It wasn’t the first trade conducted on EnronOnline when itdebuted last November that CEO Louise Kitchen was excited about.Rather, it was a trade by someone who liked to handle histransactions in a casual way, what she called a “golf course”trader.” When he completed a petroleum transaction on EnronOnline’ssystem last year, Kitchen said she knew Enron’s new launch would besuccessful.
“His whole world changed as far as how he conducted histrading,” Kitchen said. “Now, he conducts 80% of his tradesonline.”
Kitchen, who steered the development of EnronOnline (see Daily GPI,Oct. 27, 1999), and remains involved innew growth markets for Enron, was keynote speaker yesterday at theEnergy RiskTech 2000 Conference in Houston. Disputing claims thatonline transactions are reducing market liquidity, Kitchen said thatin fact, online trading has expanded it.
“New players can enter the market easier,” she said. “Onlinetrading has reduced the barriers to entry” for a lot of people whomay never have traded before, she said. There’s also a growingacceptance to conducting transactions online, too, correlating topersonal use of the Internet outside of the office.
“Internet traffic doubles every 70 days,” said Kitchen. “The piegets bigger quicker. The market is expanding, not contracting. It’sgrowth. There’s been no decrease in broker payments withEnronOnline. There’s been no cannibalization of the market. That’sa great misconception.”
Quick to acknowledge the ease of use with EnronOnline’sone-click site, Kitchen was just as quick to stress that the systemis totally focused on business and the customer — not on theplatform.
“It’s the transactions, not the platform,” she said. “We werelogical about this. This system is about getting our product out therethrough a simplified transaction process. It offers another customerchoice. I’m paid on the basis of the P&L, not how the transactionsare conducted. EnronOnline offers another distribution channel,” andshe said that Enron was just as “happy” when traders used other onlineplatforms to access its market. EnronOnline recently set up agreementswith online energy trading systems True Quote and HoustonStreet (seeDaily GPI, July 13).
“This has expanded and extended our existing business,” shesaid. “But we’ll trade where the liquidity is.”
In fact, Kitchen said that EnronOnline doesn’t make any moneyper se for its parent, and it was never designed that way. Itsbiggest advantage, she said, is to offer another avenue for itscustomers. But it also will not remain stagnant. “We challengeexisting ideas. We do that a lot,” she said, and because of that,it was recently redesigned to offer more real time information,including weather, maps, news, stock quotes and trade publications.
There are still problems to be fixed. “We need to get better atlanguage,” she said of the many markets that EnronOnline servesacross the globe. “We must continue to innovate.”
Kitchen said that today, 60% of Enron’s transactions areconducted online, with more than 300,000 total transactions todate, and about 2,100 transactions a day. Trades since November1999 have totaled more than $155 billion, and EnronOnline trades 14commodities globally in 13 currencies. More than 1,100 products aretraded every day, she said.
Still, the online platform continues to learn and evolve. “We’velearned a lot of things in the past year,” said Kitchen, and mostimportant is that with the “right people,” the technology is notdifficult. But she added that EnronOnline would continue toreinvent itself to remain on the cutting edge.
“Nothing is irrelevant,” she said. “What is relevant is wherethe liquidity is.”
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