Flexibility and standardisation – partners, not opposites

Last week, the Gen10 team joined the collection of industry-leading conferences at Energy Trading Week as event Carbon Markets Partner. As ever, the sessions were packed with insightful debate, best-practice advice and speakers’ own experiences of tackling some of the greatest challenges the energy and commodities industries are facing right now.

We noticed that at many of the sessions we attended across multiple conference streams, standardisation was firmly on the cards. This was discussed both in terms of standardising internal company processes, and in terms of coming together as an industry to collaborate and improve.

As we have said many times before, we at Gen10 strongly support standardisation and collaboration across the industry, and we intentionally build our software to support this. So we were surprised to hear a lack of ambition when it comes to internal standardisation.

In particular, one panellist spoke about how it’s ok to aim for 80% standardised processes. We certainly agree with this. Every organisation needs to build flexibility into their operations and there will always be some exceptional cases where the standard operating procedures do not quite provide the right outcome. However, they then went on to say that this means that people need to assess the risks of operating outside the system. And this is where we disagree – even exceptional contracts should not be managed outside of the Commodity Management System.

Any Energy or Commodity Management System should have the flexibility to support non-standard contracts within the system, even while it is supporting standardisation where relevant. There is much discussion of managing by exception, and of having the systems in place to automate where possible so that your people are only involved where they need to be. But if entire contracts are managed outside the system, they must be processed entirely manually, adding to workloads as well as introducing unnecessary operational risk – from the potential to miss deadlines, conditions and shipments, to making reconciliation and reporting far more challenging.

This is why system flexibility is essential. Non-standard and OTC contracts should still be managed within your usual Commodity Management System, that system simply needs to be flexible enough to accommodate different data, processes and workflows. Especially as these non-standard contracts will typically still follow one of your standard workflows, so there is no reason to manage them outside of your core system simply because some of the details are different.

For example, Gen10’s CommOS is powered by automation workflows that set the paths for all contracts to follow through your processes, from deal capture to approval and contract creation, to logistics, shipping, invoicing and risk managers. All of your contracts may not follow this exact same process; contracts may need reworking or escalating before approval, shipments could be returned, and you may have different workflows for goods being shipped to warehouses compared to directly to clients, to name just a few examples.

Building flexibility into your CTRM or Commodity Management System is therefore an important step on the road to standardisation. It allows your front- and back-office teams to operate with creativity, providing the structure to improve efficiency and ensure smooth operations whilst adding the freedom to use their own judgement and skill to create the best, most profitable strategies.

If your CTRM’s lack of flexibility is holding your team back, discover CommOS today.