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A Managed Services approach to Trading IT Excellence

A ComTechAdvisory Whitepaper

HOW DELTA ENERGY SOLVED THE
PROBLEM
Delta Energy is one company that has solved this problem and gained enormous benefits from its approach
in doing so. When Michel Koornstra became head of Energy Trading at Delta, he inherited a very familiar problem
to many in the industry. The company was using an ETRM solution that was already 6-years old. “We had workarounds on our workarounds,” he says, and that was only a part of the issue. The support requirements on Internal
IT were so high and cumbersome that they didn’t have the luxury of following the ETRM software market. Day-today firefighting activities prevented them from utilizing their time around its ETRM software to properly support the
best in class trading operation that he wanted to build.

With trading volumes rising and the need to meet new regulations in the offing, it was extremely costly and inefficient to
continually hire ETRM system vendor consultants to address
any problems or needed enhancements, while innovation
in line with business strategy was simply impossible. At the
heart of many of their issues was the IT infrastructure with its
poor integration between systems like Zainet, Datagenic for
data management, Trayport, forward curves, as well as the
many exchanges where they executed their trades. Reports
were unreliable, both in terms of accuracy and timeliness, and
traders were more or less forced to maintain personal spreadsheets, as they didn’t trust either the forward curve or other
data. Internal IT lacked the time and on occasion, the very specific ETRM skills required to tackle this issue.
In fact, this is an all too common problem in the world of
commodity trading that few companies have resolved effectively;
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 ack of confidence in their data,
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 eavy use of personal spreadsheets that are neither auditable nor secure,
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 ate and unreliable business critical reports around position, PnL and other time critical management information, and
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 lack of integration between systems, meaning that usage is inconsistent and outputs unreliable.

The speed of change and pace of the business, along with
outside influencers of change like regulations and market evolution, simply add to this complexity.
What Delta Energy did was to seek a partner in the market
that could offer a ‘managed services’ approach to its IT issues;
in essence outsourcing certain aspects of its IT and the business processes – or perhaps as importantly, that critical confluence of business and IT, to an outside service provider for a
defined set of services for a specified cost. That partner was
ETRMServices and the net result was that Delta was able to
create a collaborative approach between the business, ETRMServices, and its internal IT team in a manner that allowed it
to not only regain control over its IT and processes, but to become a best in class trading unit.
The first steps in the process were to get some fundamental improvements in the trading landscape in place. The vast
majority of the trades originating in Trayport, ICE, EPEX and
other exchanges have been fully automated via a STP process
that has improved the quality of deal capture significantly.
They have stabilized the market data management processes and increased the reliability and the timeliness of data.
This has allowed trading reports to be more accurate and on
time. Furthermore, ETRMServices have also redesigned the
key trading reports resulting in major performance improvements and accuracy. This required not only deep technical
knowledge of the trading applications, but also a very good

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