07 Jun 2010, Lianna Brinded, Energy Risk
Our 2010 Software House of the Year goes to SunGard Energy & Commodities. Over the past 12 months the company has made several significant investments in its energy and commodities business, including launching its Aligne brand, acquiring the ICE Risk product from the IntercontinentalExchange (now called Kiodex Real Time), and combining its previously separate energy and commodities business to form a single entity. It has also won new clients around the globe.
These includes Oman Refineries and Petrochemicals, which is the country’s sole supplier of fuel, and Tata Power Trading, a wholly owned subsidiary of India’s largest private-sector power utility, as well as new European clients. Its energy and commodities business now spans 400 customers in 35 countries.
Hailed as an industry first, SunGard’s straight-through processing (STP) and component-based system, Aligne, has been widely accepted as one of the first software solutions that has fully addressed the market’s need for a quick, accurate and fully automated front- to back-office trading system, across all different commodities and products.
The system integrates trading, risk and control, credit, fuel procurement, emissions compliance, back-office, treasury and finance and senior management information needs. Although there is the option to replace the entire front- to back-office system network with Aligne, companies are able to pick and choose components to add to existing systems, which helps if the firm in question needs to adapt to newer markets, such as using emissions data management.
SunGard’s Kiodex Real Time service provides real-time trade and price information to help traders see the immediate results of trades via direct connection to exchanges. It publishes over 800 different forward curves and volatility surfaces every day, in order to give an independent view of what and how instruments should be valued.
SunGard says the combination of the transparency it provides with its Kiodex Real Time platform and its ability to deliver STP through Aligne for many different sectors of the energy and commodities spectrum has allowed to it to address both old and new clients’ needs.
“We look at the complete transaction life cycle and the entire operational process and provide a holistic solution to address the client’s real pain,” says Ben Jackson, senior executive vice president of SunGard’s energy and commodities business. “The real pain differs by organisation and this can range from efficiency and control of the whole operation to transparency of data and information used to manage that operation or needing a rapid return on investment and rapid time to market.”
SunGard says its strong working relationship with regulators, as well as its customers has allowed the group to quickly adapt to changing client needs, which resulted in the two new system launches.
“We work with the Federal Energy Regulatory Commission (FERC) and Commodity Futures Trading Commission (CFTC) and our customers to maintain an overall market view of how regulations are changing and how regulators are thinking about further modifying them in the upcoming year,” says Jackson. “We would be kidding ourselves to say there are not going to be further changes to these markets. Whether you are a utility or bank or hedge fund, the Obama administration has made it pretty clear that there is going to a continued push for transparency.”
As well as liaising with regulatory bodies to understand the impact of new regulation on its clients, SunGard has also been quick to develop systems that address new regulatory requirements and bring them to market swiftly.
“One of the big differentiators between us and the competition is our time-to-market,” says Jackson. “Our customers’ experience proves our ability to have operations up and running in a quicker time frame. From a compliance perspective, we have endeavoured to build in more and more regulatory compliance capabilities, whether our clients are dealing with ever changing rules from the FERC or CFTC. This has been a heavy focus in our investments that we have brought forward to our customers.”
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