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ENTERPRISE RISK MANAGEMENT (ERM)ARE WE THERE YET?BySalim J. JabbourAbacus Solutions IncEUCI Energy Trading, Transaction and Risk Management (ETRM) ConferenceHouston, TexasSeptember 2008
FOCUSERM PILLARSPeopleProcessesSystemsPRESENTATION FOCUS: SYSTEMS (ETRM)ABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 2
PERSPECTIVEThe Development of ETRM Systems .1992199319941995199619971998TRIAL & ENT20072008RECOVERY15 Years later .10-30% of Corporate Data is Inaccurate Bad Data Can Cost 15-20% of Operating RevenueIntegration Saves Significant Costs 30% Cost Reduction (CISCO)One Risk Simulation Can Create 30GB of Data A Person Can Process 4GB of Information in a Lifetime!ETRM Systems Have a 60% Replacement Rate ABACUSSOLUTIONS INCLegacy Systems Fail to Meet User NeedsNeed forDATA QUALITYNeed forINTEGRATIONNeed forINSIGHTSNeed forBETTER SYSTEMSEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 3
CHALLENGES AND YMENTINTEGRATIONToward fully integrated ETRM .ABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 4
ENTERPRISE RISK MANAGEMENT (ERM): nanceCreditISOABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 5
ENTERPRISE RISK MANAGEMENT (ERM): DATA ACQUISITION1.2.FOOTPRINTDATA ACQUISITIONAlternatives UI Databases EXCEL Files Web OtherFeaturesABACUSSOLUTIONS INC Ease of Use Data Validation Automation SpeedEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 6
ENTERPRISE RISK MANAGEMENT (ERM): DATA MINING1.2.3.FOOTPRINTDATA ACQUISITIONDATA MININGABACUSSOLUTIONS INCAreas Markets Generation LoadFeatures Ease of Use Breadth Flexibility Automation SpeedEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 7
ENTERPRISE RISK MANAGEMENT (ERM): DATA ANALYSIS1.2.3.4.FOOTPRINTDATA ACQUISITIONDATA MININGDATA ANALYSISMarkets Simulation Spot and Forward Stochastic Process Granularity Rigor Flexibility SetupGeneration Optimization Unit Commitment Economic Dispatch Thermal, Storage, Renewable Operating Characteristics LimitsLoadsTradesCreditPortfolio ManagementABACUSSOLUTIONS INC Efficient Frontier KPIEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 8
ENTERPRISE RISK MANAGEMENT (ERM): DATA MANAGEMENT1.FOOTPRINTArchitectureStorage2.DATA ACQUISITIONOrganizationCleaning3.DATA MINING4.DATA ANALYSISRetrievalMissing DataDefaults5.DATA MANAGEMENTABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 9
ENTERPRISE RISK MANAGEMENT (ERM): TRANSACTION MANAGEMENT1.FOOTPRINTDeal CaptureTemplates2.DATA ACQUISITIONContractsAgreements3.DATA MINING4.DATA ANALYSISConfirmationLimitsControls5.DATA MANAGEMENT6.TRANSACTION CUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 10
ENTERPRISE RISK MANAGEMENT (ERM): DATA SECURITY & .4.DATA ACQUISITION Read Write Setup (User, Job Title, Category)DATA MININGDATA ANALYSIS5.DATA MANAGEMENT6.TRANSACTION MANAGEMENT7.DATA SECURITY & INTEGRITYABACUSSOLUTIONS INCAudit Trail (Changes) Old/New Author Date/TimeData Validation Warning Messages Error MessagesEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 11
