Software and services: The one-two punch for the energy industry
As the third largest industry within the United States, the energy sector can be tough to navigate. With an ever-growing consumer demand, advancements in technology and a rise in the amount of data acquired, supply companies can be left feeling daunted by even the simplest of tasks. With over 50 years of combined experience in the energy field, ESCO Advisors has the answers to many of the questions senior executives ask themselves when running operations and risk.
Founded in 2011 by a group of industry professionals, ESCO Advisors has since become the leader in retail energy supply managed software solutions and consulting services.
The company’s philosophy is simple, yet effective: grow energy supply companies by reducing overhead and increasing efficiency, margins and profitability by leveraging expertise.
“Off-the-shelf solutions like ours are far more advanced than companies who have tried to build their own,” said Jon Parrella, chairman and founder of ESCO Advisors, during a recent interview.
With a driving vision and entrepreneurial spirit, Jon Parrella and his brother Michael Parrella—CEO of ESCO Advisors—are growing the energy supply industry one company at a time.
From consultations to integration
Prior to founding ESCO Advisors, Jon Parrella founded and operated a retail supply company. At the time, the market had much less competition, and as a smaller company Jon Parrella was able to compete with the larger companies.
As the field began to fill with competitors, the company was sold and Jon Parrella began to do consulting work at the request of industry executives.
“I started working with one of the larger suppliers at the time alongside my previous VP of Sales (now VP of Sales at ESCO Advisors), just working on IT and sales consulting,” said Jon Parrella. “We then looked at each other and said, ‘Why consult with just one company when we can consult with many?’”
And, so, ESCO Advisors was born, with the company broadening its consulting services to sales and marketing departments, brokerage network development, IT architecture and risk management.
“We started to take on more and more suppliers and we had to bring in additional expertise,” continued Jon Parrella.
Two years later, the company launched its first product and discovered a niche within the marketplace that wasn’t fulfilled by others. In 2014, at the request of Jon Parrella, Michael Parrella joined ESCO Advisors to optimize the company’s operations and run the company from its headquarters in Danbury, Connecticut.
“We were able to complement each others’ skills,” shared Michael Parrella.
By responding to the challenges that every energy supply company was facing, clients began to roll in for ESCO Advisors.
“Having been in the client’s shoes with my previous company, I was given the ability to see where there were voids in the marketplace and where there was opportunity,” said Jon Parrella.
The company now has two main products, one for customer and broker relationship management, and a demand forecasting system for managing risk. In conjunction with a billing system, these two systems provide the ability to automate the operations and risk of a retail supplier, optimize staffing, and ensure access and visibility to data is simple and efficient.
A competitive advantage
Jon Parrella’s previous success with his retail supply company is definitely a factor for the insight ESCO Advisors has for its clients. ESCO Advisors is able to build solutions based off of knowing what works best rather than having to endure a learning curve.
“A lot of the time, we build a product in anticipation for what the client requests,” said Jon Parrella. Knowing what a client needs is a specialty of ESCO Advisors and one the company prides itself on.
The second ingredient for ESCO Advisors’ recipe for success is offering not only state-of-the-art software, but services as well. The majority of the energy industry still relies on Microsoft Excel spreadsheets to collect and interpret data, but as Michael Parrella puts it, “that’s a thing of the past.”
“Once you get to a certain size of spreadsheet, it’s not going to work,” explained Michael Parrella. “The amount of data you have to work with is too massive and inefficient to make business decisions. We provide an efficient and scalable service.”
After working with more than 40 clients, ESCO Advisors has seen what does and doesn’t work and has best practices that others simply don’t. By remaining focused on the systems and services they provide, along with the highest degree of professionalism, ESCO Advisors has the competitive edge that keeps clients returning for more.
Implementing continuous improvement strategies
“If anything is true, that is,” answered Michael Parrella when asked if continuous improvement strategies were in place at ESCO Advisors. “We are constantly putting pressure on ourselves to improve in every way—from our products to our interactions with clients.”
ESCO Advisors is a strong believer in there always being room for improvement, and the company doesn’t follow a “rinse and repeat” model, but rather a “rinse, review and improve” one. In addition, ESCO Advisors has implemented performance measurements into its software to improve the quality of forecasts and the data transmitted to clients.
“We measure for accuracy every day for our clients, and if something goes wrong, we look into it, fix it and build a solution into our systems,” said Jon Parrella.
Customer feedback is integral to the success of ESCO Advisors and the input received from clients is integrated into product updates and system procedures.
“You really get the best of breed in our software that not a lot of people have access to,” added Jon Parrella.
ESCO Advisors has taken a different approach than most Software as a Service (SaaS) companies when it comes to hosting the application that has helped them grow quickly. ESCO Advisors works with Adapture to run a managed hosted solution that costs a quarter of the price of hosting in the cloud, while still allowing for the ability to architect a solution specifically designed for disk I/O.
“With the amount of data we need to process every day, it was critical to architect a solution that was scalable and fast,” said Michael Parrella. “We have been able to grow quickly without having to have the IT overhead to manage our servers, and make sure we always have the latest and fastest equipment available.”
Marketing through education
It should come as no surprise that ESCO Advisors offers distinguished software. But while those who are used to traditional models might fear overcoming technological hurdles, ESCO Advisors takes an aggressive approach to client care.
To aid suppliers avoid the pitfalls of the energy industry, the company assigns dedicated analysts and support representatives to each client.
“If a product is too difficult to use and your customer is not trained on it properly, they’re not going to use it,” said Jon Parrella. “If you thoroughly engage them with the product and show them the benefits and efficiencies of using it, you provide a much better working relationship and receive higher customer satisfaction.”
Product education is something that ESCO Advisors takes seriously. As a member of CCRO (The Committee of Chief Risk Officers), Jon Parrella and the organization are assembling a white paper on the best practices of risk management for the retail energy industry that is expected to be released within the next six months.
Following the release, the CCRO plans to offer continuous education based off of the white paper in a school environment where ESCO Advisors will be a main educator.
“It’s something that we take a lot of pride in after working hard to build the credibility to be able to do that,” shared Jon Parrella.
After extensive growth in such a short period of time, one can only begin to imagine what lies ahead for ESCO Advisors. What we can expect to see during the next 12-18 months is continuous expansion.
With plans to open an office in Houston, Texas and venturing into the natural gas sector and other vertical commodity opportunities where risk is inherent and predictive, ESCO Advisors is prepared for whatever comes its way.
“We are at a huge advantage thanks to the services and expertise we offer,” concluded Jon Parrella. “Most suppliers either haven’t realized it yet or are just beginning to, and we’ll only continue to grow.”