Energy and Risk Management (ETRM) solutions are purpose-built software systems to automate tasks and business processes supporting the entire trade cycle from deal capture and contract management, to pricing and complex fees, trade confirmations, portfolio management and valuations, risk controls, collateral and credit management, to settlement, and regulatory compliance reporting. With so many different requirements and wishes, implementing ETRM software quickly becomes complicated. While an important factor for success is to keep it simple.
Basic and rapid implementation at low costs
It is tempting to set a broad scope, so that you can create a complete solution for everyone or every process in the organization. But is that feasible? A broad scope, including custom software extensions, means a larger and more complex project. That may look good on the drawing board but in practice usually introduces dangerous stumbling blocks that create distractions and increases risk. It will cost more money, more time, and increases the chance of errors and problems. And you might include topics in the ETRM implementation that you don’t need or that you can better save for a second phase.
An increasingly popular delivery approach is creating a Minimum Viable Product (MVP), by resisting doing too much at the same time and utilizing the system’s standard configurable functionalities. It is intended as a simplified concept that is gradually developed and further defined. It facilitates an initial design phase to confirm the cohesive end-to-end design, allows to validate the agile implementation methodology, and enables to showcase the functional capabilities to the stakeholders. By going live with what is really needed, the ETRM implementation is kept simpler. The go-live of the system is not the end. It is only the starting point of improvements.
Ease of use for quick learning and user adoption
Achieving digital transformation is critical to energy organizations, however, the pace of technological change in workplaces is often slow due to poor communication about the strategic benefits of new tools. Getting employees on board is often a challenge. Users need to understand why the new technology is an improvement from what they had before, and how it makes their lives better, and make them comfortable so they will use it. Advantages of the keep-it-simple principle is that thanks to the faster implementation, the positive effects become apparent sooner, and early user experience makes it possible to better integrate suggestions for adjustments made by the users and thus more systematically optimize the overall process. Moreover, an agile implementation method can cushion the reality shock.
ETRM projects fail due to poor user adoption. Part of this has to do with software that wasn’t developed using best practices in user experience design. Systems infused by ‘consumerization’ – the reorientation of products designs to focus on the end user – better recognize how users interact with software in their daily work as they do in their private lives, with intuitive screens, fast data entry, easy outputs and report-writing, and flexible functionality that can be tailored. An ETRM system that is user-friendly and that supports processes that are simple, clear and transparent (not a blackbox), is easy to use for your employees and, crucially, instills trust. Whether it is a new ETRM system or new employees; a short learning curve increases the productivity, pleasure in the job and efficiency of users. With a simple ETRM system, you lower the threshold for employees to use the software in the way intended. An ETRM system that is complicated, slow or with a poor user interface will easily be avoided by users. They revert to the old way of working, search for workarounds or resist the ETRM system.
Internal and external support becomes easy
With every ETRM system, support is necessary. This begins internally with the IT department and key users. And of course, support is easier with a simple ETRM system. You can successfully help users of a simple ETRM that need support more often and faster. As a result, they are more productive, and you will not have to reach out to the support department of your ETRM vendor that often. And that saves time and money. If you opt for complex processes, lots of customizations and various interfaces and integrations, then support becomes more difficult, both internally and externally.
Future new functionalities and upgrades go smoother and are cheaper
Driven by the realities of continuous change, there is no escape having to consider the future when choosing a ETRM system. Forward looking companies anticipate potential growth, new markets, developments in the industry, changes in legislation and regulations, and technical developments. All reasons for flexible and scalable ETRM solutions that allow to make configuration changes, to start using extra modules and functionalities and to upgrade to new versions of the system. And with a simple ETRM system, that goes much faster, more pleasant, and cheaper than with a complicated ETRM system.
ETRM delivered as Software-as-a-Service
There is growing recognition that solutions work better if they are kept simple rather than made complicated. Cloud-based Software-as-a-Service (SaaS) is focused on the future agility of your business: through automatic updates you can access the latest innovations and emerging technologies. A cloud-based ETRM system also facilitates scalability.Â
Although simplicity in ETRM offers many advantages, it is not always realistic. For some companies, the processes are a bit more complicated, or customizations are necessary, or interfaces with other applications are required. But complexity should not come at the expense of effectiveness, so, if possible, it is good to keep ETRM simple and manageable. Simpler approaches with a solid baseline plan and continuous adjustments are often more successful.