The Rise of Operational Efficiency

Energy prices have finally made a u-turn after 3 years of steady decline, climbing to nine month highs and putting financial pressure back onto suppliers. In an increasingly competitive market, this means operational efficiency is more vital than ever – with prices on the rise, there’s no margin for error when it comes to winning new business.

In April, when prices were at their lowest, consumer groups and politicians were demanding suppliers passed on the low commodity costs, but all struggled to pass on the full benefit. Hedging strategies and rising non-commodity costs were limiting factors, but in an article we published in April, we argued that these were really just the tip of the iceberg.

The real challenge that suppliers faced then, and continue to face now, is operational efficiency. What’s more, whilst market prices are an unknown and largely out of a supplier’s control, operational costs can be tackled head on.

The difference now is that prices are on the rise, and so it’s not a question of who can offer the lowest price, but the smallest increase. As hedges made during the historic lows fall away, suppliers will therefore need to look for alternative ways of mitigating price increases, and that means reducing their own costs.

A good example of how operational efficiency can reduce costs and improve competitiveness is Revenue Leakage – in simple terms, due to the complex nature of the energy industry, there’s an immediate 2-4% saving against turnover that suppliers can access through tighter control and management of the industry reconciliation process.

But at an even more fundamental level, suppliers that can optimise their back office functions through intelligent automation and prioritisation will directly reduce their cost to serve. By addressing each process individually, and making small improvements at every step, the cumulative effect is significant.

Easier said than done?

Improving operational efficiency is a challenge for any organisation, let alone for those operating in a complex market such as energy. And, up until now, the complexity of the industry hasn’t truly been addressed.

At ENSEK, we’ve addressed the complexity of the industry head on, and using modern technology are helping new entrants and established players challenge the status quo.

By unlocking the power of data, we’ve created a fully scalable cloud based platform that’s capable of demystifying the industry and turning operational challenges into tangible opportunities.

Want to find out how we can help your business achieve greater operational efficiency? Get in touch today on 0115 710 0180, or email us info@ensek.co.uk