While the details are still emerging, this is clearly a significant market move by Brady and one that greatly strengthens their postion in energy CTRM.  We’ll be speaking with Gavin Lavelle, CEO of Brady later in the day and will bring additional details as they become available.

Patrick Reames, Managing Director

Service providers and system integrators are a vital part of the CTRM landscape, providing unique skills or supplementing resources for companies that are working to improve their CTRM system capabilities. In fact, a recent CommodityPoint study, Consultants and Systems Integrators in Trading and Risk Management, notes that about 80% of the companies utilizing commercial CTRM systems have employed the services of one or more of these consulting organizations.

The companies that provide these services around CTRM software can be generally described as one of four types of providers:

1. Global well-known firms (including what is known as “The Big 4″) for which E/CTRM is but a component of their overall business
2. Relatively large firms that employ one hundred or more consultants and specialize in few markets, such as E/CTRM and Financials
3. Firms who service a local market only, employing a few dozen or less consultants and who specialize in a particular industry (in this case E/CTRM)
4. Boutique specialist firms, who employ few consultants, but have specific capabilities in some aspect of E/CTRM, such as risk management.

Additionally, not all of the larger Service Provider firms have capabilities (practices) around CTRM software in all geographies or locations, or they may focus in on particular aspects of Trading & Risk Management such as business consulting, strategy consulting or software selection.

capSpire, founded in early 2009 and with clients in the US and Europe, is blazing a bit of a different trail in this industry. While they had been essentially a boutique consulting firm, they have recently begun pursuing a growth strategy that leverages their deep domain knowledge around specific CTRM solutions, such as Solarc’s RightAngle product, and coupling those skills with leading edge technical resources in order to create an organization that is capable of providing unique solutions to difficult business issues. As Lance Laubach, capSpires CEO notes, “We’re always looking ways to improve our value proposition to our customers and differentiate ourselves from the competition. You can’t do that by merely providing an hour’s effort for an hour’s wage – you have to look for ways to utilize technology as a lever with which to create multiples of return for that hour’s effort.”

Having seen solid success with this model, the company has been filling their growing staffing need through the recruitment of highly experienced industry veterans and new university graduates that possess unique technical skills. The combination of resources enables capSpire to:

• Deliver expert level consulting support for industry standard CTRM applications
• Mentor and train new resources in the company’s methodologies
• Create high value, blended teams capable of consulting around industry specific issues, yet also able to deliver leading edge technical solutions at a cost below the industry average.

As Jeff Hardcastle, capSpire co-founder puts it, “We invest considerable time and resources in the area of recruiting and employee development. We have a very strict discipline on the skillsets we recruit and have grown very effective at identifying those traits, especially in college hires. All of our new hires, including those from the universities, undergo a comprehensive three month program of education in our methodologies, the CTRM market as a whole, and our unique technical “toolbox” that we’ve developed around our CTRM practice that allows us to provide holistic “engineering quality” solutions that contrast stereotypical consulting methodologies.”

The “toolbox” that Mr. Hardcastle references is being leveraged as the company has also been purposefully evolving from a “pure” consulting business to one that is more of a full service CTRM company – that is an organization that provides both services and products that support, but are essentially agnostic, to the underlying CTRM product(s). capSpire has taken a few of the technical solutions within that “toolbox” and are evolving those into products that can create significant value and accelerate the delivery of solutions to complex business issues.

Their first such product offering, Gravitate, is a CTRM “portal” and is currently in use by wholesale petroleum marketers, providing a valued added service to their customers. This newly delivered product enables a marketer’s customers to access their information contained within the marketer’s CTRM system, such as prices, trade performance, and invoices. The system, via the use of its own data structures, is independent of the underlying CTRM software, yet has been designed to easily integrate with all leading products, providing a highly configurable platform for web-enabling those products.

According to Mike Scharf, the other capSpire co-founder, “We recognize traditional consulting is all about reinventing the wheel on each project. Our approach is recognition that for most clients, they don’t need a new wheel; they need a services partner who can quickly provide them with the solutions they need coupled with the reassurance of an “always available” partnership. The Gravitate CTRM Portal is just another example of our own innovation and investment in creating solutions that don’t require our clients to reinvent the wheel.”

capSpire has been able to create a bit of a unique animal in this market. Their deep domain knowledge and roster of talented people and specialized technical solutions has enabled them to grow quickly and has provided a solid base of referential customers. Their challenge will be in maintaining what for some has proven a difficult balance between growing rapidly and maintaining a consistently high quality of service on the consulting side. capSpire’s recruiting and training model, combined with their ability to leverage proprietary technical solutions would seem to position them well for meeting that challenge.

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So, we would really appreciate hearing your opinions about, and experiences with, the various products and vendors that support energy and commodity trading activities around the globe.  The short electronic survey won’t take you long to complete and the final report will be freely available for you to check how your views match up with others.

To begin taking our survey, please click on the following link:

www.utilipoint.com/2/2011_CTRM_VPS_TY.

