CTRM / CM as an Architecture A ComTechAdvisory Whitepaper acceptable degrees of latency, depending on role. For example, near real-time position reporting, or PnL, may be required at different levels and by subject to different criteria; while the need to perform stress testing or run complex statistical simulations such as Monte Carlo VaR or similar will occur less regularly on an intraday basis or potentially overnight.
/ Different views on profitability to avoid circumstances where traders are paid a bonus on a profit that evaporates once all commercial activities are transcribed to the company’ s books.
There are many other examples of these types of problems and many potential solutions have been devised to address them; however, we’ ve not yet seen any single solution that adequately addresses the breadth of complexities that are found in what is known broadly as the CTRM or CM market.
Throughout, the twenty-year history of the software category, the perceived“ Holy Grail” has often been to bring to develop a singular comprehensive solution- one that covers all( or at least the most common) commodities, geographies, supply chains, and assets. Unfortunately, experience has proven such a solution to be more or less impossible to commercially achieve and support- and yet, there is still a lingering sense in some corners of the market that this remains the ultimate goal. Though many lessons have undoubtedly been learned as some vendors( and a few market participants who invested in bespoke solutions) tried to build the singular solution that could address any prospect’ s needs, ComTech now believes that the“ Holy Grail”- a singular, monolithic Commodity Management / CTRM solution that addresses all commodities and markets – is almost certainly impossible to commercially achieve and, frankly, is ultimately less than desirable. Rather, the most reasonable approach is an architectural approach – one that combines specific modules or individual products that can address the specific needs of an individual company and the market or markets in which they operate. It is our thesis that CTRM / Commodity Management is, and should be, an architecture first and foremost- one in which specific technologies and solutions are deployed to solve the litany of complex problems faced by today’ s market participants.
EVOLVING NEEDS
ComTech analysts have followed the development of ETRM / CTRM / CM software over the last two decades and observed that a single software solution servicing multiple commodity classes is simply not the way to go, even if that solution is marketed as“ highly configurable”. Instead, we feel that the problem needs to be dissected in a different way and looked at architecturally.
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