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Elevating Trading Operations Excellence Through Strategic Business Process Design

In today’s rapidly evolving commodity landscape, the quest for trading strategy, precision, and having the right tools at your disposal for efficiency is paramount.  

Whether your organization is in its infancy, grappling with growth challenges or aiming to diversify into new industry sectors, the strategic design and foundation of your business processes are essential. In this blog, we delve into why business process design is your secret weapon in the world of commodity trading and how it can transform your operations. We will also pinpoint when it’s time for a redesign.

Significance of Business Process Design

Business Process Design is the foundation of success in Commodity Trading and Risk Operations. Its importance can be broken down into key principles that strengthen a company’s competitive position in this complex field.

Efficiency

Efficiency reigns supreme in the world of commodity trading and risk operations. The meticulous coordination of processes can mean the difference between profit and loss. With well-designed operations, you'll be able to execute trades with the strategic precision, reducing operational errors, and optimizing every crucial opportunity to enhance profitability.

Risk Management

Risk management is at the core of commodity trading, beating like a steady heart. In this dynamic world of price swings, supply chain hiccups, and global complexities, a robust strategy is essential. A well-crafted business process design blends together thorough risk evaluation, effective risk reduction, and vigilant monitoring, serving as your protective shield to spot and skillfully navigate potential dangers.

Compliance

Compliance forms the bedrock of ethical and legal stability in commodity trading. Diverse regulatory requirements, varying by region and commodity type, demand meticulous adherence. Business process design serves as a compliance compass, guiding your operations through the labyrinth of regulations and ensuring your business avoids the pitfalls of non-compliance, financial penalties, and legal entanglements.

In summary, a well-designed business process seamlessly integrates with existing systems,  and workflows, while also defining how these processes interact with each other. Meticulously crafted processes foster better coordination and synergy across the organization, leading to improved overall efficiency and productivity. Additionally, it enhances visibility, providing near real-time access to information facilitating swift decision-making, and identifying any performance or compliance gaps. 

When to Consider Business Process Redesign

Commodity trading organizations progress through distinct phases in their lifecycle.  We have used CBOLTM as a guiding framework to gauge whether a company is in its early formation and maturity stages or experiencing significant growth, either through organic expansion into new markets or via inorganic means such as acquisitions. In both scenarios, it is imperative for companies to assess and potentially adapt their business processes, albeit for different reasons. 

When a company finds itself in the formation and maturity stages, it often grapples with resource limitations. Consequently, its processes must factor in the expertise gap and the technological challenges inherent in managing complex ETRM systems.

Conversely, in the case of substantial growth, a comprehensive review of business processes becomes essential. This review should aim to establish consistency and scalability across various business segments while accommodating variances that may arise due to differences in commodities traded or the regions in which the company operates.

Navigating the transitions between these stages demands addressing distinct sets of responsibilities, risk variables, and pivotal decisions. Effective management, especially during a period of sustained expansion, is not only crucial but also entails the additional challenge of resource optimization. This is especially pertinent in the current landscape marked by constraints on both capital and human resources.

Strategic Approach to Business Process Design in Commodity Trading: Building for the Future

In the realm of commodity trading risk management, the process of designing business procedures extends beyond merely assessing the current state; it necessitates a keen understanding of the future vision. Your business processes must exhibit the resilience required to seamlessly execute that envisioned future.

Consider, for instance, the case of incorporating a robust risk governance framework into your trading operations as a future imperative. It becomes paramount to integrate these considerations into your current process design efforts. In our approach, we accomplish this by aligning with industry best practices and engaging in in-depth dialogues with pertinent stakeholders. Through this collaborative effort, we pinpoint process gaps and strategically prioritize those aligning with the company’s future vision thereby ensuring long term efficiency, scalability and flexibility in trading operations.

Below is a high level view of our approach to business process design:

01
Assessment

Review and analysis of current state functions

02
Prioritization

Target the processes most amenable to optimization

03
Planning

Interview stakeholders to define process goals

04
Comparison

Confirm current practices to industry best practices

05
Execution

Carry out client approved workflow optimization

06
Future Proof

Plan future-state scalability and functionality

Unlocking Success with Meticulous Business Processes: Building a Strong Foundation

By prioritizing well-crafted processes, commodity trading companies are empowered to secure their competitive edge, enhance scalability, and navigate the ever-evolving landscape. Whether as an organization you are at the inception stage or experiencing rapid growth, it’s essential to recognize that your business processes form the very foundation upon which trading operational excellence is built.

