Reports Allegro CTRM Value Study Report 2014 | Page 14

CTRM Value Survey and Analysis Benefits and Costs to be Considered When Calculating ROI COSTS BENEFITS Value of reduced headcount costs across business process or possibly switch from direct full-time internal staff costs to variable, on-demand external headcount costs via use of third party consultants Reduced operational risks via saved penalties and fees as a result of reduced errors in areas such as scheduling, Invoicing and payments Reduced cost of credit and credit facilities due to better management of both cash and credit –this is on both sides in offering and receiving optimal collateral to support actual trading needs Reduced FX costs due to better management of FX and reduced need for FX conversion Ability to optimize trading data costs – i.e. consolidate and reduce Bloomberg, Reuters, and other data feed requirements? Improved Market Risk Management – improved hedge performance, improved decision making, etc., yielding improvements in P/L, MtM, and cash management and reduced exposure to negative credit events such as margin calls. Improved counterparty relationships as a result of more timely confirmation and settlement – improved market reputation will reduce costs of finding and negotiating agreements with counterparties Reduced technical and business maintenance and workaround costs vs. replaced system Improved identification of trading opportunities resulting in better results Improved visibility into current performance reduces management and external (banks, shareholders) anxiety which in turn has an impact on capital requirements and staffing Improved ability to forecast business performance potentially reducing capital requirements and improving stock performance Improved auditability and controls reduces chance of compliance issues and decreases costs of an audit. Improved tracking of payment terms and slow payments resulting in faster cash collection or trading decisions – i.e. no trade, buy only etc. Marginal ability to attract better quality staff Copyright 2014 Commodity Technology Advisory llc Initial license fees or incremental ongoing service or rental fees vs. the similar costs of replaced system License fees for add-on modules or ancillary software such as database solutions Support & Maintenance costs – incremental vendor S&M contract cost and internal staff vs. similar costs of replaced system Additional fees – escrow for source code etc., if higher than replaced system Estimated procurement costs (cost of personnel, facilities and equipment involved in the identification, testing, and contracting of the software) Implementation costs including both internal and external costs related to human and technical resources for data conversion, training, integration, and testing Costs associated with parallel testing/usage during UAT Periodic upgrade project costs Internal hardware costs including maintenance – live, test and other environments Operational issue costs as a result of software deficiencies – if any Work around costs (man hours, software, custom development) – if any Cost of on-going or periodic training 14