Part 2 Request for Proposal- RFI RFP for Middle-office Risk Software

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Part 2 of 3 Blog Series

 Part 2 Middle-office Enterprise Risk Mgmt. ERM Etrm Software Request for Information- RFI & Request for Proposal-RFP Considerations:

In today’s competitive commodity energy trading and risk management C-ETRM software system vendor space vendors are accustomed to responding to a variety of Requests for Information-RFI and/or Request for Proposals -RFPs for enterprise risk management and commodity trading risk systems. That being the case, it is important to define certain criteria that should be included along with important features and benefits that are sometimes overlooked when entities are soliciting quality risk management systems.   With a host of options, features, functions and architectures available in the risk system software space there remains some important technical, middle-office high-level features, benefits and functional areas that one should consider in a RFI- RFP proposal for a quality enterprise risk management ERM software system:

1. Technical – Risk systems are the nucleus of any organization and they must be able to easily hookup to and integrate with existing internal and external source for an ERM implementation to be successful. RFI RFP questions that should be ascertained should key in on the underlying technologies ability to easily integrate.  Hint: Look for C-Etrm or risk management software that has middle-ware technology built in for "Ease of Integration."  
2. How easy is the software to use and maintain? Hint: Look for newer technologies that are formula and template-driven. Templates are  the easily Configured with no coding needed Vs. Customized- with coding needed to meet unique needs; this will drastically lower the cost of implementation and allow the product to easily manage future change
3. Security- Is the security and audit features of the product in compliance with our internal security, risk policy and audit protocols?
4. Does the platform offer risk process and policy automation in the form of programmable work-flow controls
• Will the system electronically support your risk policy and processes, for example a trade of a certain size needs risk management sign-off- can this be automated via work-flow
• Will the system based on a credit check alert breaches with dynamic alerts
5. Look for advanced Middle-office Risk Management Metrics and systems that offer the ability to easily use any formula:
• All @risk metrics 
• Gross Margin @risk
• Value at risks - Variance Co-Variance, historical Monte-Carlo Simulation
• Total Potential Exposure -TPE
• Potential Future Exposure -PFE
6. Credit Risk Management Software features
• Formula-Driven Credit Scoring
• Credit Value at risk
• Netting
• Advanced counter party contract management
• Dynamic alerts - Mentioned earlier
7. Risk Reporting-
• Is the reporting engine all web-based
• Is the C-Etrm ERM framework compatible with Microsoft Office (import export capability)
• Does the system offer an internal Adhoc reporting capability
• Does the system require coding and/or do I have to  purchase a third party report writer (ex. Crystal reports) to get reports generated
• Does the ERM system offer a simple means for generating reports, for example template-driven means (no coding needed) 
• Does it offer advanced reporting capability like business intelligence -OLAP cube reporting capability
• Can the reporting architecture easily meet Section 728 of the Dodd-Frank Act Swap Data Repository -SDR reporting requirement without the need for coding changes

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