Multi-commodity ETRM’ s are becoming too expensive A ComTechAdvisory Whitepaper
As a result, ComTech is seeing more procurement of commodity-specific ETRM and CTRM solutions to address the increasingly specific needs of different parts of the business. Of course, this shift in appetite to commodity-specific solutions does require a different approach for cross commodity reporting and reconciliation- business processes that can be performed either in the ERP system or via a reporting overlay. Despite the potential costs or process changes required for such aggregations and reconciliations, the benefits of having commodity-specific capabilities that best fit business requirements more than outweighs these considerations.
Recently conducted research into how users saw their current ETRM solutions only serves to emphasize the above. While most ETRM’ s are seen to have adequate trading and risk functionality, other important functions like scheduling, contract modeling and accounting are less than adequate. More importantly, the ability of these solutions to meet new requirements is ranked very low( Figure 2). It is this difficulty in staying a pace of a flood of changes in the industry that is a real challenge for ETRM.
Figure 2: 125 Global Respondents Rank the Functions of their current ETRM solution
Increasing Importance
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As set Performance Modeling & and Real-Time
Optimization Capabi liti es
Credit Risk
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Ad ap tabili ty Compliance & to New Repo rting
Requ irements
Accountin g
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Con trac t Model ing |
Sched ulin g |
Repo rting Capabi liti es |
Market Risk |
Valuation |
Efficient Deal |
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Entry |
Effective Pos itio n
Management
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Sometimes, the frustrations faced by buyers has resulted in efforts to build internally. In 2015 4, ComTech found that 70 % of all CTRM software procurers would likely consider the development of a custom solution while a third of all respondents said that they would seriously consider this option. Amongst the most popular reasons cited for wanting to build a CTRM internally were to have total control over functionality and to avoid generic functionality. However, the same respondents cited the cost and complexity of building their own solution as barriers to doing so and were also, not unsurprisingly, extremely concerned about maintaining a custom developed solution.
While once the future appeared to be about a single monolithic solution, perhaps even custom developed,
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E / CTRM Software – To Build or Buy. That is the Question, Commodity Technology Research Report, 2015 © Commodity Technology Advisory LLC, 2018, All Rights Reserved.