Wishful Thinking is an attitude or belief that something you want to happen will happen even though it is not likely or possible instead of by appealing to evidence, rationality, or reality.
Not Invented Here (NIH) is a state of mind or philosophy that stems from a belief that in-house systems are inherently more suited to one’s organization than third party solutions. This results in a tendency to attempt to “reinvent the C/ETRM wheel.”
An age-old conundrum
While attempting to stay afloat in the relentlessly volatile commodities and energy trading industries, firms now also face increasingly complex rules and regulations. A recent Energy Risk study polling 282 industry participants found that 23.8% of respondents view complying with these regulations as the biggest challenge their IT/systems has faced in the last 12 months.
In order to continue making money while also ensuring regulatory compliance, many firms are setting their sights on new or enhanced C/ETRM solutions. While C/ETRM systems have been commercially available for over a decade, firms still often find themselves entangled in an age-old, paralyzing conundrum:
To build or not build in-house?
To build or not to build in-house?
The drive to either build or continue to develop an C/ETRM system in-house typically stems from both financial and temporal limitations. Firms aim to leverage already-paid-for resources by tasking their accomplished spreadsheet experts and/or IT department with the development of an ETRM system. This route is especially tempting to firms whose processes may require extensive software customization—a factor that has the potential to exponentially raise the cost of a given commercial system.
The issue many organizations encounter during this in-house development process, however, is that they underestimate the level of effort and expertise required to successfully develop an effective C/ETRM product. For organizations that lack a core competency in software development, this effort to save money by building an in-house system ends up only costing them more.
Many also overlook the fact that after a system is successfully created and implemented, the need for routine maintenance, configuration and system upgrades still remains. Executives need to truly contemplate whether or not this is the best use of their organization’s vital resources.
Outsourcing the implementation of an C/ETRM system to 3rd party vendors saves many organizations time, money and sanity. Leveraging extensive development and subject matter expertise, commercially available C/ETRM solutions deliver scalable solutions where time-to-market and time-to-value always win. Market-proven front-to-back office functionality provides full lifecycle support and unparalleled organizational transparency.
The result is optimal data analysis and reporting as well as superior decision-making capabilities. Furthermore, highly configurable, modular commercial software products that support plug-ins accelerate both implementation and delivery times, resulting in a lower total product cost.
Lastly, by purchasing a commercially available C/ETRM solution, organizations also invest in continued software maintenance and support. They also inherit access to future upgrades that reflect market trends, new regulatory requirements and insight from a large client base, not just the perceived needs of a small group.
Whether you’re professionalizing your firm’s systems and processes or searching for a total lower cost of ownership solution, a proven, commercially available C/ETRM system will protect you from an attempt to reinvent the C/ETRM wheel. Next-generation systems go beyond capturing an accurate, holistic view of current and past business processes: They also evolve with them for years to come.
C/ETRM system architecture that is formula-driven and template-based is highly configurable, ultimately resulting in a product that is tailored specifically to your firm’s unique needs and processes. This fact alone drastically reduces both project risks and time-to-deliver. And should you want to keep your head in the clouds; the next-generation C/ETRM systems can be delivered there, too.
About Pioneer Solutions
Pioneer Solutions is a global provider of next generation CTRM, ETRM, environmental management and financial and regulatory compliance solutions. Offering the latest in business processing capabilities with a modern data structure, Pioneer’s products offer the user a configurable environment that allows for customizable templates for STP workflow and user-defined custom formula entry. Serving some of the largest utilities and energy companies across the globe, Pioneer’s flexible solutions are designed for rapid deployment and easily adapt to clients’ unique business processes, model complex trading scenarios and automate business processes.