We do ask that you enter your name and contact details to help us validate your response. All replies are confidential.

Note: Responses from persons employed by, or associated with E/CTRM software vendors will NOT be considered.

I don’t want to overstate my case, because we clearly have seen some technology advancement in this space over the last decade, including incremental improvements in areas such as processing speeds and to some extent, usability. Still, CTRM systems continue to look a lot they did, and user continue to interact with them very much in the same manner as they did, more than 10 years ago.

Is it possible or even practical to bring some of these consumer oriented technologies into the CTRM space?  Is there a business case for technological innovation in CTRM? Can we improve the ways deals are discovered, consummated, recorded, managed and accounted for, and in the process improve trading margins and reduce costs?

Can we improve the human machine interface (HMI) to a point where users don’t have to use mice to press a drop down selection box or use a keyboard to type data into a form on a LCD screen?  Can we leverage the technologies that underlay “massively multi-player on-line game” platforms to create better, more interactive marketplaces for commodity trading?  Can we utilize the experiences and technologies that underlay social media sites like Facebook to create virtual business environments in which not only deals, but other forms of information exchange, such as confirmations, invoices and payments flow seamlessly between and amongst counterparties?  Can we move the yet unfulfilled promise of mobile computing into CTRM and truly untether traders and trading support personnel from their desks and trading floors?  Can the “cloud” be useful in distributing applications and workloads to truly virtualize trading floors and improve collaboration across geographies, markets, and cultures?

It’s not only a question of what can technology do to improve the business of CTRM, it’s also a question of what is needed from technology suppliers to meet emerging needs in this industry over the next decade and whether innovation can better meet those needs rather than just a continuing evolution of the same basic tools.

We’re inviting market participants to express their views on these questions and more during CommodityPoint’s 2012 CTRM Technical Conferences. Our first event will be held in London in May and our second will be in Houston in July (yes, July in Houston…and yes, we know about the heat.  Don’t worry, we will have air conditioning).  We’re starting to flesh out the agendas for those events and we’re inviting the users of CTRM products to be speakers.  If you’re a user of the technologies of CTRM, we’d like to hear your ideas (as a presenter at one of our events) about what’s needed to meet the emerging business and regulatory requirements of this market and/or what can the technology providers, service companies, and even your peers, do in the area of helping to bring real innovation to this market over the next decade.

So again, if you’re interested in sharing your thoughts and ideas as a speaker at either our London or Houston event, please feel free to contact either Mark Tredway or myself for more information.  For more information about the CTRM Technical Conference Series, you can visit the events website here.

The University of Houston’s Bauer School of Business launched their ETRM Systems course in the spring of 2010 with 18 students. Since that time, the program, founded and still lead by industry veteran Ed Bell, has grown steadily and has attracted considerable attention both on and off campus. According to Mr. Bell, “We’ve been pleased and gratified with the success of the program. We’ve seen significant and consistent growth in enrollment each semester, growing from 18 students in our inaugural semester, to 50 the next, then 70, and now more than 100 in this just concluded class.” He further noted that the spring 2012 semester currently stands at 10 MBAs and 121 undergrads, with a couple of weeks left for enrollment.

“Of course it’s gratifying to see the excitement within the school for our program; however, I believe the truest measure of our success is the increasing value of the course in helping our students find careers in their chosen fields.” In this area, he points to success in developing relationships with many of the CTRM/ETRM product vendors, consulting companies and major energy firms. “We’ve been very happy that we’ve been able to develop terrific relations with industry as a result of this course offering. These relationships have given our students the opportunity to interact with leading technology firms and energy companies during their time in this class, interactions that have resulted in job offers and new careers for many of our students.”

This senior/grad level course, MIS 4397/7397 in the university catalog, provides students a fundamental understanding of the functionality and complexities of the systems used for managing physical energy trading in the North American markets and, by extension, a good understanding of the industry those systems reflect. The students get hands on experience in using ETRM software, the GasPro system which has been donated and supported by Data Management Solutions and their president, Frank Pena. Using that system, they get exposed to critical processes such as contract management, deal capture, natural gas nominations and scheduling, and accounting. Additionally, they gain insight into the methodologies and issues related to selecting and implementing complex supply chain and trade management solutions (in fact the course utilizes one of CommodityPoint’s books, “Selecting and Implementing Energy Trading, Transaction and Risk Management Software“ as part of their course materials).

Building on Success

As the program has grown and has continuously pushed the school and faculty to meet demand, Mr. Bell has continuously worked to build capacity, both in technology and teaching staff. The school is recruiting more teaching resources with appropriate/relevant experience, and has hired two additional adjunct faculty with energy IT experience, specifically in the area of configuring and installing ETRM systems. These new resources will provide additional teaching depth under Mr. Bell’s guidance and will help in establishing classes beyond the current course, which is a general introduction to the industry.

