Selecting and Implementing Energy Trading, Transaction and Risk Management Software - a Primer

In my opinion, this book is a must-read for everybody planning to implement or implementing an Energy Trading, Transaction and Risk management (ETRM) system.You don't select or implement an ETRM system that often. Even if your organisation is fluent in selecting and implementing software, ETRM software and its market have their own problems. This book will open up your eyes to a few of them. Of course the book is full of 'I could have thought of this myself' moments too, but to think 'I could have thought of this myself' after a multimillion dollar implementation is not very comforting.The authors start with an overview of ETRM Software and the ETRM Software landscape. Who uses ETRM software, who provides ETRM software, what does ETRM Software do. Individual vendors are listed with their addresses in an Appendix, more detail is not provided.In the second section of the book they describe the selection process. This is done in a more abstract way, as the target market is quite diverse. Starting with a discussion on whether to have a 'best of breed' or a 'sole sourced' approach (DIY is not discussed) they continue through the RFI/RFP process and the software demonstrations to the negotiations. I've never been involved in this process, but my life after the selection would have been different had this book been available at that time.The implementation section is interesting too. Especially the recurring stressing of 'own your project' is apt. The client must own the project and dedicate its most skilled people to the project. And at the clients site, the business should own the project, not IT. So you should dedicate your best business people preferrably full time to the project. (You will be working with the software in the next 5-10 years, and if your implementation is less-than-best, your best people will have lost much more precious time in the end.) This section also contains information on the use of vendor resources and external consultants. Two sponsoring companies provided a chapter each, where the Deloitte & Touche chapter on testing is a gain to the book.The chapter dedicated to the use of third party integrators starts with survey results. These results show, that al longlasting projects use third party integrators, whereas half of the fasttrack implementations don't. This is explained with the complexity of the projects creating the need for external expertise. On the other hand, you could heretically ask, whether external integrators add to the complexity. (I am allowed to ask this question, as I'm a 3rd party consultant as well.) It is typical for the book, that this issue is pointed at in a paragraph titled 'No Incentive to Complete the Project'.Section 4 is on the maintenance of the system. One chapter deals with the support & maintenance agreements, the second with updates. A chapter on the client-side organization of the maintenance is missing. The sponsor responsible for the updates chapter unfortunately failed to differentiate between updates and implementations.In the end, there are some Focus Topics. Two of them shine a light on the ETRM market from a vendor perspektive, and what the implications are for the customer. This is great food for thought. (If you are a small company, you might tend to buy the same stuff that the big companies buy. This might have a drawback for you, as the vendor might tend to concentrate on delivering value to his bigger revenue sources.) The chapter focusing on the hidden costs and risks of workarounds is also important. The chapter on migration of historical concludes that you might consider to keep the historical data where they are. As this is not always possible, especially in an M&A situation, I would have liked some more information on where the caveats are and how to avoid them. Different vendors indeed developed very different data models, so some theory on the choices in ETRM-modeling are missing. But I guess this falls outside of the scope of this book.The authors have tons of experience in ETRM projects on the vendors side or as external consultants. This makes the book so valuable for the client side. It also counts for the missing fifth star though.What's missing in the book is change. Planning for change is of course a theme in the selection process, but what is adressed there is the planning for foreseeable change. What business changes are you planning, and what will be the consequences. This is wise, of course. But change isn't always planned for. This unplanned change is outside of the scope of vendors and integrators. I'll take one example, and derive a requirement to software systems from it.The example: the european ETS (Emission Trading Scheme). It has never been part of any company strategie do do emissons trading, and i guess no ETRM software was bought with this scheme in scope. Still the EU ETS does affect the actors on the power market. The prices of the emissions affect the power prices, and the generators definitely have to buy or sell certificates to comply with the rules. The certificates are traded.The requirement: if you buy an ETRM system you must think about unplanned change. You must talk with the vendor about your possibilities to adapt the system to sudden changes in your environment. You can not depend on your vendor, as he might run out of business, have too may things to think about, have lost some key resources, or whatever comes in the way, so you must be empowered to do it yourself.A few disruptions more:1) The Enron collapse and the following withdrawal of the US merchants from the european market.2) Hedge accounting.3) Sarbanes Oxley.Please don't underestimate what will change in the course of the years. Your business will change, your currency might change, there will be regulatory changes wth deep impact on your business, key resources will switch their jobs, there might be mergers, acquisitions, splittings or buy outs, and lots of other things you can not even imagine today. So be sure to be in charge. Not only in the implementation phase, but afterwards too. Trim your license in this direction. And if there is an API to the product, that gives you much more flexibility, buy it, no matter what the price is. Your vendor maybe can't afford to tell you, but you will spend much time and money in the further development of your system. And if you can choose between APIs, choose the one where you can find the most resources on the market.

This book is an excellent overview! It provides a high level road map for the entire process. You will still need to use your brain when you execute the entire process. Excellent seller. The book is practically brand new!

The book states the very obvious and is not adding any value. It is in very bad English and it appears that it was never really proof-read. Badly managed attempt to cover up company advertising and charge people for it.

good

I purchased this book back in 2008 as a consultant looking to gain more insight into the ETRM vendor landscape and approaches to selection and implementations. The technology, vendors and industry may have evolved over the 10 years but it's still a good starting point for anyone new to this industry.