Over the past few years, outsourcing Energy/Commodity Trading & Risk Management (E/CTRM) implementations and upgrades has become commonplace, with some vendors outsourcing the majority of these services to external partners. A different but related trend is now emerging: the outsourcing of support services to outside firms, with some clients engaging consulting firms to provide enhanced support. In this article we explore this trend, explain the rationale behind it and review some key issues.
Traditionally, E/CTRM vendors have wanted to own the implementation, upgrade and support services related to their product. In recent years, however, vendors have agreed to engage delivery specialists for implementations and upgrades, allowing the vendor to focus more on their core product development.
A key driver of the trend was that vendors realized it was difficult to maintain teams of implementation experts to fulfill a varying workload. Solution partners began to develop the specialized skills to implement and upgrade complex E/CTRM solutions, in many cases attaining expertise above and beyond that of the vendor.
Additionally, clients have become more accepting of utilizing external firms – with some clients preferring to involve a third-party integrator specifically to reduce their dependency upon the vendor. We are now observing a similar pattern emerge in relation to E/CTRM support services.
Extending the Model to Support Services
In the recent past, vendors wanted to own 100% of the support responsibility for their product, and 100% of the support relationship with their clients. However, vendors are realizing that support vendors can play an important role in the ongoing support of their product.
Some vendors are engaging external advisors to augment the support services they provide for their clients. Similarly, some clients are willing to engage consultants to enhance support services that were once supplied exclusively by the vendor.
Why External Support is Gaining Traction
E/CTRM implementations are complex, especially when further customizations need to be implemented in the field to meet a client’s specific requirements. ‘Vintage’ vendor products installed at a client’s site are particularly difficult for the vendor to support. It is not uncommon for clients to be running vendor products that are five (or more) years old, as version upgrades can be very costly and so may not be adopted.
For vendors with clients running a variety of versions, the support burden becomes an increasing challenge. Many vendors have a scaled support policy with limited to no support for versions that are more than several years old. Wherever it is impractical for clients to upgrade frequently and, on the flip side, impractical for the vendor to actively support many different versions, there is likely to be a trend towards engaging external specialists.
In addition, vendors often have a broad range of clients, in different industry segments, running multiple versions of their product. They may have limited knowledge of the client’s specific business, and the configuration and customization specific to that client.
Finally, the fast-paced and high-pressure nature of E/CTRM support means there can be moments when the client’s need for support outpaces vendor bandwidth, particularly where client-specific nuances are involved. By contrast, a third-party consulting company may have specialized sector knowledge, familiarity with the client’s business processes, and detailed knowledge of that client’s overall implementation – putting them in a much better position to offer support and resolve issues faster.
Enhancing Support Outcomes
Support from the vendor is still important. Some issues, such as a software code change, must continue to be routed to the vendor’s support and/or development team for resolution.
However, the external advisor may still play a role. For example, clients may find it difficult to document issues in ways that are completely understood by the vendor’s support team. Specialized consultants often have the depth of expertise to offer a more precise description and the necessary level of detail – helping the vendor and client avoid several iterations as they try to home in on the exact problem.
There is also a large class of support issues – including training, data analysis/correction, and reporting – that can be addressed by an external support team quickly without engaging the vendor’s support team at all. An experienced advisor can often pull in senior expertise quickly to resolve an issue for a client, whereas vendors may need to escalate tickets through a pre-defined queue before eventually dispatching the right expert to solve the problem.
Proactive Support
Consulting teams may also be in a position to provide more proactive assistance. Whereas vendor support teams typically have a narrow focus on the reported issue, the support partner can often offer more comprehensive solutions and address further potential problems.
Support partners can assist with new configurations for new business and new markets, as well as helping with creative workarounds or code fixes where the core solution allows. The use of external support partners can thus lead to a ‘win-win’ situation, with the client getting superior, proactive support that allows the vendor to focus on a more tightly defined set of product issues.
How Capco Can Help
Capco has demonstrated the ability to deliver enhanced, proactive E/CTRM support services across multiple dimensions, including:
- Real-Time Monitoring & Remediation
Proactively identify and resolve overnight valuation errors – caused by data entry or system issues – before business users start their day, ensuring continuity and reducing operational disruptions. - Automated Data Quality Checks
Develop and run daily scripts to detect recurring data issues, enabling the support team to take preventative action and improve system reliability and user confidence. - Environment Management & User Support
Provide day-to-day system environment management, configuration guidance, and usage support – acting as an extension of the client’s internal support team. - Backup & Issue Escalation Support
Serve as a flexible support layer, assisting internal teams in resolving issues, while sharing knowledge of bugs and challenges observed across other clients to improve resolution time and system stability.