Insights and Lessons Learned on Effectively Transforming Commercial Operations for Gas and Energy Network Operators

"The secret of change is to focus all your energy, not on fighting the old, but on building the new." – Socrates

Over the past decade, we have partnered with clients across the Americas, EMEA, and Asia-Pacific to help them transform their commercial operations (retail, wholesale) and pipeline scheduling (Transmission, Storage, and Distribution). These engagements have involved implementing either vendor-provided solutions or developing custom commercial operations and scheduling platforms from scratch.

Through these experiences, a set of shared challenges and lessons learned always surface, which this article will explore for those who are either on this journey or about to embark on a similar transformation.

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Challenge 1: The Complexity of Commercial Transformation Projects

Commercial transformation projects can be intricate, with many opportunities to misstep. There is no commercial off-the-shelf (COTS) solution that fully meets all business and technical requirements without some level of configuration and customization. Each utility or energy company has unique nuances in how they operate their commercial functions. These variations arise from how different companies:

• Execute tasks across roles such as schedulers, traders, purchasers, and commercial analysts.
• Interpret regulations such as NAESB, FERC, or other governing bodies.
• Manage the complexity of tariffs, contract, commercial rules and arrangements (e.g., Capacity Release, Tiered Contracts, Park and Loan, Swap Agreements, Pooling etc.).
• Navigate the physical intricacies and attributes of their pipeline or network.
• And the list goes on…

Lesson Learnt – The Blueprint Phase Can De-Risk Delivery and Simplify Complexity

While some configuration and customization are often unavoidable, utility and energy companies should, where possible, adopt a blueprint phase before contract award or look to extend the design phase of your project with a milestone at the end that allows for adjustment. This phase allows for:

• Sharing situational context – This reduces the "Assumption Gap" between what the business intended and what the vendor interpreted. This is especially important for areas prone to misunderstandings or assumptions being taken, such as (not limited to):-

o?? Pricing (Complex, Standard, Matrix);

o?? Customer & Contract Management (Terms of Service, Capacity Release, Firm vs Interruptible Contracts, Rates, Charges etc); ?

o?? Position & Volume Management,

o?? Scheduling (Nomination Models (especially Pathed Non-Threaded Model)),

o?? Fuel Management (Unique Fuel Zones),

o?? Capacity Allocation and Optimization (aka ‘Walking the Pipe’ – what are the Rules, Priorities and Rights))

o?? Balancing (OBA, Trading Imbalances), to

o?? Post-day Settlements, Invoicing and Reconciliation (adjustments).

• Discovering how the proposed solution can meet your needs – Traditional RFPs rarely provide the deep insight necessary to truly understand what is "under the hood" of a solution.
• Exploring solution options – Early exploration of how the platform can meet needs while identifying areas to standardize can help simplify delivery.
• Re-baselining schedule, solution, and costs – After completing this phase, both parties are better positioned to have a successful transformation and minimize the risk of significant change requests later in the project.

Case Study 1: North America, West Coast Gas Utility (Cloud-based vendor solution implementation)

After developing a comprehensive set of prioritized requirements (+1000), the vendor engaged in a blueprint/conceptual design phase before any contract was awarded. This phase included in-depth workshops and discussions that explored real-life applications of the requirements. Through this process, customization needs were reduced from 30 to 16, resulting in a 33% decrease in the overall implementation cost by addressing complexities and assumptions together.

Challenge 2: Scope management and Definition.

Implementing a commercial gas optimization and scheduling platform, often with multiple interfaces, is a massive undertaking. A thorough set of requirements forms the foundation for a successful implementation.

Lesson Learned: Prioritize Requirements into Key Releases

Forget the term "MVP" in commercial gas operation transformations – this is an evolving operation that will require ongoing investment. By prioritizing requirements into key releases, you can deploy the right solution quickly while unlocking immediate value.

Lesson Learned: The Role of the Business Product Owner

The Business Product Owner is critical because they have the authority to make the hard decisions regarding requirements. Their understanding of the end-to-end process, combined with decision-making authority, allows them to effectively manage which requirements make it into the release versus those that can be deferred.

