TAG leads the way by embracing a new capacity management solution with PRISMA

Fast forward to New Year’s Day 2023 and what could be described as TAG’S “Big Bang” moment will have arrived. Which is to say, the juncture in time when the Austrian TSO’s long-term shipper contracts, originally signed back around 20 years ago, will expire.  

It is a situation long in the planning and one that has ultimately led to TAG moving in an exciting new direction that has already produced an impressive string of tangible results, as illustrated above.

When those shipper contracts kicked off, it heralded a hugely productive period for the company. The TAG pipeline soon became booked at almost 99% of its capacity, securing the company’s financial position and providing the breathing space for setting in stone a long-term business plan. But, as Nicolas Terracol, in charge of Capacity Marketing and Data Management at TAG tells us, it will soon be time to step out of that old world and into the new. 

“At the start of 2023 we’ll go from a 99% booking level to a figure significantly lower than that” says Nicolas. “And this is part of a trend experienced by all TSOs away from longer-term gas capacity bookings and towards much shorter ones.” One of the reasons for this trend, according to Nicolas, is that shippers are focussing more on optimising their booking capacity, making them reluctant to commit to anything beyond mere days or weeks.

“When you rely on short-term bookings, it makes you much more dependent on your IT infrastructure.” 

Nicolas Terracol, Capacity Marketing & Data Management, TAG

The knock-on effects for TSOs like TAG present a significant challenge, not least in terms of the efficacy of their internal systems to cope with this shift in shipper demand. “When you rely on short-term bookings, it makes you much more dependent on your IT infrastructure,” explains Nicolas. “If for just one day it fails, you risk losing a lot of money. A more extended outage and the entire financial security of your business could come under threat.”

There is also the matter of increased competition between TSOs, with shippers becoming more discerning about who they choose for their capacity management requirements. This in turn has created an impetus for TAG and their industry counterparts to improve the user experience in an effort to stand out from the crowd.

“Fundamentally, our old system was developed for a way of working that is rapidly disappearing,” says Philip Stratakis, Project Manager at TAG. “We needed to move to a state-of-the-art system that’s compatible with the industry changes that we expect to continue in the coming years - and that’s where PRISMA stepped in.”

“From the start PRISMA made clear that they couldn’t perform the role of a traditional IT service provider. But what they could do is improve our efficiency through resource-saving, reduce our internal costs, and enhance the user experience for our customers.” 

Philip Stratakis, Project Manager, TAG

TAG’s early thinking on who to select as their new IT provider was dictated by a number of considerations -  one of which was sheer economic forces. And while TAG were certainly strong advocates of PRISMA’s proposal from the very beginning, the financial implications of outsourcing their IT system to a third party was one of their few reservations.

“When it came to the technical requirements for our preferred solution, our initial vision was to build an IT system that would be the property of TAG,” Nicolas explains. “Software as a service, on the other hand, was a completely new approach that would have its own impact on costs. But ultimately our judgement was that an outsider like PRISMA would provide a far greater scope of opportunities across our business.”

Indeed, TAG and other TSOs were already facing pressure from the gas industry’s regulatory bodies to seek out ways of improving their operational efficiency. It was only when the tendering process began that the advantages of PRISMA’s offering began to gain traction within the company. 

“From the very start, they made it clear that they couldn’t perform the role of a traditional IT service provider,” says Philip. But what they could do by offering software as a service is improve our efficiency through resource-saving, reduce our internal costs, and enhance user friendliness for our customers.”

It’s fair to say that TAG’s decision at the end of the tendering process to select PRISMA for their capacity management solution was the culmination of a journey with an unexpected destination.

“Our goal was to create a system that enabled a more holistic service -  from auctioning, allocating, calculating, and then auctioning again. The cycle of life, in the gas capacity world.” 

Svenja Kruse, Product Manager, PRISMA

Svenja Kruse, Product Manager at PRISMA, has been an integral part of the project since July, but also remembers how PRISMA saw themselves as rank outsiders for securing the tender from the very beginning.

“Realistically we knew there was only a small chance of TAG accepting our proposal - in fact I recall that we gave ourselves only around a 5% chance of winning,” says Svenja.

“But we applied because we’d had in mind to take on the full capacity life cycle of a TSO  for a long while. Until our collaboration with TAG, we only built the auctioning capacity and then informed the TSO after each auction on what they’d sold. But our goal was to create a system that enabled a more holistic service -  from auctioning, allocating, calculating, and then auctioning again - that put us in full charge of capacity speculation. The cycle of life, in the gas capacity world.”

The pitch was also contingent on TAG’s request that the project be split into two distinct phases - the first focussing on the development of this new back-end system, representing around 20% of the project, and the second on how the system would manage everything that happens after an auction. Running concurrently with the first phase would be comprehensive research into phase two, giving TAG the chance to appraise the partnership after phase one and decide if they wish to proceed further. 

