Pharos Enterprise Intelligence

Our tagline is "Perfecting Commercial Operations." That's a pretty bold statement. What do we mean?

In the way we view a commercial operations team we see there being several key functions that have to work seamlessly together. There are the asset managers who market the power and procure the fuel. There is settlements who reviews and analyses the financial performance of the assets and provides feedback to the asset managers. There is regulatory who keeps the asset managers informed of market changes and lobbies on behalf of the company. Lastly there are commercial analysts who support all of the groups by diving into the details, developing the models, analyzing the risks and opportunities. Commercial analytics has to be multidisciplinary and have a good understanding of the other group's processes. It is in our view that it is the glue that ties the commercial team together.

Information Management

Managing information is critical to any commercial operation. It is also important to know what data you have access to, where it is located, how to access, how to interpret that data and then ultimately filter and deliver the needed information. A power company has access to thousands of different data points. Typically they only use a very small subset of that data and don't spend the time integrating it with separate but related pieces. Marginal improvements in managing data can result in very large improvements in operations. Performing good analysis begins with managing information well. At least one person within your organization should be dubbed the information czar. It is their responsibility to at least know what information you have access to, where it is located and how to interpret. That person can then explain to others. Read our other post on Information and Knowledge Management.

The Pharos AMS is an information management tool. We strive to collect all of your data whether it is public or private and make it accessible to you in the raw or using our visualization tools.

Knowledge and Knowledge Management

The key to a well functioning commercial operations team is to have the most complete understanding and knowledge of the assets, markets, rules and data. Each group should be experts in their area with the analytics team being well versed in all aspects. What keeps our field interesting is the fact the rules change over time. The markets are highly dynamic. The assets behave differently over time. The issues we are dealing with today are different than the ones we had a year ago. Therefore one has to continually be increasing one's knowledge through sharing and learning. Good bidding strategies, trading strategies and analyses cannot be developed and performed without a thorough understanding.

Cross training is critical. It is important for settlements to understand the job and process of the asset managers. To be a good settlements analyst you need to be able to put yourself in the shoes of an asset manager. Know what they are doing and why they are doing it helps to critically analyze the customer statements to see if what they are doing works and can be improved. On the same token it is important for the asset manager to understand the settlements. It will help them be proactive in developing good strategies.

Knowledge and experience build intuition. Most of our decisions we make in life and business are based on our intuition. We rarely perform a full analysis every time we make a decision. So it is key we work to develop and improve our knowledge so that we enhance our intuition. We do that by analyzing data. We review the past and watch the present.

Our Pharos AMS product helps to build knowledge by providing easy access to your data in an integrated manner. We combine operational, market and settlements data using innovative visualization tools facilitating easy analysis. Our system is a great training tool to quickly bring a new member of your team up to speed with how a particular market works. We also make our data guides available to our clients. Our guides include interpretation and details of our captured data. We want to be a resource for you to help you enhance your understanding of your assets and the market.

Analysis

Good analysis is critical. It can save the company a significant amount of money and it can make the company a significant amount of money. In order to perform a proper analysis you need access to data. The more accessible that data is the easier and quicker it is to perform an analysis. The less time an analyst spends collecting data the more time they can spend analyzing it or more of it.

Having a dedicated analytical staff with strong quantitative skills (preferably with good excel and programming skills) should be a mandatory requirement of your team. They should focus on the analytical heavy lifting. A good analyst can be worth their weight in gold. It is good to have someone detached from the day to day operations but who understands the day to day operations that can think creatively about the business and has the time and resources to dive into the details. Analytics should be a resource for the asset desk, settlements and regulatory.

That being said the other groups should be able to perform their own analytics. The Pharos AMS puts analytical tools in the hands of the non analysts. It focuses on the daily questions that come up that take minutes or tens of minutes to do by hand but streamlines into seconds. It is as if you have a paid analyst on staff. You can also leverage our experience, knowledge and analytical capabilities in two ways. We can create a technology to automate your common analytical needs or rather than staff up during periods of high demand hire us as consultants to perform your analytical work.

Communication

A well functioning commercial operations team needs to first have good lines of communication between each of the different groups. Society is now technologically at a point where we do not need to be in the same room anymore. Between email, the cellphone, pager and instant messaging and internet work can be accomplished anytime anywhere. The smaller the organization the more important communication becomes. This is especially true if the organization does not have a real time desk. Most of our experience has been with small operations. We recommend that the entire commercial team have an email enabled device. Those who are on call 24/7 should carry two cell phones, one on a different carrier. One of those phones should be an email enabled device like a blackberry. Cellular cards for laptops can and in our experience have paid for themselves. Sometimes time is the enemy. You do not want to be in a position where you have a laptop but no internet connection and you are not able to modify your bids or your gas nominations due to some issue. The cost of not being able to do that can easily exceed the $70/month for the service. The team should also have instant messaging. During off hours it is a good way of checking online presence. Sometimes issues are not mission critical but seeing someone online that you would not ordinarily call but would shoot a note to can save time. The last piece of communication technology is screen sharing technology. On windows there is AOL Instant Messenger Professional that has a free robust screen sharing program built into it. There are other free and commercial products out there.

So far we talked about interpersonal communication. But there is also the communication of information. Without some form of automated business intelligence someone will have to disseminate information as it comes in. For example, the team may need to know if a power plant was dispatched or fuel consumption exceeded what was purchased. In small teams without 24 hour desks it is even more important to automate the dissemination of information. It can save having to hire someone to sit there and keep the team informed second an automated system can track many more data points and send details as events happen.

The Pharos AMS helps facilitate team communication by providing an automated email notification service. We can automate the analysis and email notification of any data we capture. A perfect example is the commercial operations team and management can check their blackberries when they wake up and be caught up on everything that happened over night. No need to call the asset manager.

Technology

We have already discussed the advantages of technology in managing the business. There is one other point we would like to make. That is to have the ability to go decentralized if need be. Sometimes the corporate network goes down and you will not have access to the systems you ordinarily would. We believe it is critical to design your tools from the perspective of disaster recovery. This way if you cannot access the corporate network you can still carry out your critical functions such as bidding and scheduling power. We get nervous when we see companies use bid tools that are tied to corporate systems. We prefer the use of a spreadsheets in bid construction. A spreadsheet can function from any laptop with an internet connection. You should be able to accomplish anything mission critical anytime from anywhere. Even with an Asset Management System there will be times where for whatever reason it may be inaccessible. Training your group to manually access that information is important.

Investing in technology should not be viewed as a cost center but a cost reduction center. Getting it right can allow you to do far more with much less. We have seen it many times in the past where people are afraid to spend money not realizing it can save them much more. Technology spending is a both a force multiplier and an insurance policy. Technology will allow you to do more with less and help prevent those big ticket costs from happening.

The Pharos AMS allows you to have an outside your firewall option for accessing your own data. It provides another level of redundancy for those times when you network goes down. It is also another backup solution for your data. It is an investment in technology, knowledge and security.

Perfecting Commercial Operations

Organizing your organization with the right concepts and tools can streamline your business, minimize the need for employees, cut costs, limit errors and allow you to do far more. Contact us at info@pharos-ei.com if you would like to discuss how we can streamline your commercial operations. We can audit your operations and make recommendations to maximize your resources.