themselves spending increasing time and resources focussing on achieving the necessary levels of integration between technologies, particularly where:

  • Organisations already have an ERP system and now need to add a dedicated ETRM solution
  • Companies have decided to invest in separate systems from different software vendors
  • Companies are in the process of replacing ageing systems with more up to date solutions
  • Mergers and takeovers result in a diverse range of applications using different operating environments, necessitating bespoke software to connect them together
  • Organisations are in the process of migrating their existing systems to the Cloud.

Many organisations discover too late that integrating a dedicated ETRM solution with their existing systems presents unforeseen challenges with regards to collaboration across technology, necessitating significant outlay of resources and time – all this before realising any tangible benefits from the new solution. Typical issues facing these integration projects include:

  • Differences in methodology for certain key calculations, for example cost of sales or valuing inventory
  • Differences in the timing and availability of dependent data used for real-time or time-sensitive processes, for example for end of day snapshots or month-end closes
  • Differences in precision, rounding, currency conversion, units of measure, product conversion factors – especially true for oil conversions from mass to volume
  • Differences between the system environments, for example admin rights, programming development tools and architecture
  • Differences in the treatment and processing of data and data models, for example between customers and business partners or differing data hierarchies.

Achieve effective systems integration

Gen10’s ecosystem of collaborative apps and APIs means that the connected apps and data exchanges take place under a single architecture and integrate seamlessly with your other technology. In addition, Gen10’s app-based technology can be implemented incrementally, adding value to a single process or multiple discrete areas, then integrating additional processes after the initial implementation has been successfully deployed. This provides rapid results with both users and technicians able to see immediate tangible benefits. Deployment can then be controlled and rolled out as required by each office or function rather than relying on single moments where large-scale disruptive changes occur.

Typically, ETRM systems are developed under the assumption that the entire origination-to-settlement lifecycle will be processed wholly within the single system. However, in practice most organisations will need to integrate with other systems. This generally necessitates breaking that transaction flow at one or more execution steps. For example, a deal that begins life in the enterprise trading system may be settled in the ERP application. If the architecture is not considered carefully, this can result in unfinished processing in one system and incomplete information in another.

erp oil

Gen10’s solutions are instead designed specifically to facilitate collaboration with other software, including other Gen10 apps and systems such as ERP and General Ledger. The best results are normally achieved when the integration occurs at natural breaks in the transaction process such as after deal capture and/or contract generation, after scheduling or after billing and invoicing. Once the optimum integration points for a client’s own unique business processes are identified, then the Gen10 system can be customised to their process, tested and deployed seamlessly.

Spending time up front to determine the integration framework that delivers the best mix of advantages, benefits, and costs in a particular business context will prove well worth the effort. Regardless of the integration model selected, the following principles should be carefully considered:

  • Examine core master and reference data for validity and tighten related information management processes.
  • Focus on integrations that support the timely and accurate completion of business processes, helping people do their jobs more efficiently, as opposed to simply providing data for reporting.
  • Consider utilising a data lake together with other analytics solutions to provide for cross-system reporting and reconciliation capabilities.
  • Carefully consider your company’s current IT delivery and support competencies when selecting the integrated solution and ensure any potential technology partner can provide a training and support package that fits your business.

The oil production and oil processing industries are often discouraged from implementing new systems or replacing old ones due to the sheer complexity and sophistication of the day-to-day operations meaning any changes present considerable risk. This risk is only magnified in today’s operating environment with increasing demands from external drivers such as regulation, geopolitics, customer demands and environmental challenges. Gen10’s technology – through its flexible app-based design and readily customisable architecture is uniquely positioned to help simplify and de-risk this process for our clients.

Get in touch with us today to find out how this flexible app-based approach could help you gain more value from your own systems and technology.

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