CTRM/ETRM – Build or Buy? Do You Really Need to Choose?

CTRM vendors argue that building your own CTRM or ETRM system is a mistake. In many ways, they are correct. If you are talking about traditional CTRM or ETRM software, then building a system from scratch is an expensive, time-consuming, challenging task. But, these arguments are also outdated. With today’s technology, you can have the best of both worlds. You can create a custom system by picking and choosing the functionality you need from a collection of commodity-specific apps developed specifically for the complexities of modern trading.

ComTech Advisory surveyed 100+ commodity trading companies and asked if they would choose to build a CTRM/ETRM solution or buy one. 70% of respondents said they would at least explore building a custom solution despite the abundance of commercially available options. The question remains, with all the CTRM/ETRM options available, why are commodity trading companies still considering custom solutions?

The top five reasons for building internally are all about ensuring the CTRM/ETRM system provides exactly the functionality a company needs:

1. A custom solution gives you total control over functionality – you can build exactly what you need

2. No vendor knows your business requirements as well as you do. An out-of-the-box system won’t fit your complicated business

3. You can avoid generic functionality by building a custom solution that fits your business

4. Your business is just too different for a one-size-fits-all solution

5. IT prefers creating a custom solution to implementing a commercial solution

Notice the theme that ties all these points together: commodity trading companies consistently worry that the software they purchase won’t meet their needs. Whether it’s a lack of specific functionality, the complexity of their business, or the concerns of their IT department, they all worry that the software will not deliver. What they want is a solution that can be designed specifically for their business – the complexities, intricacies and unique challenges only they face.

Just as there are valid reasons to create your own custom CTRM system, there are equally valid reasons why you should buy one. Companies surveyed gave six top reasons, the top five ranking as very important:

1. You are not an IT organization

2. A custom system is too costly to build

3. Keeping a custom system current to requirements would be challenging

4. It’s impossible to free up business resources to create a new system

5. There are adequate commercial solutions available to purchase

6. By the time it’s delivered, requirements may have changed

Again, these answers all point to one concern: building the functionality you need in the timeframe you need it is just too difficult. Creating a sophisticated CTRM/ETRM system to address all your commodity management needs requires specialized IT skills and resources. Keeping the system running requires IT resources to constantly monitor changing technology, and changing business requirements, and update the system as needed. It’s expensive, time consuming, and difficult.

Learn more about the evolution of digital commodity management. 

Eka delivers the best of both worlds. Eka’s app-based solution was developed specifically for the complexities of commodity management and enables you to create a custom system without building it from the ground up.

Eka’s Digital Commodity Management Platform breaks traditional CTRM/ETRM systems into small components, so you can pick just the functionality you need. Traditional CTRM systems have an all-or-nothing framework, so you purchase the system and pay for the functionality whether you will use it or not. Eka’s app-based platform enables you to add functionality quickly and easily later, as your business grows, so you always have exactly the CTRM/ETRM system your business needs. It delivers the customization you need without requiring your IT team to spend weeks or months building a custom system.

Eka’s cloud-based platform has prebuilt connectors and goes live in just a few weeks at a fraction the cost of traditional CTRM implementations. Eka’s 60+ apps extend far beyond just trading and risk management. Eka’s apps connect the entire value chain – including sourcing, trading and risk, operations, supply chain, and downstream – helping boost performance with real-time insight, custom alerts, and advanced analytics.

Best of all, you do not need to replace your existing system. If what you have works, but you just need to enhance the functionality, you can add Eka’s apps to your existing system and boost performance quickly and easily.

If you can’t find exactly what you need in our app store, Eka’s platform enables you to build your own apps. Our platform comes with open APIs and is pre-seeded with algorithms and workflows specific to commodity trading, so you don’t have to start from scratch to build your own applications.

Use our plug-n-play platform to create exactly the insights you need – it’s quick, easy, and cost-effective. Maximize ROI from existing systems by extending their functionality seamlessly, while reducing the time and cost to build significantly.

One of the world’s largest sugar producers in the world was expanding its business. The central risk management team realized it was getting harder to get a consolidated view of the company’s risk portfolio because derivatives were being managed from nine different entities using nine different systems.

They knew they needed to manage their risk differently. They needed to centralize their derivative operations to generate one, consolidated view of position to better manage risk.

The company explored upgrading their two-year-old CTRM system by adding derivatives to it, but their CTRM could not support derivatives, even with a custom build. Implementing a custom solution wouldn’t work because that would take over a year to develop. They needed a system that could scale with their business but could be implemented quickly.

Eka’s app-based system delivered exactly what they needed. Eka’s Derivatives app provides end-to-end management of exchange traded and OTC derivative contracts and enables the company to integrate their physical product with derivatives, boosting their ability to manage derivatives across multiple entities in several locations. It also connects seamlessly to their legacy CTRM system.

Eka delivered a suite of six apps: Derivatives, Position, Mark-to-Market, Hedge Accounting, Physical Trades, and Risk & Monitoring. The apps went live in just 8 weeks.

Read the case study to learn more.