CTRM systems were created in the 1990s to help commodity trading companies – primarily oil companies initially – navigate the complexities around regulations, rates, terms and conditions of the sale and transportation of fossil fuel products. These first ETRM/CTRM systems were designed for a different time, with slower data flows and more narrow trading markets.  Commodity trading companies relied on after-the-fact accounting and reconciliation and used spreadsheets to aggregate data for analysis.

Today, markets move faster and so does data. Thanks to modern technology, real-time data, and advanced analytics like AI and machine learning, today’s traders have the tools to make smarter, faster decisions.

1. They do not provide real-time insight on demand, 24 hours/day, 7 days/week. Legacy CTRM systems rely on scheduled reports and teams of analysts to create and run reports to deliver to management at specified times – end-of-day, weekly, etc. Today’s markets move faster, and users need to respond to these events quickly – before opportunities are lost or risk increases. Legacy systems add unnecessary delays.

2. They only deliver insight on a small part of your business. Legacy CTRM systems work in siloes, without any insight beyond trading and risk management. Modern commodity management provides end-to-end visibility into the entire commodity value chain, enabling a deeper view of the business and the impact of events beyond the scope of a trading and risk. Modern technology can aggregate and analyze data from across the entire value chain – from farm to fork, refinery to petrol station, or mine to manufacturer. This enables decisions based on the entire business, not just a snapshot from one piece.

3. Decisions are made with outdated information. To eliminate the problem of siloed data requires filling the gaps. This usually entails using spreadsheets, and much time is spent aggregating and analyzing data manually. This creates latency between events and the analysis of events, forcing companies to make decisions based on data that can be days, or even weeks, out of date. By the time decisions are made, the market could have changed again and risk increased or opportunities lost.

4. Decisions are made with bad information. Spreadsheets are easy to use, versatile, and inexpensive, but manually aggregating and analyzing data in spreadsheets often results in errors – importing data incorrectly, copy/paste errors, errors in formulae being used. When companies make decisions based on bad data, they cannot hope to make the best possible choices.

At the end of the day, all these points lead to one overreaching problem: with legacy CTRM systems you aren’t making the best possible decisions and you aren’t making decisions fast enough. You need modern technology, powered by cloud, mobile, and AI/machine learning to stay ahead in volatile markets.

Learn how to turbocharge your C/ETRM system quickly and easily.