Commodity trading and risk management (CTRM) software was created in the 1990s to help commodity trading companies navigate the complexities around regulations, rates, terms and conditions, and transportation of commodities. These first CTRM systems were designed for business management in a different time, with slower data flows and more narrow trading markets. Companies buying and selling commodities used spreadsheets to aggregate and analyze data from multiple systems.
Today, both commodity markets and data move faster, so commodity trading software needs to be more agile. With real-time data and advanced analytics like AI and machine learning, companies buying and selling commodities can make smarter, faster decisions. Companies tied to old technology still relying on spreadsheets to aggregate data work at a tremendous disadvantage.
Older CTRM systems do not provide real-time insights. They rely on analysts to create and run reports at specified times – end-of-day, weekly, monthly, etc. Today’s markets move faster, and users need to respond to events before opportunities are lost or risk thresholds are breached. Manual data analyses add unnecessary delays.
Older CTRM systems work in siloes, without any insight beyond very narrow functions in trading and risk management. Modern commodity management provides end-to-end visibility into the entire commodity supply chain, enabling a deeper view of the business and the impact of events beyond just trading. By analyzing data from across the entire supply chain, you make decisions based on the impact on your entire business, not just a snapshot from one piece.
With an older, siloed system, you must rely on spreadsheets to aggregate data from different systems. Hours, even days, are spent manually collecting and analyzing data, creating latency between events and analyses of the events. You are forced to make decisions before you have a clear understanding of the impact on your business or based on data that is out of date. By the time you react, the market could have changed again, increasing your risk or resulting in lost opportunities.
Even worse, aggregating information into spreadsheets is a manual process that often results in data transfer errors. So, you could be making important decisions based on incorrect information. These kinds of mistakes are costly and increase risk.
If you use an old CTRM system without a full view into your business, you aren’t making decisions with the most accurate, current information. Therefore, you aren’t making the best decisions for your business. You need a modern CTRM system with real-time insights and visibility across the supply chain to thrive in today’s rapidly changing markets.