Mapping The World’s Energy On The Move

Tom Groenfeldt

Commodity traders can get a real-time view of their most important assets with a new interactive data and mapping tool on Thomson Reuters Eikon, its trader desktop.

Want to see what’s happening in the Houston Ship Channel? Click on Energy and see the refineries and ships around Houston. Click on a refinery for information on ownership, production capacity and current status/spare capacity. The map also shows all the tankers in the area, with regular updates on their movements and direction from ship transponders whose signals are picked up by on-shore monitors. Movements of ships further at sea are updated from satellite information about seven times a day. Ship colors indicate size, such as very large crude carriers, and the map shows whether they are full or empty. Click on a symbol to see the ship’s name and other information.

Called simply enough, Interactive Map, the tool has been in development for over a year.

Weather? Overlay local or global weather conditions and see ships that could be in danger so you can prepare alternate routes for them send a substitute cargo from a different direction to arrive after the storm.

Not working in Houston? Type in Vancouver for information there, or Shanghai. Search for coal mines, nuclear plants, or gas powered generators. Summary tables will show information by region.

Looking for a Maersk tanker? The map showed a very large crude carrier (VLCC) heading into the Suez Canal. Click on it to show its track and where the ship has been in the last 48 or 64 hours.

The mapping, from geographical specialist Esri, sits on top of a huge database of energy and commodity information so customers can access the data and see the results in a visual map at any scale they want.

“Analysts will look at broad production while traders will look at events and how they impact supply chains so they can determine how to change their trading strategy and ways to handle physical risk,” said Shaun Sibley, managing director, commodities & energy at Thomson Reuters. “Their customers want to understand the potential impact of a hurricane on the East coast or earthquakes hitting mines in Chile.”

When Sandy was moving toward the U.S. coast, the maps were incredible, Sibley added. The maps showed which refineries could be hit by the storm. They also shows surface temperatures and wind speeds to help utilities predict power consumption and production. They can also show flooding potential for six to 24 hours.

Concerned about Iran and the Strait of Hormuz. The map can show all the ships in the strait and link to Reuters stories about the pinch point. How’s congestion at the Panama Canal? The map shows ships in transit and those waiting at anchor on either side. Again, a weather overlay will show current or approaching storms, their type and intensity.

Type in LNG and see all the liquefaction plants and check ship locations.

“They love the vessel data,” said Geoff Smith, head of fundamentals product, said about clients who have used it in beta.”That is the big thing in the energy market.” Eikon also lets traders move data from the map and underlying data into Excel.

“But if you try to understand the data just by looking at Excel, it is difficult. With the map you can see the relationships, where energy is coming in and how and how events can affect it.”

“As visualization capabilities continue to grow more sophisticated, financial firms are increasingly relying on real-time visual display functionality to help them refine their strategies,” said Rik Turner, senior analyst at Ovum. “In the commodities sub-vertical, using advanced map imagery to capture, understand and drill into various aspects, such as commodity freight and production and the impact of storms and natural disasters, enhances financial professionals’ ability to interact with that data, enabling them to make more informed trading decisions.”

“Filtering is important,” added Sibley. “For a specific commodity in a region I can select it, filter out what isn’t important and put it in Excel.” Clients can also take a list of ships from Excel and enter them into the map. Operations teams have used the maps to respond to storms in the South Atlantic and move ships to avoid them. The mapping database is constantly updated with information from Thomson Reuters and Platt.

“With Eikon we are harnessing advanced technology to present financial data in an incredibly simple, intuitive way,” said Leigh Henson, head of energy at Thomson Reuters. “The simplicity really belies the complexity behind it,”  “Interactive Map helps commodities professionals to stay ahead of the market and react to changes in weather patterns and political and geographical events which may alter production and delivery as we saw with the impact of Hurricane Sandy on East Coast US oil refineries recently. And the simple visualization means they’ll get the picture instantly, quite literally.”