Strategic business process design serves as the key for achieving success, driving efficiency, managing trading risks, and ensuring compliance. It serves as a compass guiding organizations through diverse phases of their lifecycle, adapting to resource constraints or growth challenges.

Strategic business process design serves as the key to success, driving efficiency, managing risks, and ensuring compliance. It is a compass guiding organizations through different phases of their lifecycle, adapting to resource limitations or growth challenges.

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Manual Administrative Processes are Slowing You Down

Slow data and manual processes obscure the data your natural gas enterprise needs to maximize revenues and optimize strategy. Time your traders and schedulers spend entering, transferring, and massaging data is time they cannot devote to locking in profits, mitigating risks, and generating insights. These business processes cause distinct time wasters native to your business.  Here are three common examples.

3 Business Process Bottlenecks Slowing Down Natural Gas Productivity

 This makes it difficult to locate the data that answers key business questions.   

Key Robotic Process Automation Opportunities for Natural Gas

Value Creed applies their specialized CTRM expertise to translate these and other business process bottlenecks into accelerated workflows by leveraging robotic process automation.  This approach allows your business to continue without disruption and increase productivity by taking manual, human-centric processes and streamlining them by using “bots” to perform defined, repetitive tasks.

Natural Gas Business Processes Have Multiple Uses for Robotic Process Automation

Updating pricing and reconciliation
Enter volumes into EBB
Scheduling trades and tracking daily volumes
Cash-out or roll imbalances
Validate scheduling trades
Settling and invoicing
Import & Process schedules from systems & spreadsheets
Automate price uploads
Reconcile external statements to CTRM
Automate credit execption reporting

Ways Robotic Process Automation Accelerates Business Processes​

Supercharge Trade Logistics

RPA alleviates monotonous and potentially costly manual activities by combining the communications, documentation, and reporting process into a single, computerized operations.

Streamline Gas Scheduling

RPA can enter data into all destinations – the CTRM platform, EBB, and spreadsheet – simultaneously, giving all applications and stakeholders the same accurate, current insight into the organization’s positions.

Expedite Actualization and Invoicing

RPA macros can update pipeline route fees and contract terms to ensure the expected, quoted, and invoiced rates match. This is especially helpful in a natural gas environment where the product must be moved among multiple locations, at various rates.

How Robotic Process Automation for Invoice Reconciliation Works

This video shows how automating common business processes accelerates workflow
and improves accuracy

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How to Get Started with Robotic Process Automation

Value Creed’s robotic process automation services streamline business processes, alleviate major data entry bottlenecks, and reduce the time humans spend on low-level, repetitive tasks.

CTRM Process for Identifying RPA Opportunities

You know RPA is not a new concept, it is just now truly useful to CTRM/ETRM business leaders and IT teams.  The use of this advanced technology helps by  expediting complex CTRM business processes, while relieving associated data integrity risks.

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Common Producer Operations Bottlenecks - How To Compete

You only make money when you sell your product to a broker, refinery, or manufacturer. Doesn’t it make sense for your traders and marketers to focus on these activities. Spending time entering data into CTRM platforms and updating spreadsheets leads to incomplete information.

Robotic process automation (RPA) gives front, middle, and back office workers the time to analyze and evaluate market and position data rather than generating and recording it.

Manual Data Processes Creates More Questions Than Answers

Robotic Process Automation Optimizes Producer Operations

Value Creed harnesses RPA to perform routine, repetitive tasks automatically so data gets where it needs to be, without errors, and without manual input that detracts from more valuable activities. Expedited dataflow and instant availability makes downstream applications more efficient and decisions more informed.

