Collaboration is an essential ingredient for success in the digital age, as we explored in a recent whitepaper. But for the business to work better through collaboration between teams, their technology also needs to be collaborative. With many different business functions all using technologies that meet their specific needs, and every organisation using unique processes, one single commodity management platform cannot power every aspect of this collaboration.
This is where commodity management ecosystems come in. A commodity management ecosystem is an interconnected network of technologies and apps that allows you to use the most relevant features of each, whilst still sharing data and collaborating across systems. It empowers your organisation to create technology that provides greater functionality than a traditional CTRM, with an ability to tailor the technology to your organisation that is usually only seen in a custom-built solution.
And unlike building a custom CTRM in-house, the apps and technologies that underpin the ecosystem mean that you do not need to develop a new system from scratch. You can further develop and integrate the apps without the cost, time and resources needed to create a completely new commodity management system.
Creating a commodity management ecosystem, either from scratch or by building on the technologies that are working for your business, allows you to capitalise on the most relevant features and benefits of a range of technologies, and with Gen10 apps means that you only implement the technologies that you actually need.
An ecosystem of Gen10 apps
Building a commodity management ecosystem around a CTRM or ETRM
Many commodity traders manage most or part of their operations on spreadsheets or other offline tools, often even those who are using a CTRM. These spreadsheets introduce the risk of errors and omissions, cause delays or inaccuracies in reporting and can lead to significant other risks if people inadvertently work with multiple versions of the same document or make changes that affect other users.
Example
A utility company uses an ETRM to manage their power plant and energy trading. The ETRM does include some commodity management features but its strength lies in the operations that occur after the boiler, leaving the procurement team relying on spreadsheets. The procurement team work well with the support they have but are slowed down by lengthy delays in gaining approval for contracts, and the administration time to manage contracts and supplier certifications.
This inefficiency does not only impact on the procurement team; it means that operators at the boiler spend more time verifying the fuel and assays, and for biomass in particular, ensuring the right sustainability and greenhouse gas emissions criteria are met. It could also impact on the profitability of energy trading as opportunities for the best purchase prices may be lost if the business cannot move quickly enough.
In this example, the business is benefiting from the ETRM and do not wish to disrupt their other operations to replace this ETRM with one that provides more procurement support. This is where a commodity management ecosystem can provide real benefits to the business. The procurement team can choose the apps that they need to improve their processes, which in this case may simply be a contract management tool, or they may decide to add fast deal capture and supplier audit apps too.
The real advantage of this ecosystem approach compared to a standard technology implementation is that the apps the team implement are integrated with the existing ETRM and other technologies. For example, if the deal capture app is used to record a deal quickly on a mobile device, this information automatically populates in the contract management app so that the trader can add additional information and create the contract at their desk, without re-entering information. The apps also feed positions into ETRM, ERP and other software for a complete audit trail, reduced workloads and fewer errors.
Implementing technology to improve the procurement process therefore not only benefits the Procurement, Legal and Sustainability teams whose work is made easier by using the new commodity management app. The ecosystem makes collaboration across the organisation possible, reducing administration, workloads and errors in the processes that span teams and allows the different business functions to work better together.
Creating a new commodity management ecosystem
For businesses looking to completely replace a CTRM or ETRM, the commodity management ecosystem can again provide an advantage over traditional commodity management technology. Because a commodity management ecosystem is composed of many interconnected apps that all provide distinct stand-alone functionality, the roll-out of a new ecosystem can be carried out in stages to minimise business disruption and generate buy-in to the newer, more efficient processes before the next app is introduced.
And because the apps are integrated with each other and the wider technology ecosystem, they provide all the benefits of sharing data, improving collaboration and reducing risks and errors by acting as one integrated system. As well as automating data sharing and reducing administration, the fact that Gen10 apps are online and collaborative means that there is an audit trail of every action undertaken in an app and that risk reporting can be carried out in real-time, without needing to wait for end-of-day reports. The collaborative nature of these apps means that data can also be shared across the supply chain or used to populate external documents such as contracts and shipping instructions.
Every commodity business is different and has different requirements from its technology. Commodity management apps allow you to speed up processes and get better results from your existing technologies by providing the building blocks to create a commodity management ecosystem that is specific to your business, no matter your current level of technology adoption.
If you’d like to find out more about creating your own commodity management ecosystem, explore these three scenarios and the commodity management apps that could support the businesses in each example.
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