Founded in 2016 by commodity trading and technology experts Alex Chandy and David Corthorn, Texas-headquartered 2DA Analytics has developed software that enables optimal real-time scheduling decisions in commodities, capable of saving 15 cents per barrel in crude and refined products operations.
Intending to provide users with a virtual data scientist at their fingertips and integrated into their workflows, 2DA recently launched its first cloud-based platform, BAYZYEN, which has been built specifically for commercial teams operating in oil value chains. Here, Corthorn shares more on the company with HC Insider.
HC: First, can you tell us a bit about 2DA – what does the business do?
David Corthorn: 2DA reduces its customers’ operational expense by leveraging modern data analytics delivered in a simple-to-implement, leading-edge SaaS application. Our first product, BAYZYEN, is built specifically for commercial teams operating in oil, and is a data and analytics SaaS application that enables teams to work concurrently on short-term planning, scheduling, and optimisation. Everyone can be in the system at the same time, contributing, and it replaces the use of disparate, siloed, and massive spreadsheets, historically used to create a unified view of movements, inventory, and supply and demand. BAYZYEN creates that unified view by ingesting the disparate data then displaying it intuitively, and even allowing users to interact with the data to devise optimal scenarios and schedules.
Many companies in the petroleum and products space still rely on those spreadsheets, with data keyed in manually from dozens of other sources and systems, for financial and operational information on which to base commercial decisions. The amount of time taken up gathering, inputting, and analysing that data, as well as the potential for introducing errors, means decisions risk being made based on old or incorrect information. Our experience with our charter customer suggests that 70% of our target users’ time is spent on data munging – pulling data together, making sense of it, and making it coherent. And yet, still, only one-fifth of the available data is currently used in decision-making, resulting in limited insight.
BAYZYEN works as both an operational cockpit and a control tower, facilitating better decision-making based on much better data. The 15 cents per barrel savings are realised through the efficient aggregation of data combined with better, real-time decisions.
HC: What is your background, and how did your career lead you to this business?
DC: I started my career working in the oil industry as a chemist at Mobil Oil, and after the Exxon merger, I joined BP in 2000. I spent five years there, initially in the middle office as a risk analyst in what was Commercial Refining & Trading, and then as a gasoline trader in IST. I became light ends book leader at a Swiss trading house focused on blend components and aromatic intermediates and then a naphtha and condensate trader at RBS Sempra. I relocated to Australia in 2010 where I joined Accenture as Asia Pacific lead for the commodity trading and risk management practice.
I spent a lot of time in Northeast and Southeast Asia working with state-owned oil and gas companies, and a wide range of other commodity-focused companies across the region. I saw the same issues coming up time and time again. The operational folks, who were having to ensure that deal economics were realised and the right scheduling and trading decisions were made, were relying on inadequate toolsets with functionality gaps; they were relying on Excel. They needed to find ways to employ the data available to make better decisions.
I had worked closely with Alex for some time – he had been based in Houston with Accenture for seven years. We both left in 2016 – after years of moaning about the state of the technology in the industry, we decided to do something about it.
HC: What have been the highs and lows of the 2DA story so far?
DC: The first thing we did was build an initial user experience prototype, which articulated our product vision, and we took it around the oil companies based in Houston, Dallas and San Antonio. Not one turned us away and instead they said if we could build it, they would buy the service.
We then needed data to build out the product and bring it to life, so the next stage was to secure our first customer and use their data to start to build the application and quantify the benefits. Our first charter customer, a Fortune 30 oil refiner in the United States, gave us access to their data set and their people, which included three full-time schedulers then working with more than 120 different spreadsheets. That was unquestionably a high point.
On the other hand, we have learned that selling into big enterprises takes a long time. The change process in those organisations and the reality of the fact that introducing our software means roles need to change is a challenge, because people that have spent many years working in a particular way will need to transition. That requires real visionaries and leadership. We’re getting better at identifying those leaders – their “tell” is often a burning desire to uncover the known unknowns. The people aspect is critical to adoption of tools like ours.
The tightrope of start-up finances has been another steep learning curve. This is not mass consumer tech. We do not have millions of users, so getting people to invest in this space has been quite challenging – we have a niche market in terms of the number of customers, but the value we can bring to those businesses is truly significant.
Finally, another real high has been working with really creative people and coming up with this new product. I have always had a genuine love of data visualisation and have been lucky enough to work with some superstars in that community. The majority of our design and development work has been done in Austin, Texas (home of SXSW) – the experience to date has been super-inspiring.
HC: Where would you like to see the business in five years’ time? What are the biggest opportunities for growth?
DC: We currently have one customer, another two starting trials, and five in active pursuit – all of which are large enterprises. We are excited about providing tangible, quantifiable business savings to these companies. We are also excited to evolve the software around solving for our customers’ pain points around accessibility to data and smarter decision making.
Right now, we have a laser focus on downstream oil in North America and Europe and creating a network effect in that market. Then we see opportunities to take our solution and apply it to other commodity value chains.
We believe that our solution can, in part, enable an orchestrated and responsive supply chain. We have started to partner with asset operators, market intelligence providers and other trailblazing startups to improve data quality and richness so we can provide our users with critical information when they need it.
We are committed to creating a true omnichannel experience to overcome the challenges of data accessibility. Not just a web interface, BAYZYEN will provide different ways for our users to ask questions of their data. For example via a bot in their favourite chat client to answer a specific questions without having to navigate to the appropriate screens. A mobile app will enable the users to view critical alerts and notifications during their morning commute, allowing them to prioritise what they will work when they get to the office. Via voice, BAYZYEN will be involved Triangle meetings or Supply, Refining & Trading calls providing latest volumetric and economic planning assumptions.
Information has always been of great value in commodity trading, but while market intelligence has seen much progress, internal intelligence hasn’t evolved. There is a substantial competitive advantage in being able to make better and quicker decisions; companies can’t rely on the old ways of working for much longer.