White Papers Leveraging the cloud for improved performance

Leveraging the Cloud for Improved Performance need to be tracked by the CTRM for pricing and settlement purposes, as well as to determine cost accruals, and in valuation calculations to gain an accurate picture of Profit and Loss. / P ricing Flexibility – The ability to calculate value via a diverse range of indexes, quality parame- ters, and deal types. This will include use of qual- ity criteria, indexes, futures, deposit terms, and much more. / P ackaging and Shipments – Depending on the commodity, it may be shipped in bulk, in sacks, bags, bales, containers, tanks, barrels, or any number of packages. This means that many dif- ferent types of product specifications and INCO terms must be handled by the CTRM solution from both a logistics perspective, as well as a pricing, inventory and financial perspective. Additionally, a commodity can be transformed from bulk to packaged during its movements, or a shipment can be broken up into smaller lots. These circumstances need to be addressed ex- plicitly within the application. / F utures Markets – Agricultural futures markets exist around the globe for most common agricul- tural and soft commodities, and will range from large long-established exchanges such as the CME to smaller regional exchanges. Some agri- cultural commodities however, have no associat- ed futures and therefore require the ability to set up specific pricing terms. CTRM solutions that address ags and softs need to offer the flexibil- ity to configure multiple trading books, each of them reflecting the hedging market to be used or a proxy of that hedging market. A ComTechAdvisory Whitepaper / I nventory – Inventories may be held in varying amounts at multiple locations and each requires management. Inventories may also be of differ- ent qualities and so choosing how to supply a specific contract or trade from inventory can take on a number of complexities and issues unique to the commodity, / S upply chain optimization – Managing complex supply chains and associated documentation and processes that may include agents, insur- ers, banks, shippers and storage, for example, not just in terms of movements, but also in terms of supplier and vendor management, estimated and actual costs and documentation. Traceabili- ty is a key requirement here as well. / F lexibility and Adaptability – Though ags & softs have been traded longer than many other com- modities, these have been primarily merchant markets in which commodities would be pur- chased at the source, transported, processed, repackaged and sold to consumer markets. With the advent of global trading markets and electronic exchanges, these traditional markets are evolving rapidly to look increasingly like fi- nancial markets. This evolution and increasing sophistication of the market participants contin- ues and impacts the technologies used by those participants. Any CTRM solution, particularly one that covers multiple commodities, should be architected and supported in such a man- ner that it can readily adapt to changing trading practices and regulations.

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