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Lighting Up Dark Pools And Dissing Dodd-Frank

Derek Klobucher

Shadow banking may sound like the demon brainchild of Dr. Evil and Gordon Gekko, but about half of the banking system’s assets are in this mostly unregulated realm of finance. And global regulators at the Financial Stability Board recently looked at taming that realm.

Shadow Banking and Dark Pools 11-21-2012Liquidity buffers, leverage limits and standards on how to make calculations were among the FSB’s suggestions, AFP reported Sunday. The largest shadow banking sectors are in the U.S. and the Eurozone, but systems in other geographies are about five times the size of GDP, as with Hong Kong and the Netherlands.

Policymakers around the world are trying to shine lights on shadier parts of the financial services industry. But authorities are finding transparency in surprising places — and hope in some unlikely places.

On The Dark Side

The almost-as-nefariously-named dark pools are also on international regulators’ hit list, according to The Financial Times on Monday. These off-exchange venues keep prices hidden until after the trade — and keep identities a secret.

Stock trading via dark pools in the U.S. is up almost 50 percent since 2009. Asset managers like them because they reduce risk and prevent electronic traders from carving up orders, but U.S., European and Australian officials worry that dark pools will undermine public markets.

“If the majority of order flow is filled away from pre-trade transparent markets, investors could withdraw quotes because of the reduced likelihood of those orders being filled,” Rhodri Preece, director of capital markets policy at London-based investment association CFA Institute, told FT. “It would be prudent for authorities to monitor these developments closely.”

Regulators seem to agree, but they have their work cut out for them, as transparent markets still aren’t completely sorted either. The U.S. Securities and Exchange Commission is looking into allegations that American stock exchanges offer unfair advantages to their more sophisticated traders, The Wall Street Journal reported Monday.

Trading Darkness for Daylight

On the other hand, diminished risk got foreign exchange swaps and forwards off the hook for tighter regulation last week. The contracts, which guard against fluctuating currency, are transparent and liquid enough not to need regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the U.S. Treasury Department said Friday.

Market participants, such as the big banks that lobbied for this decision, are understandably elated because they will dodge some of the most expensive Dodd-Frank rules — but not all of them. They will still have to abide by conduct and reporting.

Oh yeah, and no more betting with taxpayer money.

Different Strokes for Different Volcks

One of the more notable components of Dodd-Frank is the Volcker Rule, which prohibits proprietary trading by banks with branches in the U.S. The rule would hold regardless of whether the banks are based there.

That would mean foreign banks with a U.S. footprint would suffer the same Volcker-induced headache that American banks have. Costs and other issues associated with Volcker Rule compliance could prompt foreign banks to flee the U.S., according to some American attorneys.

“I doubt that Volcker alone will lead to a mass exodus,” Alan Avery, a partner at Los Angeles-based law firm Latham & Watkins, told the International Financial Law Review. “But banks are beginning to conduct cost/benefit analyses to determine whether it’s worth maintaining a presence in the U.S.”

And the U.S. doesn’t need a mass exodus of banks as its budget is careening toward the fiscal cliff.

Beacon on a Cliff

Looking over the edge of that cliff may not get most people thinking optimistically. The fragile U.S. economy could crumble back into a recession if politicians do not reach accord on the federal budget, Ben Bernanke told the Economic Club of New York on Tuesday.

But détente could presage a prosperous 2013, the chairman of the Board of Governors of the Federal Reserve System also said.


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3 Reasons Sony’s PS Vita Will Crush Handheld Competitors

Tim Clark

A Google search on the PS Vita yields hundreds of stories about Sony’s dual-stick, powerhouse handheld’s “disappointing sales.”

It’s too expensive, lacks a decent library of games and worst of all, it’s irrelevant since millions of consumers play games for free on mobile phones and tablets.

Truth be told, I was thisclose to selling my PS Vita for the same reasons. But now it appears Sony is ready to lay a serious smack down on competitors (and whiny gamers) thanks to three brilliant moves pulled off this week.

