To avoid the three hidden costs of the morning spreadsheet (see our previous blog entry), there are four things worth looking for in your selection of a tool.
The first is that the structure of an auction order is defined once, not every morning. A trader who has to specify the shape of the order each day, however quickly, has not really left the spreadsheet behind. A tool worth its name allows the desk to define how its order is constructed; which assets feed in, how they aggregate, where the prices come from — and then leaves that structure in place, updating only the numbers as the forecasts and prices change. The morning task collapses from rebuilding the order to checking it.
The second is that data arrives by integration, not by download. Forecasts, prices, production plans; whatever feeds the order needs to flow into the tool of its own accord. If the daily routine still involves saving a CSV file from one system and uploading it to another, the problem has been relocated, not solved.
The third is that the desk’s view of its position matches the way the desk actually thinks. A wind operator with assets in three bidding zones thinks about wind across zones, and about each zone across asset types, depending on the question being asked. A tool that forces a single fixed hierarchy onto the desk will eventually be circumvented by a spreadsheet sitting alongside it. A tool that allows the desk to aggregate and disaggregate freely; by asset, by region, by route-to-market, by whatever dimension wants consideration, earns its place by reflecting the desk’s own logic.
The fourth is that the tool catches errors before they reach the market. Volume limits and sanity checks are the safeguards that prevent costly fat-finger errors.
Ask yourself, when selecting a tool: Does the desk have to rebuild the order, or merely review it? Does data arrive, or does someone fetch it? Does the position view bend to the desk, or does the desk bend to it? And does the tool object to bad orders, or does it leave that work to the trader?
