Electricity wholesale market platform company M-co, also called the Marketplace Company, has been on an adventurous journey towards service-orientated achitecture (SOA). It is set to become a web-service enabled organisation, with the aid of internet-based trading system, Comit.
M-co is a provider of key services, such as information systems, pricing, clearing and settlement, to the New Zealand Electricity Market (NZEM). When the deregulated market launched in the early 1990s, M-co was established to design, build and operate this deregulated market.
Dan Lee, CIO of M-co, spoke at a recent CIO lunch.
“Two years ago, we didn’t even know what a web service was,” he said.
What the company did know was that it needed to get data to customers faster, he said.
Based on 260 nodes around the country, M-co delivers 411,840 prices per day — forecast prices, dispatch prices, five-minute prices and final prices — to electricity companies, as well as the other interested companies, the Electricity Commission and the public. M-co also delivers approximately two million schedules per day and 500,000 other records, says Lee.
“Electricity is a very complex commodity. We have to balance supply and demand in real time,” he says.
“Why did we choose web services and SOA?” Lee asks. “Because it is ‘open’, because we wanted to move to XML, and, hey, it’s sexy, it keeps the staff happy. It also pulls the industry out of the dark ages.”
The old information-pull mechanism was replaced with an XML-push mechanism, gaining on average 45 seconds per file sent.
In the worst case scenario, it could take ten minutes to deliver files using the old pull mechanism, says Lee.
M-co is now a web services-enabled company. The revised revenue is 100% better than the forecast and the SOA is spreading to other areas of the business. But Lee points out, the journey has not been easy.
“The project was 15 months late and the costs were $100,000 over budget. And staff time-savings — forget it.” he says. “You will spend two to three times as much on staff.”
“But overall, because of the revenue that we got, our total NPV [net present value] still worked out to be the same. So, financially, the project turned out to be pretty much bang on,” he says.
Because M-co was an early adopter of web services there was no one to turn to for help, Lee says. The team had to do many short-term work-arounds.
In the end, M-co had to do work-arounds for each and every customer, due to lack of interoperability.
“But, once the hard work is done, the rest is easy. We have the experience now, and the tools are really good. Just make sure that you have got skilled staff.”
He says that M-co has learnt a few lessons from the project.
“Check what your customers’ toolsets support — not what yours do. Never believe the marketing hype. Be flexible and collaborate with your clients. After all, you can’t do it on your own. It’s all about teamwork. And get the right people. Experience is everything.”