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Case: Implementation of Governance and Business Growth for Energy Trading

0 M

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0 FTE

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Table of Contents

BACKGROUND

A global energy trading firm wanted to move forward with automated trading within their company. All automated trading development were concentrated in a single department and only a few algorithms were live.

 

In this case:

  • Automated Trading: refers to the set of processes in the trading value chain that are fully automated.
  • Algorithmic Trading: involves algorithms that independently set order parameters and execute trades without human intervention.

CHALLENGE

A clear diagnosis was needed to understand why automated trading was not expanding. It required to look at many layers of the company and act from management level to operational levels. The review needed to include IT infrastructure analysis and End-to-end process value chain reviews. It also required to review the skills & Capabilities as well as establishment of the control framework.

ASSIGNMENT

Provide a clear view on the current-state and propose a future state to enable growth. Include cross-departmental and management buy-in. Additionally educate the organisation on the requirements for automated trading.

APPROACH

Porteg assigned its Senior Partner / Business transformation expert.

 

We decided to split the work into two distinct phases.

  1. A 8 week review of the current situation as-is: A thorough analysis of the current-setup of all different layers of trading (lifecycle of a trade) from front office to back office, from pre-trade to post trade. Defining the weak points for further automation.
  2. A 16 week future solution. Deeper problem analysis and start of implementing improvements in multiple areas, establishing the governance and departmental structures required including internal control.

RESULT

Manys sessions (interval of every 2 weeks) were held with the management team to ensure buy-in was achieved and every finding was clearly outlined. A new framework was proposed, tailor made for the unique needs and set-up of the company. Easy-fixes were applied rapidly in an Agile method, while structural plans were made for more complex improvements (change management program). The future proof algorithmic trading framework was piloted rapidly by deploying skills throughout departments and setting up cross-department cooperation. The company was ready to execute on the program. A clear governance framework was provided to ensure future growth and guarantee results.