Critically, TAG estimated that structuring the project in this way could help convince other TSOs who are also facing their own Big Bangs, but were cautious about PRISMA’s offering, to join up too - a prospect that TAG saw as essential to achieving many of the long-term benefits they had in mind from the start.

Of all the beneficial outcomes that TAG envisioned when they reviewed PRISMA’s proposal, among the most attractive was the basic economic principle of competition. If other TSOs were to join PRISMA’s service, the expenses would be shared between them, reducing costs for everyone. This gave rise to what is known in crowd psychology as the ‘penguin effect’.

“We compared it to a colony of penguins on the shore, and they all want to go fishing, but no-one dares be the first,” recalls Nicolas. “But as soon as the first penguin jumps in the water, then all the others follow. After seeing how PRISMA had reduced the risk of us being the only ones to jump, we decided, okay, let’s be the first penguin.”

“The challenge has been to bridge the two worlds and transition to more agile working as the project commences. And on balance I think we’ve done it really well.” 

Philip Stratakis, Project Manager, TAG

When it came to weighing up PRISMA’s proposal, it was also their agile working methods that came under the TAG microscope. These methodologies were emphasised heavily in PRISMA’s initial pitch, which made it clear that the processes would be based around close collaboration combined with full transparency. 

Philip Stratakis, IT Project Manager at TAG, has worked for the TSO for a number of years, and has become accustomed to working on projects for which the scope is clearly defined from the beginning.  Looking back, Philip believes that what TAG has picked up along the way could help the business grow long into the future. 

“While we’ve known how PRISMA operate having been a shareholder for many years, as a company we weren’t ourselves well acquainted at all with agile methods,” acknowledges Philip. “So the challenge has been to bridge the two worlds and transition to more agile working as the project commences. And on balance I think we’ve done it really well.”

Svenja Kruse agrees, pointing out the challenges involved for those who are new to agile methods. “When you’re dealing with these processes for the first time, and you’re told you won’t be receiving a fully rolled-out, detailed plan, it can be a real culture shock,” says Svenja. 

“Instead, we develop something over, say, two weeks - one sprint - and straight away they have access to the outcome in order to review and test it. Every single thing that we write into tickets, every small increment, passes over TAG’s table for approval, just one or two weeks before they go into development. I think that’s been a new experience for TAG, but overall they’ve adapted brilliantly.” 

“We knew they do things differently and that this would take some getting used to. But I’ve always reminded the guys that, listen, we’ve known them since 2013, and they know what they’re doing. If PRISMA says it’s fine, it’s fine.”

Nicolas Terracol, Capacity Marketing & Data Management, TAG

Nicolas Terracol was also aware from very early on that one of the keys to success would be TAG’s ability to acclimatise to, and, equally crucially, place their trust in, these new processes. 

“We knew they do things differently and that this would take some getting used to”, says Nicolas. “But I’ve always reminded the guys that, listen, we’ve known them since 2013, and they know what they’re doing. If PRISMA says it’s fine, it’s fine.”

“What I really like about working with PRISMA is that they put a lot of positive energy into everything. Whether it’s participating in monthly meetings, supporting their colleagues, or the way they tackle problems, it’s always done with a positive attitude.”

Nicolas Terracol, Capacity Marketing & Data Management, TAG

In December 2020, TAG agreed to move forward to phase two of their partnership with PRISMA. It was a huge vote of confidence for everything that had been accomplished so far - and, indeed, the methods used to reach those goals.

“The moment we saw the first product on the platform it was really amazing,” says Svenja Kruse. I remember Nicolas saying, ‘Hey we made our first baby product!’, and that’s exactly how it felt.

“I’ve certainly never worked so closely with a customer as I have on this project. Every step has been aligned and I think that’s why we’ve managed to come up with such a neat and lean solution.” 

For Philip Stratakis, working with PRISMA has been an invaluable experience. He believes that stepping outside of their comfort zone will help the company prosper for years to come. 

“We’ve learned to utilise systems, processes and methods of working that were entirely new to the company,” says Philip. “Showing that we can take on a project where the scope isn’t 100% clear, and be able to cope with that level of ambiguity, has been a massive plus-point for us. 

“And I think we can translate some of this learning into areas beyond IT systems and processes too - particularly when it comes to making decisions around using resources more efficiently, as well as continuing to improve the user experience. These have perhaps been the two biggest benefits of our work with PRISMA and we want to ensure they extend far beyond this partnership.”

A keenness to harness the experience in order to gain wider advantages is also a sentiment echoed by Nicolas Terracol when asked to summarise the partnership so far. 

“What I really like about working with PRISMA is that they put a lot of positive energy into everything,” he says. “Whether it’s participating in monthly meetings, supporting their colleagues, or the way they tackle problems, it’s always done with a positive attitude. And this is something I’ve tried to apply to my own daily work too.”

“But we should remember, the most exciting thing is that we’re not even done with this project. In fact we’re only just starting.”