Case Study 2: UK, Gas Utility (Custom Commercial Platform for Growth)

For a UK gas utility, we recently deployed a custom gas control + commercial platform where one of the key ingredients for our success was the role of the Business Product Owner. This individual was someone who understood the business and had operated across multiple control room and commercial operational departments through his career at the utility. Wearing multiple hats from:

• Being an overall project champion
• Helping to identify and provide business resource to support key workshops and discussions
• Attending and sharing feedback during show/tell demo
• Approving solution UI/UX designs;
• Helping to clarify key functionality where teams and individuals had differing points of view as to how the to-be should be
• The list goes on…

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Challenge 3: The Test Strategy and Approach

Testing is vital in software implementation to uncover issues beyond theoretical proofs. As programmer Donald Knuth warned, “Beware of bugs in the above code; I have only proved it correct, not tried it.” Even well-designed code can have hidden bugs or unforeseen issues when deployed in real world environments. Rigorous testing, including unit, system integration, and user acceptance tests, ensures the software (whether vendor or custom) performs as expected in real-world scenarios.

Lesson Learnt: A Shift testing to the left in the schedule by starting early:

Testing seems to always take more time than anticipated. To strike the right balance between over or under testing, concentrate on processes that are most critical. For example, since Capacity Allocations Scheduling is essential for accurate capacity allocation and cuts; testing it early will ensure adjustments are applied correctly. Tackling complex scenarios first will help identify major issues sooner, avoiding last minute defects with a shorter runway testing.

Case Study 3: Trans-European Power Market (Custom Trading, Optimization and Scheduling Platform)

In this project, testing began almost immediately after the first use case was developed (Project leveraged a mix of waterfall and agile delivery methodology (WAGILE). The team prioritized the design, development and testing of capacity allocation and optimization features first due to its complexity. Early success in this area allowed the upstream and downstream functionality to be developed resulting in minimal rework. If we left the design, development and testing of capacity allocation to a later time in the schedule it would have inevitably resulted in regret spend and time needing to be spent making changes upstream and downstream of the platform to accommodate changes to ensure capacity allocation and optimization would work as intended.

Lesson Learnt – User Acceptance Testing (UAT) and Full Gas Day Testing Phase:

UAT ensures the scheduling software meets end-user needs as intended. Full Gas Day testing simulates an entire gas day with all 5 cycles, ensuring modules integrate and handle real-time changes, such as nominations or measurements, effectively. Ensure enough runway to test all testing phases.

Lesson Learnt – Automation & regression testing:

During intensive testing phases, defect fixes are often deployed to the test environment. For instance, if a fix addresses issues with the measurement import process but the file transfer path is incorrect, users might have to manually adjust the path. However, these manual changes may not carry over to other environments, resulting in inconsistencies and potential rework. To maintain quality control, continuously develop and update regression testing scripts, and automate them where possible to improve efficiency and consistency.

Case Study 4: North America, West Coast Gas Utility (Cloud-based vendor solution implementation)

A core testing phase was considered in our approach and schedule revealing 55 critical or high defects and helped commercial analysts and schedulers become more familiar with the system. It also laid a solid foundation for further testing and internal training. Recently the client reflected and shared their perspective of ‘thank god we ensured that testing started early in the schedule, and we spent of the 18-implementation timeline - 12 months of it testing’.

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Challenge 4: Environments & DevOps Release Management

When implementing a complex commercial, trading and/or gas scheduling solution, most clients use multiple environments for development, testing, staging, and production. Each environment requires appropriate configuration and synchronization, which requires meticulous planning and coordination.

Lesson Learnt – Synchronized Configuration and Code

Regularly refresh development environments and maintain thorough documentation of all test cases, defect tickets, and deployments. This ensures consistency across environments and avoids mismatched configurations.

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In conclusion

This blog outlines some of the common challenges and valuable lessons learned in transforming commercial operations for gas and energy network operators. ?The key to success lies in detailed planning, a WAGILE delivery framework, early testing, and maintaining alignment across stakeholders, delivery partners, and vendors. Thinking of embarking on a commercial operations platform transformation or simply wanting to hear more please reach out to:

Ben Kauffmann | N. America GTM Transformation Lead?

Email: Benjamin.kauffmann@accenture.com

Suvi Jain | Senior Utilities Consultant

email: Suvi.jain@accenture.com)

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