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The future of finance in the energy industry

By Simon Reynolds, Head of Finance.

Given how much the energy industry changes, and that prices fluctuate considerably, Simon Reynolds’ role as Head of Finance at Gazprom Energy goes beyond him simply being the ‘bean counter’. Key events in the market mean that Simon must act as a financial advisor to the business and help to minimise risk at crucial times. In this article, Simon demonstrates how varied and challenging it can be to work in the energy sector and gives some insight into the way that the role of finance is changing for this company.

The energy market is a challenging environment in which to operate. No two days are ever the same and factors outside of your control can really affect your day to day work. Back in March 2018, when the ‘Beast from the East’ hit, gas prices surged, the impact of which could have been significant for the business. As the finance department, it is our job to support the risk and commercial teams, but also to provide key analysis based on the data we have available. Gone are the days when all the finance team does is balance spreadsheets and provide figures to the board. Our team today is much more varied and we have data analysts sitting alongside the more traditional types of finance roles to give the business the best possible insight into situational change and the impact of changes in customer behaviour.

A new set of financial skills 

Our finance team is now taking a front seat in the overall business, rather than simply functioning as a supporting role. This transition involves taking a more strategic approach and working closely with all departments to fully understand our customers and products, as well as costs. In order to carry this out effectively, we have put data analytics at the core of our approach. With 90% of data being generated in just the last two years, it is crucial that the business understands the right data to use and what to do with it.

While analytics fuel opportunities for improved business outcomes, there are challenges that come with this approach – poor data quality and integration can end up hindering strategies and wasting valuable time. Getting the right tools to process data is the first step towards executing an effective strategy – Excel is no longer enough and our finance team has benefitted from using software such as Schematic to manage big data sets. Payment behaviour data is essential for a business like Gazprom Energy which is invoicing close to 60,000 customers each month. If we can spot behaviour patterns using data, then we can make accurate predictions based on knowledge rather than supposition and advise on, and implement, effective solutions.

International trading and financial regulations
Here at Gazprom Energy we have the added challenge of managing the finances for multiple business units across three countries – the UK, France and the Netherlands. As regulations differ from country to country, standardising processes while being flexible to each country’s needs can be a difficult balancing act. Working across different countries means that we also have to have a strong regulation team working alongside the finance team to safeguard against any legal issues, guarantee compliance and provide regular reviews on processes across a range of countries. We acknowledge that standardising procedures is often one of the best ways to drive down costs, but we also need to be sensitive to the need to be flexible depending on the country we are working with.

Team development
With a team of 46 people, many of whom have worked in several roles at Gazprom Energy, sometimes outside finance, we have a wealth of expertise and talent in the team. We focus on developing talent in the finance department and giving everyone a broad view of the business so they can see how their role supports the business and impacts our customers. If junior employees initially work in financial operations,such as accounts payable or credit control, they learn the fundamentals and can potentially move on to reporting and managing annual budgets. As a business Gazprom Energy also offers placements to university students, which gives us an opportunity to build a talent pipeline that we can tap into when vacancies become available. We have examples of people who joined us 7-8 years ago as students or in junior roles who are now fully qualified accountants running large projects and advising the business on strategic initiatives.

Future finance

The energy industry is no longer just about buying and selling gas and power – it is about serving the customer in a way that puts their energy requirements at the heart of their business. Providing them with knowledge and guidance, offering the best possible products at the right time and acting as a real energy partner is what many of our corporate customers are seeking. As the finance team, we are at the very heart of this strategy and can truly help the business to set itself apart from the competition by using our strength of knowledge to make positive changes for our customers and colleagues.

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