Many established upstream, midstream, and downstream oil and gas companies were early adopters of both ERP and ETRM technology, and their investment in implementation projects was foundational in driving the early growth of the software segment. Software vendors built comprehensive solutions, like RightAngle, that support the full hydrocarbon origination-to-settlement transaction lifecycle and provide for associated accounting, tax, and other niche industry-specific use cases. At the time, these software applications were built on leading technology platforms. Time and technology marched inexorably on and the pressure to support and enhance the core product with new features and functions was naturally in competition with backend modernization for scarce product management, development, and testing resources. For many solution providers, that underlying technology started to show its age and customers clamored for modernization to improve reliability, enhance security, improve performance, and streamline support.
Most of the major ETRM vendors rose to the challenge and overhauled their architectures to meet customer demands and laid a foundation for future growth, embraced the cloud, provided for enhanced analytics, and prepared for the rise of artificial intelligence (AI). However, despite the large installed base and the fact that these new versions have been available in the marketplace for some time, comparatively few upgrades have been completed to date. Many have sizeable investments in their existing ETRM ecosystem that provide them with incremental advantages for making upgrades the most logical path forward.
One of the most widely implemented ETRM systems for energy companies active in trading, logistics, and marketing bulk liquids like oil, refined products, and renewable or biofuels is RightAngle, so it represents a useful example of the types of challenges and opportunities that can come with a major ETRM upgrade project. The latest releases of version S20 and higher constitute a step-change in the technical platform itself. There are some notable functional improvements as well that can be unlocked as clients upgrade. Given the fundamental changes to the toolset itself, there are five key areas of focus when contemplating, planning, and executing an upgrade.
Big system upgrades, in general, aren’t without inherent challenges and a move to RightAngle S20 or similar ETRM upgrade is no different. The minor tweaks and improvements to the tool are almost innumerable but there are a handful of instances where the technology change is substantial enough that significant rework of existing solution components is likely required to prevent feature regression, and these can derail a project if not accounted for upfront. Note that specifics can vary depending on the prior version being upgraded.
While upgrades can be time-consuming, expensive, and come with a host of challenges like those listed above, they also present some potentially tantalizing opportunities. In many cases, the opportunities are obviously new pieces of functionality (e.g., RightAngle’s new Inventory Work Bench), but many are buried under the challenges themselves and must be unearthed. Below are two such examples:
Energy companies faced with the prospect of a strategic ETRM upgrade opportunity can benefit from the early lessons learned through implementations and migrations to RightAngle S20 (or newer). These kinds of significant systems projects represent relatively rare instances to take a step back and evaluate the relationship between the company’s business model and processes versus the existing functional footprint of the trading and risk solution environment. In addition, a careful assessment of instances where a move to stronger digital trading and logistics capabilities may help build a benefits case for the capital investment necessary to complete an upgrade.
An upgrade to an existing ETRM system may not represent the optimal value proposition for all customers and many are taking steps towards a more postmodern ETRM solution architecture as an alternative.
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