Are You Giving Your Back-Office the Attention it Deserves?

by Lucido Group

Our customers are leaders in the Energy industry who have been consistently successful in dealing with massive industry changes while still expanding their operational reach, reducing risk and increasing profits. It is impressive! And yet…looking inside the back-office operations of these same organizations, their issues can be eerily similar to those found, say, ten years prior. Many are still heavily dependent on silent ‘super stars’ that multitask and get endless lists of things done each day. These critical staffers are experts on where to find specific data, who to contact, what to do in case of exceptions or errors, and how to solve issues before they become problems. Many organizations recognize that there is a problem with the workload and stress on staff, but it is not immediately obvious how to effectively remedy a situation that has gone on for so long.

Drawing from experiences in implementations that we have seen to be most successful, Lucido believes a number of key factors exist that will greatly enhance the value of investing in operations in your back-office and increasing the likelihood of success. It is easy to see this as a case of “if it ain’t broke, don’t fix it” but fixing it in emergency mode is truly brutal. If the above describes your organization, it is already broken so let’s fix it!

Why do large and very costly ETRM implementation programs not solve these issues?

Large scale ETRM implementations typically start by pairing the delivery of a large program with a set of well-defined objectives that are translated into design guidelines. However these implementations are notoriously complex, and when customers start realizing how ambitious these objectives really are, the program tends to change. The focus can easily shift to the delivery of big, interdependent functional areas of scope that can be handed over and brought live for the business successfully. In the process, design guidelines and some objectives are given a lower priority or are even dropped altogether.

Depending on the size of the project, these decisions may multiply and, not surprisingly, back-office operations is frequently the first to suffer. This is not surprising! Back-office is considered a supporting function, with other company operations deemed to contribute more to efficiency, revenue or the business brand. In our experience, it is quite common for organizations to end an ETRM project with a nearly fully automated deal capture process but back-office operations nearly ‘like for like’ from whence they started.

Are there any samples of programs that have worked?

The Lucido team has been involved in many projects that resulted in achievement of operational excellence goals. As an example, below are two recent projects in which the process of trade confirmation was radically improved for customers. We see a number of critical factors that made these projects successful and helped avoid common mistakes.

  • The projects started with a clear mission: to simplify and automate trade confirmation. The scope of work was limited to a single domain and user group allowing for no renegotiation of scope or compromise of design guidelines at the expense of the initial users.
  • Choosing the full development of the Equias ECM and ICE eConfirm interfaces as the initial delivery scope represented clear target for the projects and value to the business.
  • Back-office operations tend to be full of quick fix integrations where systems and data are tied together to help users solve a specific operational task and, if multiple developers have been involved over time, this results in very fragmented solutions that are difficult to maintain. The standardization in process flow and, especially the common data model in the Equias and ICE eConfirm solutions, created a solid foundation under any future technical
  • Beyond the initial scope, there existed a long list of special cases that needed to be handled. The Lucido team helped complete the library and, leveraging the inherited analysis and industry case standardization, created repeatability in any further development. The end result was a 100% coverage of any known confirmation document with maximum reduction of human repetitive tasks in the process.
  • An additional semi-automated confirmation process was found using e-mails with structured data in an attachment. It was decided to include this mechanism in the scope of work because of the shared usage of data and to improve the auditability. By making the process output visible to the confirmations team it became clear that many operational issues had occurred over time that had only partially been recognized and fixed.
  • The end result of this work was that the confirmations team, perhaps for the first time, had full visibility of any trade confirmation and its status. The ability to more easily identify errors, mismatches, etc. that might require human intervention was the biggest win of the project for the client.
  • After several months of working with the new process, management asked for a report on the number of confirmations that had successfully been processed. Metrics showed that less than 2% of the confirmations still required some form of human intervention, mainly due to issues outside of the confirmations process itself.

Little things make big things happen!

The Lucido Energy Solutions team has decades of experience working with ETRM systems and our consultants share a unique set of skills. Combining these on your projects will make a difference. We love making things better and are always on the lookout for how we can apply technology to do that. We look forward to solving challenges in your back-office!