Implementing New ETRM Software? How to Increase ROI and Speed Up Time to Value

December 18, 2023 498

By Tamasin Ford, COO, Molecule

As you plan for an energy trading risk management (ETRM) software implementation, there’s probably quite a bit that you’re thinking about – such as data, integrations, valuations, and reporting. But don’t forget to plan just as much for how you’ll manage change within the organization so you can get the most from your investment in the least amount of time!

Migrating to new enterprise software can be an arduous process, especially if it's something as major as ETRM software.

A headache-free implementation might seem hard to believe, especially considering how outdated, monolithic systems have given ETRM implementations a bad rap in the industry. Sure, the efficiency and timeline of a new ETRM implementation depends largely on the vendor you choose; however, your team also plays no small part in controlling how smoothly the process goes.

Change isn’t always easy, and it’s certainly inevitable with a major software implementation. Read on to find a complete overview of how to get your team running in the same direction so your ETRM implementation runs as efficiently as possible – including essential change management strategies you can employ in preparation for your next ETRM software implementation. We'll even include free downloadable templates you can use.

What Role Does Successful Change Management Play in ETRM Software Implementation?

First, let's explore why change management is essential when implementing new ETRM software.

Imagine you and your vendor get in a car to drive to ETRM City together. You have GPS and snacks, traffic is light, and the weather is clear. Easy trip, right?

Now imagine that it’s actually a van you’re driving, and in the back are ten of your friends. They aren’t sure they want to go to ETRM City, so they complain and ask to switch off the GPS to listen to music. One wants to stop at every rest station and takes forever to get back in the van. Another tries to backseat drive until you can’t stand it, and one of them is a joker who even tries to grab the wheel. Not so easy now!

Change management is all about convincing your team to come along on the journey willingly and collaboratively. It’s about preparing them to pull through the hard parts and getting them excited about the final destination. It’s making sure that each team member understands the why, the value, and how they personally – along with everyone else – will benefit.

Here are some benefits of implementing an effective change management strategy:

Increases the ROI of your new software (however you define it) as more team members gain value from using it
Speeds up the time it takes for your team to begin using and deriving value from the new ETRM solution
Supports and empowers the internal teams impacted by the software change
Promotes growth and innovation across your company

Change management is critical to making the transition to a new software system effective and valuable for your company.

What are the Consequences of Not Implementing a Change Management Strategy with New ETRM Software?

In contrast, neglecting to have a plan for change management can harm your team's workflows and productivity as you transition to new software.

Slows You Down

While your vendor works to get your software up and running as quickly as possible, a lack of change management planning will slow you down or even derail the whole project. It’s like the friend in the back of the van who thinks they’re doing everyone a favor by asking for hourly rest stops – until you end up on the road until midnight to get to your destination. Without a change management strategy, you could end up with a lot of stops and starts on the project, as you run into pockets of resistance or teams that were not informed early enough to be prepared.

Low Enthusiasm

Change management’s end goal is user adoption. Conversely, if internal teams don't understand the new software, why it was purchased in the first place, and how it benefits them, they will be reluctant to use it. You may see team members avoiding training, using deadlines as an excuse to “just do it the old way one more time,” constantly losing their passwords, and generally putting up barriers.

Gaps or Uneven Adoption

Since most ETRMs offer front-to-back-office functionality, multiple teams typically use them in tandem. However, if not all teams are on board with the new system, the data flows and newly efficient processes may hit stumbling blocks or simply not operate at all. Without your full team aligned, you won't be getting the most out of your new system, and it won’t be nearly as valuable to your company.

Step 1: Identify Business Objectives and Processes – and Who They Impact

Your business goals and objectives should be clear throughout the purchase and implementation process. Ultimately, the ETRM system implementation is a tool to achieve these and not the end in itself.

Still in the buying process? Assess and evaluate how well different solutions meet your business goals, need-to-haves, and nice-to-haves with our ETRM Purchase Process spreadsheet.

You will have to go through an extensive process of identifying each of your current business processes and workflows.

For example, you may have end-of-day risk reports which need to be created and sent out. Some of the analysis might include:

How are reports currently prepared? What is labor-intensive or error-prone in the current process?
How are reports consumed? What would the end users like to see differently?
What internal risk policies and expectations are the reports complying with? How are those expected to evolve?

All of this feeds into your project plan and forms the business and technical requirements.

But at each step, you will also want to take an extra moment to think about it from a change management perspective. In the example above, each of the bullets represents one or more stakeholders that will need to be engaged. The report creator, receiver, and risk committee are just three examples of people or groups in your organization who will need to buy into the new ETRM along the way.

