Contigo Eyes UK and European ETRM Software Markets By Dr. Gary M. Vasey

The ETRM software arena is one that often attracts new entrants. The fact that it is a complex business with many regional and/or asset-type specific requirements, especially on the physical side, means that there is often room for new entrants. UK-based Contigo is one such new entrant hoping to capitalize on its founder’s energy and market knowledge and IT skills. The Directors of Contigo spent many years working at PowerGen, which later became E.On UK. and were heavily involved in putting together that company’s trading systems. As a result, they have a good deal of expertise in UK market requirements and saw an opportunity to be a ‘niche’ supplier in the UK and European ETRM software market.

They founded Contigo in 2006 developing custom applications primarily for UK-based energy companies and found that their industry and market knowledge was in demand. The company has grown based on this model and is profitable according to Simon Piercy; its Director of Commercial and Project Management. But, the company has also been hard at work developing off the shelf software that it now sees as ready for mainstream consumption and its enVoy product is already used by four UK-based gas companies including Centrica.

Contigo’s market focus is “to target smaller players in the market at a lower price point than many mainstream ETRM solutions on the market,” states Piercy. “A lot of smaller players in the market still use Excel spreadsheets due to the high entry cost of an off the shelf ETRM software package.” All of Contigo’s software products are browser-based and employ Service Oriented Architectures making them flexible, scalable and easy to use.

The company’s three initial products include;
• enVoy - for notifications including Exelon notifications, submissions of data to the National Grid, gas notifications to Xoserve. It can support notifications to various agencies and is flexible enough that it is easy to add other data flows as required. EnVoy Interruption specifically provides UK Gas Shippers the capability to manage the process around bids and process flows for interruption.
• enVision – a business intelligence platform focused on energy and utilities. It consolidates trading and operational data for reporting, online analytical processing and data mining activities.
• enTrader – an energy trading platform that supports multi-commodity deals for power, gas, biomass amongst others and provides modules for billing and payments, service contracts and connectivity to trading exchanges.

Contigo reckon that their approach, based on their understanding of energy trading gained by many years in the industry, offers them and their clients an advantage. Piercy states “Our approach is to support a multi-commodity environment and for each commodity we provide a defined delivery calendar that determines the settlement and billing dates. The calendar is built to support complex delivery schedules, such as 23:00-23:00x48 (UK Power), 06:00-0600 daily (UK gas), weekly (UK coal), or annually (Carbon). Corresponding delivery, payment and settlement calendars enable much quicker position, risk and credit management. Products are defined as groups of periods against the delivery calendars. Traders therefore record deals as they would trade in the market – i.e. Power Baseload Summer, or Gas Balance of Month.” They also believe that they are differentiated as a “UK company serving the UK and European market.”

In fact, part of Contigo’s value proposition is to deliver cost effective software quickly and insure an ROI for the client – something that many clients already perceive as a reality. The Head of Trading and Operations of Wingas UK said of Contigo recently “Contigo was able to implement the software over a two day period and provided excellent training, enabling the roll out of the new software to be easily integrated and hassle free.” While the Contracts Manager at British Gas said “Contigo’s contribution was vital to British Gas Business’s successful participation in the first UK Gas Interruption Auction. Contigo helped significantly reduce the impact of the change on our team, freeing our account managers to concentrate on provision of quality customer service to our large account customers.”

But Contigo face a highly competitive market in ETRM software and will compete with a long list of other vendors in the UK market including OpenLink, Triple Point, Allegro, SunGard, Navita, Hyperrig and many more bedsides. End users are often attracted to a fresh face and a new vendor but the honeymoon often does not last. That’s why it is critical that vendors such as Contigo focus on being best in class in a certain aspect of the industry’s requirements utilizing their expertise to establish a beach head in that particular target market. Many new ETRM vendors have come unstuck and got into trouble attempting to be opportunistic and in trying to meet every requirement in an attempt to gain business and market share losing their focus and traction in the process.

The fact that Contigo are UK-based and have deep understanding of UK energy markets is certainly a differentiator but UtiliPoint buyer surveys have always discovered that whether the vendor is local or not ranks very low in any question regarding buying criteria. What is more important is functionality, ease of use and the ability to integrate. By building their software on Service Oriented Architecture, it is likely to be scalable and have good connectivity and their expertise in UK energy markets should ensure that they deliver the functionality. Nonetheless Contigo have made a good start and already have clients, installations and a profitable business.