2020 was a year of rapid change in the commodities industry. A recent Gen10 article explored the major challenges of 2020 and how the industry is responding to them, and now we consider how CTRM systems will need to adapt to keep pace with these market changes.
1. CTRM system flexibility
There has been a trend towards greater CTRM system flexibility for some time, but this is likely to accelerate rapidly. Commodity producers, traders and buyers have all spent recent years making their operations as efficient as possible to drive profit margins, and have been gradually identifying the need for technology that supports this efficiency. But as businesses have rapidly increased flexibility in their operations over the last year, many have found that they urgently need to see this sort of flexibility in their technology solutions too.
2. Supporting agility
Businesses were forced to increase their agility to survive in 2020, and they need technology that can adapt and support this agility so that future opportunities can be seized as they arrive. CTRM systems should be more adaptable, in terms of both development and in adjusting existing features without large-scale costs or long-term projects.
Whether organisations need to improve processes to improve customer satisfaction, scale their operations or pivot into new asset classes, 2020 has proven that the need can arise quickly, and that the organisation can respond rapidly to it, so their technology needs to do the same. After all, if an opportunity is spotted but building the technical capability would take over a year, the opportunity may be diminished or lost before the organisation can respond.
3. Connected technology
Commodity management apps and other technologies that support CTRM systems with additional features are becoming more widely known, as well as faster and easier to implement. CTRM systems therefore need to be more open than they have been in the past. They should integrate with other technologies to provide the exact functionality their clients need, rather than constraining clients to working within system limitations.
Modern commodity management systems such as Gen10’s CommOS are designed to be flexible in their own right and integrate with other systems as clients need, but older CTRM systems that have not kept pace with this collaborative way of working will need to allow clients to make use of additional integrated technologies or risk becoming obsolete.
4. Logistics management
One of these additional features that will be increasingly important is the ability to manage shipping and logistics alongside the areas CTRM systems traditionally manage. This can have a significant impact on agility, as all business areas have access to the same real-time data and can make better-informed, faster decisions.
Integrated logistics management speeds up contract processing significantly, meaning your teams can do more with less, as well as providing greater agility in times of crisis. For example, when borders close unexpectedly (as has happened several times in recent weeks), operators have a clear overview of affected shipments, locations and contracts to form contingency plans. And those working with clients can provide up-to-date assurance of actions being taken, so that strong customer service and effective internal processes are maintained even during challenging periods.
5. Better data
Another vital competency that many CTRM systems need to expand to meet client demand is the ability to get usable information out of the system in useful and insightful reports.
Real-time reporting creates significant, far-reaching advantages for teams across the organisation; traders can check credit lines before beginning negotiations, operations teams can create the most profitable allocations, risk managers can create accurate hedges without interrupting trading teams, and management have a complete overview of their group positions at all times.
Even for CTRM systems containing reports that update in real time, it’s important that the data can be reported on in other systems too, again meaning that systems integration is crucial. CTRM users may, for example, need to aggregate data from a range of sources in dedicated Business Intelligence tools, a feature that will be of growing importance in future as it is predicted that big data will be key for commodity traders’ futures.
And as well as sharing data with other internal systems, CTRM systems will increasingly need to act as tools for sharing data with external partners. From buyers creating full supply chain transparency to systems that enable repo deals to take place in minutes, organisations are already reaping the benefits of fast and accurate data sharing. Businesses that are not developing these projects for themselves will therefore still find themselves needing technology that enables them to meet the data demands of their partners and to keep pace with a rapidly changing market.
6. Cloud technology
Whilst there are reasons why some organisations prefer to host their CTRM on their own servers, the coronavirus pandemic has highlighted many of the advantages of cloud technology. Cloud security allows your people to log in from any device wherever they are, and modern cloud systems allow your people to manage their role 100% within the CTRM.
Cloud technology can also be implemented and maintained remotely, meaning that organisations can quickly implement new CTRM systems or additional functionality (often at a much lower cost than for an on-premise solution) and they have access to the latest version as software is updated.
7. Working with clients
Commodity organisations have adapted rapidly over the last year and the CTRM landscape is changing to accommodate this. As clients define new paths and processes for their business, CTRM providers need to understand how the way they want to use their technology will change and how their CTRM system can support this change.
Providers that can work closely with clients to deliver solutions personalised to the organisation will help the client create a lasting competitive advantage and the provider become a partner for continued growth. CTRM providers who can’t offer this personalised service and work closely with clients may well find themselves learning just how easy it now is for businesses to replace CTRM systems that no longer meet their needs.
If your CTRM system is not showing signs of moving with the times in these 7 trends, Gen10 are here to help. As well as complete cloud CTRM systems, we offer a range of commodity management apps for different asset classes to help you get more from any CTRM.
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