A wind operator with fifteen farms across three bidding zones does not want to construct fifteen separate bids; they want to think at the level of the portfolio, let a tool do the arithmetic, and submit a single, sensible order. Until comparatively recently, nothing in the market did this well, and so spreadsheets inevitably grew into the role.
The difficulty with this is that Excel is not, on closer inspection, free. It carries three expensive costs:
The first is an opportunity cost. A trader who rebuilds the same order structure every morning, with only the numbers changing, is spending somewhere between thirty minutes and an hour each day on work that does not, in any meaningful sense, change. Across a desk of three, that is the better part of a full-time equivalent every year, spent on the manipulation of data time that is not being spent on the more valuable work of understanding the market, making more informed decisions, and driving more profitable outcomes.
The second is the cost of error; extra zeros, a mistyped digit. But there is also a less visible kind of error, which is the structurally suboptimal building of orders because the spreadsheet was assembled at a particular moment, by a particular person, who has since left, and the logic embedded in it no longer reflects how the assets actually behave.
The third is key person risk; the person who knows why cell AG47 has the formula it does, and what will happen if anyone touches it. When that person is on holiday, the desk operates at reduced capability. And even when things are stable with your orders, there is always the risk that the exchange changes its technology and the spreadsheet, and the person, must be updated together to keep up.
If your desk is still rebuilding its auction order in Excel each morning, the three costs are being paid, whether or not anyone is producing an invoice. An intuitive, systematic tool that removes these costs and lets your traders spend more time understanding the market and adding their real value more than pays for itself.
See what to look out for in such a tool in our next entry.
