energy trading risk management - Oil & Gas Financial Journal

More documents

Recommendations

Info

advertisement Allegro Trading & Risk Management Systems Optimize your business performance across commodities, business units, and all physical, financial, and logistics assets Allegro is a global provider of energy trading and risk management software for power and gas utilities, refiners, producers, traders, and commodity consumers. The Allegro 8 platform drives profitability and efficiency across front, middle, and back offices, while managing the complex logistics associated with physical commodities such as crude oil, natural gas, refined products and coal. For 27 years, Allegro has been committed to providing advanced architecture, unique development and deployment approaches, and innovative products that closely align with customer business objectives. The company utilizes agile methodologies that allow rapid, industry-focused development and deployment of solutions to meet the needs of the market. Achieve Your Business Objectives With Allegro 8 Allegro software and services help energy companies achieve their most important business objectives: • Improve Position Analysis and Valuation - Make better market decisions with accurate and instantaneous views of positions and valuation • Improve Trader Productivity - Streamline and automate trade processes to reduce the risk and cost of dual-entry and manual processes to allow maximum attention to profitable opportunities • Manage Market Price Exposure - Mitigate exposure to volatile market prices with effective hedging and real-time updates, comprehensive metrics, and simulation • Manage Counterparty Exposure - Mitigate exposure with credit and collateral management, and a flexible credit scoring process • Manage Liquidity Exposure - Manage cash and capital adequacy with efficiency • Achieve Hedge Accounting Compliance - Manage compliance with accuracy and confidence Allegro Delivers Award-Winning Software • Top Ranked as a “Leader” in IDC MarketScape: Worldwide Energy Trading and Risk Management 2011 Vendor Assessment • 2011 Leader’s Quadrant in Gartner report “Magic Quadrant for Energy Trading and Risk Management Platforms” • 2011 Energy Risk Software Survey: #1 in both Ease of Use & Customer Support Headquartered in Dallas, Texas, Allegro has offices in Calgary, Houston, London, Singapore and Zurich, along with a global network of partners. To contact a regional office directly, please call: Europe +44 (0) 22 99 020 North America +1 888 239 6850 Asia Pacific +65 6236 5730 Email info@allegrodev.com www.allegrodev.com
sible for keeping abreast of changing regulatory and compliance requirements. This makes sense – one vendor instead of every energy company. This service comes at the cost of maintenance payments, which are also used to fund enhancements to the system. By this means, the insights and requirements of the client base are reflected in the system. Michael Schwartz notes that “Triple Point’s multi-commodity solution, CXL, is an evolving best practices platform. Clients with deep market expertise request enhancements and modifications. Triple Point responds and, in so doing, the product is continually improved to better fit the markets we serve. Although every client doesn’t request every improvement, everyone gets them. So our clients mutually benefit from each others’ enhancement ideas. The more clients, the more great ideas that wind up in the product.” OpenLink’s Endur fields enhancement requests from 15 of the top 25 energy and commodity trading firms by market capitalization. So, whereas internal development can only reflect the perceived needs of a small group, commercial applications leverage a much wider knowledge base. In addition to maintaining and enhancing the product, vendors also have to provide migration tools to move to new releases and from de-supported to supported technologies. Finally, let’s state the obvious. Commercial software can be implemented quickly. It is thoroughly tested and is cheaper. The economies of scale are undeniable. Reiner Musier notes that “With Allegro’s component based software and agile deployment methods, energy companies can complete focused projects and start realizing value in as little as four months.” In the “choose your poison” category, there is the issue of becoming dependent on the system provider. If you buy, you will be dependent on the vendor. That didn’t work out so well for customers on Contango when Vedaris failed in 2004. But failure among ETRM vendors is a rare occurrence. If you build, you will become hostage to…err, dependent on internal IT resources. There are negatives associated with off-the-shelf ETRM systems. Let’s address them. First of all, even if they’re cheaper than internal development over the lifecycle, licensing, and maintenance is expensive. Second, the software may require extensive customization to fully capture your business practices. This can blur the line between buying and building. You may investigate the business processes that drove the software to its current state and adapt accordingly or you may decide to choose a highly configurable application to support your processes as is. You will find that trying to shoehorn the last 5% of your requirements into the system can be prohibitively expensive. Finally, there is a wide perception that system tweaks are turned around faster on in-house systems. There are
Page 1 and 2: + ENERGY TRADING RISK MANAGEMENT A
Page 3: of aggregation. A single system han
Page 7 and 8: Dodd-Frank compliance forces change
Page 9 and 10: timings outlined below. This view o

energy trading risk management - Oil & Gas Financial Journal

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?