ENTERPRISE RISK MANAGEMENT (ERM): REPORTING & PRESENTATION1.2.FOOTPRINTDATA ACQUISITIONCase/Run Management Multiple Cases/Runs Comparative AnalysisReporting3.4.DATA MININGDATA ANALYSIS5.DATA MANAGEMENT6.TRANSACTION MANAGEMENT7.DATA SECURITY & INTEGRITY Details Standardization UI & Exports Tables & Charts Filters DrilldownsDashboardsFlexibility8.REPORTING & PRESENTATIONAccessSharing & CollaborationABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 12
ENTERPRISE RISK MANAGEMENT (ERM): DECISION SUPPORT1.FOOTPRINTTradingAsset Management2.3.DATA ACQUISITIONDATA MINING Operations Planning ValuationLoad Management4.DATA ANALYSIS5.DATA MANAGEMENT6.TRANSACTION MANAGEMENTISO Load Bids Generation OffersRisk ManagementFinancial Management7.DATA SECURITY & INTEGRITYCredit ManagementPortfolio Management8.9.REPORTING & PRESENTATIONDECISION SUPPORTABACUSSOLUTIONS INC Asset Acquisition Asset DispositionCorporate Management Regulatory Compliance Corporate GovernanceEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 13
ENTERPRISE RISK MANAGEMENT (ERM): APPLICATION & USE1.2.3.4.5.6.FOOTPRINTDATA ACQUISITIONDATA MININGDATA ANALYSISDATA MANAGEMENTTRANSACTION MANAGEMENTApplications Markets Analysis Generation Management Trading Loads Analysis Financial Planning Credit Management Investment Management Business Planning Operations Planning Risk ManagementUsers7.8.9.DATA SECURITY & INTEGRITYREPORTING & PRESENTATIONDECISION SUPPORT10. APPLICATIONS & USE Traders Analysts Managers ExecutivesDeployment Customization TrainingUsageABACUSSOLUTIONS INC Ease of Use AccessEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 14
ENTERPRISE RISK MANAGEMENT (ERM): ARCHITECTURE1.2.3.FOOTPRINTDATA ACQUISITIONDATA MININGProcessing Serial/Parallel 32-Bit/64-BitMulti-Threading Spawning DistributionData Storage & Retrieval4.5.6.DATA ANALYSISDATA MANAGEMENTTRANSACTION MANAGEMENT Disk MemoryHardware Configuration Static OptimizedHardware Utilization7.8.9.DATA SECURITY & INTEGRITYREPORTING & PRESENTATIONDECISION SUPPORT10. APPLICATIONS & USE11. ARCHITECTUREABACUSSOLUTIONS INC Memory CPUsScalability Vertical/Horizontal Stochastic Simulations Markets Analysis Time Frame Granularity GeographyEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 15
ENTERPRISE RISK MANAGEMENT (ERM): ENTERPRISE SERVICES1.FOOTPRINTPortal CollaborationCorporate Data Warehouse2.DATA ACQUISITIONUsers ForumMessaging3.DATA MINING4.DATA ANALYSIS5.DATA MANAGEMENT6.TRANSACTION MANAGEMENT7.DATA SECURITY & INTEGRITY8.REPORTING & PRESENTATION9.DECISION SUPPORTDocument ManagementUsage Analysis10. APPLICATIONS & USE11. ARCHITECTURE12. ENTERPRISE SERVICESABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 16
ENTERPRISE RISK MANAGEMENT (ERM): ManagementDecisionSupportReporting &PresentationEnterpriseServicesMarkets Generation Loads Trades Finance Credit ISO ABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 17
CONTACTFOR MORE INFORMATIONContactSalim J. www.abacussolutionsinc.comABACUSSOLUTIONS INCEUCI Energy Trading, Transaction and Risk Management (ETRM) Conference – Houston, Texas, September 2008Page 18
ARCHITECTURE 12. ENTERPRISE SERVICES. EUCI Energy Trading, Transaction and Risk Management (ETRM) Conference –Houston, Texas, September 2008 Page 17 SOLUTIONS INC ABACUS ENTERPRISE RISK MANAGEMENT (ERM): CHECKLIST Decision Support Data Mining Data Analysis Reporting & Presentation Mar
