Energy & utilities
Overview
The energy and utilities industry includes oil, gas, electricity, and water companies.
One of its major challenges can be summarised in a single word: Volatility.
Taking the price of oil as an example, this is not a new phenomenon: “After touching $147 a barrel in July 2008, the price of oil had fallen to $47 when the world economy was deep in recession. But before the end of 2009 the price was back to $75-$80 mainly because of the liberal cut in oil supplies by the OPEC and overbought position in oil futures1.”
But price volatility gained renewed impact in the course of 2010 – 2011: “Oil prices are at it again. In June 2011 rates have dropped almost 20 percents from the $114 high that it touched 4 months earlier. Going by the current trades, oil prices are hovering slightly below $98 as we enter the third quarter of 2011. The media, scrambling for an explanation it seems, has been quick to attribute these rapid fluctuations in oil price to the unrest in the Middle East and natural calamities across the globe such as the Japanese earthquake and tsunami. But the Federal Trade Commission (FTC) begs to differ. In fact, extreme fluctuations in oil prices over the last few months have led the Federal Trade Commission to launch a full-fledge investigation into the oil and gas markets2.”
For customers, such an unpredictable input represents a major risk.
Energy purchase ceases to be a simple procurement exercise and becomes instead a battle to minimise the impact of an uncontrolled cost on their business.
These fluctuations may be evened out in future years by the global drive to bring renewable energy sources on stream.
Although generally associated with the industry’s CSR obligations, these programmes are not driven solely by carbon reduction targets.
Energy and utilities companies themselves are acutely aware of the reputational damage they face unless they are seen to be actively addressing environmental issues – especially in the wake of high profile oils spills, a bad press for coal-fired power stations and mixed attitudes to nuclear energy.
In the face of these challenges, leadership teams within the industry must make a strategic decision on how to add value in their markets.
For some – Xchanging customers amongst them – that decision includes removing complexity from their operating models so they can focus on the things that really make a difference to their customers.
1 http://reut.rs/j0hMEc
2 http://bit.ly/qJu0Km
3 http://bit.ly/reOhoC
To discover more about the ways in which we can help our customers, please click the links below:
We offer energy and utilities organisations the opportunity to remove complexity across a full range of business processes. By unburdening themselves of back office functions which support their operation but are essentially peripheral to their vision and mission, we give these customers time and efficiency to focus on what they do best. The result is more flexibility and greater efficiency in the face of formidable challenges. Customers in this sector already trust us with risk management and finance and accounting processing. When required, we can also process payroll, learning and development, recruitment, and HR administration as well as offshoring services which can deliver advantages including speed to market, back office transformation, on-demand business, improved customer service and cost optimisation.
Customers include: Mercuria Global Energy Solutions
We offer extensive technology capabilities across a variety of industry sectors. In energy and utilities specifically, our solutions include providing hosting and network services for a UK-based multinational and delivering infrastructure management for one of the largest independent energy trading companies in the world. On the wider stage, our infrastructure team supports customers’ growth with cost effective, scalable and rapidly-deployed solutions. We also design, build and run the software that supports a range of business processing solutions. We embed our intellectual property (IP) to create a solution faster and more cost-effectively than our customers can themselves. We can also provide customers with Total IT Outsourcing (ITO) solutions – a single point of supply for an end-to-end managed service.
Customers include: Centrica, Mercuria Global Energy Solutions
We are experts in supporting procurement professionals with services including sourcing, spend management, procure to pay (P2P), system management and software solutions. We actively engage with the procurement community across industry sectors and look to provide thought leadership and develop strategies for creating added value procurement.
