10 Ways to Know if You’ve Outgrown Your CTRM System
October 07, 2019
CTRM systems were developed to replace spreadsheets and home-grown systems that commodity trading companies were using for trade and risk management. CTRM and ETRM systems make managing commodities easier and more cost effective (and therefore more profitable) and provide a single system for your front, middle and back offices. Legacy CTRM systems tend to be transaction-based, which fills a lot of the gaps but leaves most commodity trading companies still relying on spreadsheets.
In fact, according to a survey of over 100 medium to large manufacturers, 92% of companies use complex pricing structures and 100% of them manage pricing fully or partially in spreadsheets. More than 95% of the companies we have spoken to run some or all of their commodity risk on spreadsheets.
Are you still relying on spreadsheets to fill the gaps, despite having a fully-implemented CTRM or ETRM system? If so, maybe it’s time for an upgrade.
Is it time to upgrade your CTRM system?
Ask yourself these ten simple questions to determine if it’s time for you to upgrade your CTRM software.
- Does your CTRM system have access to real-time data, so you can make decisions based on what is happening in the market now, not yesterday or last week? In fast moving markets, you need to make decisions quickly, but also wisely. You cannot afford to spend days or weeks collecting and analyzing data only to discover that markets have moved again while you were analyzing the data. Real-time data delivers informed insight when you need it, without delay.
- Does your CTRM software connect your entire supply chain? With a modern CTRM system, you no longer need to manage all the complexity of commodity management in multiple systems. You can manage the entire lifecycle of your commodities – from inventory management and logistics to trade capture and credit risk to risk management and P&L attribution – on one platform. You have the complete picture at all times, ensuring all analyses use the same accurate, real-time information.
- Can your system provide an accurate, current view of P&L in real time to enable better financial control for your business? P&L attribution in commodity businesses is complicated. A lot of different factors contribute to P&L, and many of these factors are interdependent. Data is typically maintained in multiple systems. Many companies are forced to spend hours (or days) collecting the data to determine what is impacting P&L, and they still end up with a large unexplained bucket. An accurate attribution of P&L is essential for your business to have a clear understanding of what is driving profits.
- Is your system using artificial intelligence and machine learning to derive deeper insights? Advanced algorithms analyze large amounts of data faster and better, delivering actionable insights to enable you to make better decisions in near real time.
- Does your system use natural language processing (NLP) commands? NLP commands enable quick onboarding of new team members and make creating insights easier for your entire team, ensuring you always get the analyses and reports you need quickly and easily.
- Can you create your own reports without requiring assistance from your IT department or business analysts? In today’s fast-moving markets, you need the ability to analyze data on demand, without waiting hours or days to request a report, wait for the report, and analyze it. You need answers now, not days from now.
- Does your system provide full mobile access? Some CTRM systems provide mobile access to select reports, which is great if that’s all you need. But what happens if there is a market disruption and you want to run simulations immediately? You must wait until you have access to your computer to access the full functionality of the system. That means your analyses will be delayed, and you may lose opportunities or incur more risk.
- Does your CTRM system access real-time data from Refinitiv, Bloomberg, weather feeds, etc.? You need a full and complete picture of commodity markets, not just information from internal systems. If your CTRM system operates with just internal data, or collects external data but not in real time, you will always be operating without understanding the whole picture.
- Is your CTRM system cloud native? The benefits of cloud-native systems are significant, including the lower cost of implementations, quicker implementations, and ease of upgrading systems. Cloud-based systems also enable on-the-go access and ensure your data is safe.
- Can your CTRM system be easily modified, expanded, extended when your business changes? One of the biggest challenges legacy CTRM users face is ensuring their system works for their changing business. Legacy CTRM systems often require long, expensive implementations, and upgrading them is both challenging and expensive. But, that’s not true with modern CTRM systems. Modern CTRM systems can be modified, expanded and extended quickly and easily – at very little cost.
What is a modern CTRM system?
A modern CTRM system takes advantage of the latest technology to help you run your business more effectively. It is cloud-based, for faster implementation and real-time, on-demand access. It uses advanced analytics, with artificial intelligence and machine learning, to enable faster, better insight. It provides full mobile access, so you can get the answers you need when you are in your office or on the go. And, it has a user-friendly, easy-to-understand interface, for faster, easier adoption.
A modern CTRM system is less expensive and can be implemented in half the time of legacy CTRM software, but it delivers twice the functionality – with real-time access to data from across the value chain so you can make better decisions faster.
Mary DeFilippe spends her days creating engaging content – blogs, white papers, articles, and more – that helps readers better understand new technology. She can frequently be found walking around the office listening to heavy metal music while pondering ideas for her next blog.