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Multi-commodity ETRM’s are becoming too expensive A ComTechAdvisory Whitepaper
it now appears to be much more about specific and
appropriate expertise and functionality around specif-
ic physical commodities. Despite some inherent chal-
lenges in cross-commodity reporting and accounting,
this trend towards specific commodity solutions does
address the needs of these specific dynamic markets
and helps support; cies,
/Improved business controls, check and balanc-
es and auditability that improves stakeholder and
third-party confidence and trust,
/Reduced reliance on spreadsheets and other ad
hoc tools.
/Enhanced user satisfaction with solutions that bet-
ter meet their specific needs and a usable user in-
terface that enhances their experience of using the
software.
/Better operational risk management,
/Optimization of commodity-specific business pro-
cesses for cost reduction and/or increased efficien-
TOWARDS A SOLUTION
As the emphasis for CTRM has shifted away from primarily trade and risk management with
invoicing capabilities to a more holistic commodity-specific supply chain focus, a number of ap-
proaches to solving these issues have also emerged as follows;
1
 /ERP solutions have emerged that incorporate
trade and risk management as well as other com-
modity specifics along the supply chain. So-called
‘Commodity Management’ solutions have become
increasingly popular in the last 2-3 years as a re-
sult. However, many of these remain deficient on
the trade and risk management side requiring sup-
plemental software products be used and, they
tend to increase implementation complexity and
costs. In some instances, users take the view that
it is a more eloquent solution to integrate a CTRM
with the ERP solution based on the view that each
solves a different problem.
2
 /Conversely, many CTRM vendors have started
to add supply chain functionality in an attempt
to rebrand their products as commodity man-
agement solutions. Again, the issue is that each
supply chain is different (e.g. power trades may
be recorded in 15-minute increments while other
commodities are daily trades) and, as discussed
above, complexity and costs become an issue. Ad-
ditionally, integration is still required to the ERP/
accounting system anyway.
3
 /Many other end user firms have taken the view that
it is better to procure commodity-specific solutions
that offer the functional support required for the
trading, risk and supply chain function on the basis
that what they really require is functionality that is
specific to the commodities they deal in. This does
mean that there are commodity specific CTRM
solutions installed and the focus is on consolida-
tion of at the enterprise back office and reporting
level which by far is the more cost effective solu-
tion.
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