OW Industry: Energy

Trading & Risk Management

Commercial Optimization

Oliver Wyman is trusted advisor to senior management on numerous strategic topics in trading, particularly in commodities:

Strategy, Business Development & Interface - Optimal and competitive growth path from current footprint

We are helping clients to define and implement a global growth strategy with the aim to double trading margin over a five year horizon. Other engagements typically include the optimization of sales strategies and business models, repositioning of marketing departments to optimize the value creation as well as transfer pricing and group/trading interface design development.

Operations & Processes - Efficient front-to-back processes

In a recent client engagement we streamlined front-to-back processes resulting in immediate savings of more than 10%. Additional digitization measures are expected to yield at least an additional 20%. The typical focus areas include optimization of asset management or supply and operations, optimization of key marketing processes, (re-)design of key trading processes as well as alignment of Group/trading unit steering processes.

Middle Office - Effective trading risk management and risk control

Most recently we helped clients to prepare for MiFID II regulation. Other key solutions we offer to clients are related to risk framework design and implementation, hedging framework development and optimization, risk function re-organization and risk cultural transformation, governance model design and internal/external regulation.

HR, Compensation, Finance and Back-Office - Strong and competitive support functions

We help our clients to transform and steer their trading organizations to greater performance in a permanently changing environment. Our track record of engagements includes organizational (re-)design, compensation system review and design, financing and treasury strategy development as well as most back-Office optimization, incl. offshoring and robotization.

Information Technology & Systems - Lean and flexible infrastructure with quick go-to-market

Right-sizing information technology infrastructure is a challenge in trading and requires an understanding of current and future business requirements, technology and processes. Furthermore, Oliver Wyman's ability to provide an independent view on implementation solutions has been critical in achieving optimal value solutions for our clients. Some of our recent engagements include risk and trading IT architecture vision design, review and definition of system requirements, ETRM system selection and implementation as well as back-office system selection and implementation.

Holistic offerings along the trading value chain - Building competitive trading organization at right sophistication level and scale

Leading companies have entrusted us with holistic transformations that include the set-up of trading entities, commercial and operational performance benchmarking, larger-scale transformations for commercial effectiveness as well as operating model redesign and post-merger integration.

Risk-Adjusted Decision Support

We have an extensive Enterprise Risk Management track record of supporting the energy sector and industries with substantial commodity and capital risk exposure in risk-adjusted decision making:

Risk strategy & culture - Corporate-strategy aligned risk bearing capacity and appetite

Risk-taking behavior needs to link to strategy and account for critical boundary constraints. We help clients in terms of definition of risk bearing capacity and risk appetite, risk capital charging mechanism, structures for optimal risk financing (risk transfer vs. risk retention), and initiatives to instill risk culture as well as facilitations of organization-wide communication.

Risk identification & quantification - Aggregated view on key economic risks and understanding of contributions

We help clients by identifying and prioritizing key economic risks in risk registers, backed by our proprietary analytical toolkit. It comprises a multitude of applications to support mitigation, steering and capital allocations, e.g. risk metrics, portfolio aggregation, stress tests, scenario modelling.

Risk management & control - ‘Three-lines-of-defense’ concept with clear risk ownership

At the heart of risk-adjusted decision making is the set-up of risk operating models for management, control and compliance, incl. processes, roles & responsibilities, organization & governance, performance management as well as risk leadership development.

Risk mitigation & optimization - Optimal risk financing and transfer solutions

We help clients in the development of mitigation strategies (e.g. hedging, insurance, avoidance), the assessment of economic cost of different risk mitigation strategies and the optimization of insurance solutions (i.e. limits, coverage definition), leveraging proprietary data from Marsh.

Risk infrastructure, reporting & monitoring - Effective operational and management decision support

We are advising our clients to also consider the target risk infrastructure requirements for effective management, monitoring and reporting. This includes the design of reports for day-to-day monitoring and senior management decision making as well as the definition of system requirements.

Holistic offerings across the activity chain - Risk management as a truly value-adding activity

We are engaging with senior clients globally on strategic initiatives to better account for risk in decision making. Our activities range from Enterprise Risk Management, Large Project Value and Risk Management to training and ongoing coaching.

Trading & Risk Management Insights