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UNUS PRO OMNIBUS, OMNES PRO UNO
A ComTechAdvisory Whitepaper
DESIGNING THE CTRM OR CM THAT CAN
HANDLE MULTIPLE COMMODITIES
Most firms that trade, produce or sell commodities have a requirement to support many different
commodities. For example, metals smelters may also need to track some form of energy
commodity fuel as well as the metal commodities that they deal in, or a food & beverage firm
may need to manage multiple agricultural commodities as well as metals and energy for the
manufacturing and packaging side of their business. A lot of trading or merchant firms will also
trade multiple commodities and groups of commodities. Yet, there are also many firms that
specialize in a specific commodity like Coffee or Cocoa, for example. Furthermore, while some
will need to manage physical commodities and their supply chains, others will need to only deploy
financial commodity management capabilities. It is, of course, this diverse group of prospective
firms and industry segments that CTRM and CM vendors are marketing their solutions to.
In the past, being a CTRM vendor meant ensuring
selling licenses to new and existing users along with
support & maintenance and other services. Now the
emphasis is on subscriptions and recurring revenue of
course. Due to revenue recognition rules for software
licenses and just the nature of the market, revenues
tended to be ‘lumpy’ and somewhat difficult to forecast.
In order to hedge their bets and increase the size of their
potential market, vendors would add capabilities for
other commodities, different geographies and industry
segments. As their product footprint grew, the solution
software would expand in scope and in the number of
lines of code becoming increasingly difficult to manage
and increasingly difficult to test and deliver as bug-
free code in the process. Furthermore, the vendor’s
knowledge of its own software would be entrusted in
the hands of a few staff who were greatly in demand
across the entire business making it even more difficult
to meet customer expectations, constantly update and
enhance the software and/or support that software at
the customer site.
Users would become rapidly familiar with this situation
and chose to sometimes not update the software for
fear of introducing new bugs and having their operations
disrupted. They would then run the risk of falling further
and further behind the latest versions of the vendor’s
solution until essentially they had an old and unsupported
version of the software installed. Others would try to
keep pace with the vendors’ releases, which through
the necessity of adding new customers, creating a
broader market and keeping up with industry changes,
would be 4-6 or more releases per year. Eventually,
they too would fall behind, unable to keep up with all
the changes that required testing and implementations.
This is a familiar story to anyone in the industry. There
are many businesses that are running multi-commodity
CTRM solutions in older versions unable to upgrade to
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