Remember to think broadly about who your stakeholders are at this stage. Although the bulk of an ETRM's capabilities lie in middle-office reports and analytics, ETRMs also offer front-office features for traders and back-office functions for your finance and accounting teams. And don’t forget about your IT, security, and compliance teams, as well.

By identifying stakeholders up front, you can start thinking about how those stakeholders will be affected by the new ETRM system and what their needs and concerns might be.

Step 2. Engage Stakeholders in the Planning

With your stakeholders identified, you can now reach out to them to discuss their needs and concerns as you build and refine the project plan.

It will be critical during this step to set and balance expectations with both internal stakeholders and your implementation team. In our experience, the process can be delayed or completely derailed when there isn’t sufficient alignment on timeline and deliverables. Share the project plan and invite input early, then incorporate feedback to get to the most relevant and realistic approach.

This is also the time to start communicating the value and business case for bringing in a new ETRM. The biggest opponent to a new ETRM is the status quo, so be prepared to discuss the benefits of making this change from each group’s perspective. One may care about new capabilities, and another may care about security, so tailoring your messages is key.

At this point, you likely have a vendor selected and involved in the process. Be sure to bring them in to meet and understand your stakeholders so that they can support you in this.

Download our free ETRM implementation checklist to easily document the business objectives and operations of the internal roles affected by the software change.

Step 3: Show Value Early and Build Momentum

With a plan in place, it’s time to start executing. This is a challenging stage but also the most exciting one as the new system starts to come alive.

Team members directly involved in the implementation will have a chance to provide input and guidance in regular meetings and then review data and outputs in the system. Your project manager and the vendor’s PM can work together to plan a path and check off tasks each week. Seeing progress on a weekly basis is the best way to get people confident that the implementation is on track to succeed.

Work diligently to remove roadblocks and have each team member deliver their data or reviews in a timely manner. And then look for the first win – usually a core report such as a position report.

At this stage, your main goal is to use thorough testing to surface issues now while there is time to address them. The biggest change management risk here is someone who doesn’t try the system out or doesn’t share their concerns. Push your team to actually use the system as soon as possible and set up training for them if they don’t feel comfortable figuring it all out on their own.

Step 4: Document and Train

As you move closer to the launch of your new ETRM software, you’ll want to start preparing all the stakeholder groups, especially those who were less involved in the project. Refer to the internal operations you documented and start informing people if the processes will be affected.

You can use a variety of communication tools to prepare your team members before and during the rollout, depending on their preferences and your organization’s culture.

This may include:

Live training
Recorded training
Detailed documentation of your processes
Short “cheat sheets” for ready reference
Internal super users who others can ask for help

These resources should be available in a central location where everyone can find them. You may want to tell people a few times where that is so they get into the habit of looking there.

No matter what resources are used for training, be sure to focus on:

Core tasks – making sure users are able to get their work done in the system
Efficiency – finding the smoothest and fastest path through the work
Secondary benefits – extras and cool features that may increase buy-in

We also suggest that someone actively monitor the core users during this period for any issues, questions, or avoidance of using the system. While these can be challenging to address, earlier is always better.

The Golden Rule of Change Management: Communicate, Communicate, Communicate!

In every one of these steps, remember that change management is about reaching people and convincing them to support a project. That means that you must be talking to them actively and often throughout the process.

The main forms of communication that will help you are:

Educational – teach your stakeholders so they can understand and evaluate the change for themselves. From explaining at the very start what you intend to do, all the way to post-implementation training, make sure they have the information they will need to support the project.
Persuasive – don’t be afraid to make the case for change. Tell the stakeholders about the benefits to them, their colleagues, and the whole company. Share success stories from peer companies who have done this journey. Ask them for their support and buy-in.
Listening – give opportunities for feedback and input. Your team members are good at their jobs and will be able to highlight key needs or risks along the way – making the implementation better all around.

Here's to a smooth ETRM purchase and implementation process! Remember, clarity, collaboration, and preparation are your best allies in this journey.

Check out Molecule’s recent case study to see how ETRM vendors should foster a smooth, headache-free implementation.

Written by: Commodities People

Change management ETRM Molecule Risk Management

Rate it

All Posts December 18, 2023

Advisory House – Major threat or driving force: Mastering political risk

Join industry experts in a webinar discussing political risk management in energy and commodity trading. Learn about data strategies, credit risk benefits, and leveraging uncertain times for innovation.