Hover on the Orange Icons to Discover RPA Opportunities for Producers

Updating pricing and leases on contracts with 100s of leases
Inputing 1,000s of receipt tickets
Validating 1,000s of receipt tickets
Validating counterparty statements
Settling & Invoicing transactions for 1,000s of wells

3 Ways Robotic Process Automation Accelerates Common Workflows

Product Tracking

Automatically matching receipt and delivery tickets and scheduling transportation for hundreds of transactions per day the instant they are presented and recording them errorlessly without the need for human intervention.

Payment Processing

Scanning of bills of lading to extract data, record it in the CTRM platform and daily logs, link the delivery to the corresponding inventory and order, apply the proper terms and prices, generate the invoice, and record payment.

Contract Management

Review, data extraction, and automatic form population from a variety of document styles and formats, including .pdf, email text, hard copies, scanned images, and electronic downloads.

How Robotic Process Automation for Invoice Reconciliation Works

Watch the video to see how RPA accelerates workflow and improves accuracy

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Get Started with Value Creed RPA:

Value Creed has established the processes and assembled the experts who can build the RPA management system that suits your organization and business model. Our team will engineer a program that delivers institutional control, operational excellence, and replicable profitability.

Our Process for Identifying RPA Opportunities in CTRM

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The logistics module in CTRM systems is one of the best areas for Robotic Process Automation applications because the processes are structured and well-defined, performed multiple times a day, and use the same views. RPA will increase efficiency and data consistency while eliminating manual data entry errors.

Watch this brief video to learn about how the process is performed and see how we used three RPA bots to automate the entire logistics process.

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#3: Insightful Data-Driven CTRM Vendor Selection Approach Facilitates Run-Operate Success

If you have read the first installment of our blog series on CTRM software selection, you are aware of the time consuming tasks and potential pitfalls involved when choosing a vendor on your own. And if you read part 2, you know what to look for when seeking a team to alleviate the burden and risks associated with a project of this magnitude.

Now, in our third post, you will learn how Value Creed and Sendero intertwine their comprehensive vetting and selection processes to help you select the vendor that is right for your organization. 

By engaging this team, your vendor selection process will leverage a unique, multi-step process as follows:

  1. Gather Intelligence – We define and enforce inclusive business unit involvement across the organization to ensure all stakeholders’ desires are heard. Staff interviews, executive strategy, and a vendor-agnostic approach ensures a bias-free selection.
  2. Define & Prioritize User Requirement with Insight of CTRM/ETRM Expertise – Armed with deep CTRM/ETRM hands-on expertise and industry domain knowledge, we construct a requirement model customized to your specific demands, operational workflows, cross-functional use cases, and overall program management goals.
  3. Insider’s Assessment of “Off-The Shelf Functionality” – It is rare when a CTRM/ETRM platform solves every stakeholder’s requirement “out-of-the-box.”  We align user requirements and technical considerations with each platform’s inherent capabilities and identify gaps where customizations will be required.
  4. Mapping Business Process Alignment – Alignment of existing business processes to the CTRM/ETRM platform is paramount. To choose the best-fit platform, existing business processes, back office, middle office and front office processes are assessed and compared among platforms.  Our management consulting assessment approach combined with our deep ETRM/CTRM experience ensures you have foresight into the  solution most closely aligned with your business goals. 
  5. Reach Consensus – Our comprehensive evaluation uses proven methods for vetting vendors and uncovering critical details involving cost of ownership and operation, potential productivity disruptions, learning curves, and more

Dive Deeper Into This Multifaceted Approach 

Sendero takes the time to uncover the drivers behind your firm’s trading challenges and opportunities, delving deep into your business philosophy to determine which software features will best get you where you want to go by involving executives, management, and front-line users through every stage, in every decision, while providing a structured methodology that allows you to balance your day-to-day asks with the selection.

Value Creed employs teams of experts fluent in CTRM, transaction flow, and contract structure. We understand how your software platform will influence the speed, efficiency, and profitability of every trade you make. Backed by hundreds of software implementation projects and millions of people-hours monitoring operations and reports, Value Creed ensures the software and vendor you engage will meet your needs now and in the future. As a managed service provider (MSP) our experience delivering on-demand 24-hour responsiveness by technical teams located both in the U.S. and India. Our dual time zone model gives Value Creed clients the functionality they need to thrive. 

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