Price drop. High price might be the biggest bone of contention for many who have considered buying the PS Vita but have been holding off, waiting for an “inevitable” price drop. Between the device, proprietary memory card, games and accessories, the PS Vita ain’t cheap, that’s for sure. But now that attractive bundles are available (Call of Duty: Black Ops and Assassins Creed: Liberation for $199 on Black Friday!) it’s time to pull the trigger.

PlayStation Plus. The recent Firmware 2.0 update now means the generous PlayStation Plus program of the PS3 extends to the PS Vita. After the firmware update, I received my “Instant Game Collection” I was too cheap to buy the first time around: Uncharted: Golden Abyss, Gravity Rush, wipEout 2048 and Jet Set Radio. Nice.

Games. A handheld is only as good as the games it plays and the PS Vita is now firing on all cylinders. In addition to the aforementioned, there’s Persona 4 Golden, PlayStation All-Stars Battle Royale, Jetpack Joyride, Ragnarok Odyssey, a new Ratchet and Clank in January and Killzone: Mercenary to look forward to. Let’s not forget about PlayStation One classics, hundreds of “Minis” and independent games like Retro City Rampage.

Clearly, the PS Vita loves you. Now it’s time to love it back.

Get your game on @TClark01.


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Digital Customers Now Rule The World. Are You Ready? (Part 1)

SAP Guest

By Dr. Volker G. Hildebrand, SAP

Everyone believes that rapidly advancing technology is changing the game, but that’s only half the challenge businesses face. The more significant challenge is this: Digital customers are changing the rules.
Armed with smart phones and tablets, today’s customers are digitally connected, always on, socially networked, and – as a result – better informed and more empowered than ever.

Let’s make no mistake: They are in control! They live their lives ‘in the moment’, updating their relationship status, interacting with their friends, and sharing their likes, dislikes, and opinions. Their expectations are on the rise and they can instantly share their experiences with your brand with anyone. They can become your loudest champions, or
they can expose your weaknesses to the entire digital world.

So the question is, are you ready to deal with that?

Experience shows

In the age of the digital customer, the balance of power has shifted. Every company needs to figure out how to remain relevant to their customers and to leverage the game changing technologies themselves to stay in – or, even better, win – the game. In this new world, the customer experience is the competitive battleground upon which relevance and long term viability will be determined.

Before we talk about technology (in particular whether traditional CRM systems can still help companies not only to stay in the game but change the game to their advantage) let’s follow Steve Job’s advice: “You’ve got to start with the customer experience and work back toward the technology – not the other way around”.

Last year I co-authored a book with Reza Soudagar and Vinay Iyer entitled The Customer Experience Edge. We interviewed executives at hundreds of companies and many thought leaders around the world to gain insight into the phenomenon of customer experience and how successful companies transformed their business and became customer experience leaders in their industry. We found out that there are four distinct qualities that customers value and that companies need to focus on in order to create a differentiating customer experience:

1)   Reliability: The most fundamental quality of customer experience is reliability. That goes for the quality of your products and services. If a customer can trust that your products will work as specified, will arrive on time, and that your services will meet their expectations, you’re on your way to delivering a great customer experience.  But if the shelves aren’t stocked when the promotion hits the street or if you can’t deliver on your promise the customer experience turns sour.

2)   Convenience: Customers also want to know how you can make their life more convenient. They want simple and fast interactions, anytime, any-place, and on any device. They may want to order online, call to cancel a service, check promotional offers or the availability of a product on the go, tweet about a problem they are facing with your product, or they prefer the shopping experience in a store – or they want a combination of all of the above. In short: you got to be where your customers are and make their life easier.

3)   Relevance: Customers want you to be relevant; they are not interested in irrelevant offers, promotional coupons after they made a purchase or any other time when they don’t need them, and they are not interested in products or services that don’t meet their needs. If you don’t understand your customers’ needs and wants – in the moment when it matters to them – you are irrelevant or, even worse,  simply annoying. Relevance is all about personalized offers at the right time and at the right place.