Additionally, Mr. Bell is in the early stages of planning a series of courses of interest to technologists— including topics such as pipeline and utility systems for gas management, reporting and compliance issues in energy—especially in light of Dodd-Frank; and the technical side of finance and accounting as it applies to energy operations. “Presently, we are looking at the success we’ve had with a straightforward introductory course and thinking ‘what should be next in a sequence of courses that will further build a credible and respected course of the study that prepares students go to work in the industry?’”

“If I were to summarize our goals for the future of this program, they would be fourfold: 1) continuously improve our ability to deliver a world class educational experience in the area of energy trading technologies, 2) continue to grow and deepen our relationships with industry, including both the leading providers and consumers of these critical technologies, 3) continue to place students in good paying, stable and solid careers, and 4) establish capacity for true energy related research,” said Mr. Bell. In the area of research, he notes the following areas for potential focus: infrastructure planning, critical infrastructure maintenance and security, high-performance computing in energy, cloud based computing and transitional issues, and market data and other related ancillary systems requirements.

Another area of interest for Mr. Bell is to move the course outside of the classroom. “One thing I definitely want to work on is packaging our capabilities to deliver our courses online. I believe we can reach a much larger audience and leverage our time and presence in Houston if we do so. The University of Houston already offers a number of online courses and I think it’s inevitable that we move that direction.”

This course is providing a win-win for both the students and industry— energy trading and marketing firms, along with vendors and service providers, are able to bring on board new employees that have significant exposure to, and understanding of, the critical IT architectures of the industry; and new graduates of the program find intellectually rewarding and well paying careers.

We at CommodityPoint are committed to supporting this valuable program and we encourage other industry participants to do the same.

Several years ago, as some of you many remember, a company called YellowJacket made progress in transforming IM into a somewhat effective trading environment, though only for weather derivatives.  Despite the limited reach of their platform, it was enough to catch the attention of ICE, who subsequently bought up the technology, preventing its expansion into the energy commodity space and potentially limiting any loss of liquidity from their exchange should YellowJacket have been successful at expanding their functional footprint and transforming their product into a one-to-many deal making (and deal capture) application.

Since that time, there have others who have carried on with the concept, though none have yet brought forth a commercial product for capturing any part of the IM trading conversation…until now.  Allegro just announced that they are releasing what they call Trade Connect 8.1, which they describe as “…(a) component (that) automates the import of intraday pricing, simplifies and translates instant message (IM) trade commitments, and helps your trading organization better leverage market and trading information. Trade Connect transforms unstructured instant message trading chats into structured OTC market and trade data. It also enables brokers’ intraday bid/offer price quotes to be used in analyzing current market trends against a trader’s current portfolio. As instant messages are received, the Allegro system reads those messages, parses the data into readable elements, and records the information on the Allegro system’s intraday price board. In addition to the data received via instant messaging, all incoming data from external price feeds are recorded in the Allegro price value table.”

Interesting stuff.  Allegro has partnered with a company called Pivot Inc. and is leveraging their Pivot 360 technology platform that was developed for the financial markets.  Though the initial development for Trade Connect is clearly pointed toward capturing and communicating IM trade and price data across a trading floor (a valuable capability to be sure), the technology and the business potential that’s involved in fully leveraging the energy trading markets’ use of IM could combine to bring to forth some very compelling capabilities in the near future.

This is certainly a product that is worth watching…and we will.

Thank goodness my dating days are long past – this analogy is bringing up some very painful memories…

I was initially willing to overlook the Fire’s crappy touch screen, thinking that I would find a way to work around its lack of granularity which causes any touch to a link on webpage to be a virtual crap shoot as to whether 1) there would actually be a sensor on the screen that could hit the embedded link on the webpage and 2) if there was no other link embedded close to the target that would be activated instead, sending you off to the website’s legal disclaimer page.  I’ve tried using the reverse pinch to increase the size of the area that I was targeting with my apparently overly fat fingers in order to increase the chance of success of actually navigating around the website.  Unfortunately, the seemingly random functionality of the Fire means that the pinching motion will work maybe 1 in 5 times.  The other 80% of the time, it just ignores you and, occasionally just to aggravate you more, might just shut itself off if it decides it didn’t like your fingers’ “tone” as your pound away with the flicking motion, hoping that somehow the next flick will be the one that actually works.  All in all, the web browser, supposedly a revolution in terms of its use of the “cloud” and advertised as being more speedy, is in fact almost worthless – its slow, unresponsive and prone to randomly mocking you as you attempt to surf the web.  Even on Amazon.com, trying to navigate is a lethal mix of frustration and aggravation, combined with an absolute disbelief that this usually forward thinking company could have produced such a hideous product.

Other reviewers have pointed out the Fire’s short battery life, lack of volume control, poorly implemented security, crappy UI, and weak wifi (though some have tried to dismiss those issues as being a result of its relatively cheap price…as if the doomed romance could be salvaged for no other reason than your new “girlfriend” likes eating off the dollar menu at McDonald’s every night).  And while I could go on and on about my own personal take on its various short-comings,  frankly, just like that five date relationship that ended with the phrase, “would you please just leave me alone!!”, I’ve had enough and I just want to be done with it.