Multi-commodity ETRM ’ s are becoming too expensive A ComTechAdvisory Whitepaper
THE ETRM CONUNDRUM
Throughout , the twenty-year history of ETRM and CTRM software , the desired “ Holy Grail ” for many participants in the industry has often been to develop a singular comprehensive solution - one that covers all ( or at least the most common ) commodities , geographies , supply chains , and assets . While such a solution was seen as providing significant cost benefits , experience has unfortunately shown that building and maintaining such a solution as a singular application is more or less impossible to commercially justify . In a recent white paper 3 , ComTech stated that it “ now believes that a singular , monolithic Commodity Management / CTRM solution that addresses all commodities and markets – is almost certainly impossible to commercially achieve and , frankly , is ultimately not 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 .”
Among the reasons for taking this position are :
1 / Given that many of the physical energy commodities are fundamentally different in terms of their physical states , transportation or transmission modes , commercial processes and requisite physical assets , designing and maintaining a singular monolithic solution becomes commercially unsupportable as those markets change and users ’ requirements evolve to reflect those changes . In particular , gas , power and liquid hydrocarbon markets have each undergone tremendous change in the last decade however , many of those changes have been regional in nature and user requirements within each of those markets , even for the same commodity , will have great variability .
2 / The physical assets involved in the production , processing and transportation / transmission of a physical commodity must be accurately modeled to properly reflect the commercial processes involved in marketing or trading of the commodity . These complex requirements are difficult to model and maintain in a singular commodity-specific solution , and the complexities increase exponentially ( and may in fact may create functional conflicts within the system ) as additional commodities are “ shoe horned ” into the mix .
3 / Experience has demonstrated that no purportedly multi-commodity solution actually provides complete functional support “ out of the box ” for any given specific physical commodity . These same experiences have shown it is increasingly apparent that a commodity-specific solution will be better able to provide deep and wide functional support for the producers , marketers and traders of that commodity and that commodity ’ s supply chain . Deploying such a dedicated , focused solution can reduce implementation
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CTRM as an Architecture , Commodity Technology Advisory LLC White paper , 2017 © Commodity Technology Advisory LLC , 2018 , All Rights Reserved .