4)  Responsiveness: Last but not least customers want you to be responsive if they have a question or any issue that needs to be resolved. They don’t want to listen to music while being put on hold in a call center and they don’t like an eight hour time window for a service technician to show up. Responsiveness is about getting their problem fixed and being used to instant gratification in our new speed-driven culture they expect this to be fast. Responsiveness is also about being agile and reacting swiftly to market dynamics – if you miss key trends that are important to your customers, it can quickly be game over.

I have to admit, this is shockingly simple, no secret wisdom. What is even more shocking, though, is this: most companies get it wrong. And in the age of the digital customer, these simple qualities have become more critical than ever.

I’m going to leave you with that for today – but only for today. There’s much more to say about how the executives we interviewed have gone on to rethink and deliver the kinds of experiences that ensure the relevance of their companies to their customers. Stay tuned; I’ll follow up with that discussion in a day or two.


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How Finance Can Find The Capacity To Leverage the Cloud

Richard Barrett

This is a post from a series that SAP commissioned from Steve Player, who runs his own practice, The Player Group and also heads up the Beyond Budgeting Roundtable in North America,  reflecting on how innovations such as mobile, cloud and in-memory computing are helping to transform planning and performance management.

In the previous post I noted that most planning departments consume 77% of their time in gathering data and administering the budgeting, forecasting and planning processes.

This leaves only 23% for value-added planning work such as identifying ways to close performance gaps, monitoring competitors’ actions, and developing strategic recommendations for innovation and growth.

An easy way to visualize this situation is to think of a large work room with a big workbench. Most of this room is filled with boxes of materials. On top of the bench, over three-fourths of the surface is covered with boxes of materials and things related to work, but the materials are not necessarily in the right place to be efficient. While the workers want to produce good results, their work space is shrunk to less than one-fourth of the table. Most of their time is spent trying to make sure they are working with the right materials, moving things around, and trying to make sure they are working on the right things. They desperately want to be productive but their process and tools make this very difficult.

The last 10 years have seen a steady growth in innovative technologies that are solving this problem. Currently, they go under the broad banner of packaged planning applications or enterprise performance management solutions. One of the specific advances from a technology perspective has been cloud computing, which is broadly applied to the use of computing resources that are delivered as a service over the Internet. IT publications are flooded with the origins and nuances of different cloud approaches. For finance teams, it is enough to know that cloud computing helps you “stop doing dumb stuff.”

If you have heard me speak or followed my writing you know I strongly believe current finance practices are filled with dumb stuff we are regularly asked to complete. Stopping these things creates tremendous capacity (at no additional costs). Simply put, cloud computing is freeing the capacity of planning departments to become more effective. Let me share five quick reasons why this is happening:

1. Speed to implement — Cloud-based planning solutions are faster to turn on and get up and running. The time to value can be dramatically quicker. For the planning department, cloud computing means quicker support.

2. Lower upfront cost — Since the cloud allows you to add users as required, the front-end costs are much lower. You can also avoid the front end cost of hardware and software. This stretches funding to provide planners with more firepower to support line managers.

3. It is flexible – It allows organizations to test the water and prove its planning processes before committing large costs. Cloud technology enables planning agility, enabling many small experiments.

4. Latest releases are deployed seamlessly by the vendor — This eliminates the need for scheduling IT involvement as well as finance time. Planners can stay focused on planning rather than adapting to vendor upgrade schedules.

5. Cloud costs are treated as an operating expense rather than a capital cost — This provides greater flexibility to use capital investments for direct revenue producing assets. Leading edge planning departments know that discretion over capital spending is a leading driver in future success.

All these things have the effect of clearing a lot of workspace that can be focused on high value-added activities.

Next time our topic shifts to how you should use this new capacity: “Harvest Time is here.” It discusses how Big Data/in-memory computing is expanding planning and forecasting capability.


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