Global Agriculture Trading Company Improves Decision-Making with Eka CTRM
Agri-businesses trade in highly competitive and volatile environments. Farmers, originators, traders, and manufacturers that manage agri-commodities such as softs, grains, oilseeds, livestock, and dairy, face dramatic fluctuations in prices daily. To maximize profits, agriculture companies need to know positions and exposures in real time. They understand exactly how commodity price changes affect operating margins to take appropriate actions.
A global trading company was using accounting systems (SAP) along with Excel spreadsheets for its reporting requirements. This process required considerable manual effort for commodity trade capture, shipments, settlements and other activities. Reconciliation of several custom-made Excel spreadsheets from different users was difficult and time consuming. Long reporting cycles did not provide real-time information and inhibited decision making.
The existing system did not provide enough insight into counterparty risk exposures and risk reporting. It did not produce proper daily/month-end reports, especially on vessel P&L and other physical and derivative P&L. The company needed a solution that could provide real-time data, advanced analytics, and enterprise-wide transparency.
The amount of manual effort required to create reports,and the lack of real-time information, were hampering effective decision-making. Commodity business contracts/shipments/settlements were sub-optimally recorded and tracked and, in many cases, duplicated across systems. There was no proper counterparty risk tracking, risk management and related reporting.
Company decisions were based on outdated reports, thereby impacting their effectiveness. The homegrown reporting process was inefficient and not standardized; tying up resources and increasing costs.
Inducting new employees into the organization was difficult since the company was using several custom-made spreadsheets.
The company adopted Eka CTRM to track business transactions (contracts/shipments/invoices etc.) and minimize duplication of information across multiple systems. The solution manages and optimizes the entire commodities value chain, including trade capture, logistics, invoicing, and settlement. The organization is also using real-time position and coverage visibility to manage exposure across physicals and derivatives, and advanced analytics to drive more profitable business decisions.
A seamless integration with SAP increases efficiency and productivity by automatically posting invoices, end-of-day results, counterparty data, and other information.
The system records and tracks counterparty risk and helps establish trading risk management. It provides real-time position and coverage visibility to manage exposure across physicals and derivatives.
The implementation process was quick and didn’t require a heavy IT investment or add to IT infrastructure and service costs.
Decision making has improved since the company has access to a real-time scenario and intelligence capabilities.
The solution posts AP and AR invoices, EOD results, and counterparty master data directly from Eka to SAP and updates payments/ receipts against the AP/AR invoices from SAP to Eka. Thus, it eliminates the need to create SAP journal entries, saving time and eliminating duplicated efforts.
The system also makes it easier to induct and train new employees due to a standard system and easy-to-use screens and functionalities.
Because it is a cloud-based solution, it is accessible from anywhere, anytime, on a secure internet connection in a SaaS mode. It is also easily scalable and has the elasticity to add new business users as and when needed. The company will not face any service disruptions or bear any additional costs to upgrade the underlying hardware/softwared.
Eka CTRM has helped the company improve operations, save costs and reduce redundancies by tracking everything in a single system.