Change is hard. When we are comfortable with a system, we trust it. It may have some quirks, but we know how to manage them. Changing software systems is particularly challenging for many of us, thanks to what is known as baby duck syndrome.

Why is it so hard to replace your old CTRM/ETRM system?

Change is hard. When we are comfortable with a system, we trust it. It may have some quirks, but we know how to manage them. Changing software systems is particularly challenging for many of us, thanks to what is known as baby duck syndrome.

As it turns out, software users imprint on – or become attached to – software, and then we have a really hard time letting go. We spend so much energy learning a system, we get used to it, and then we prefer to keep it even if we know upgrading to something new would be better. Of course, there are some legitimate reasons for holding on to old systems, but the penalty of holding on usually outweighs the downsides of changing.

Obstacles to change

There are valid reasons to avoid upgrading software systems.

  • You cannot afford to interrupt business processes. For example, implementing a legacy CTRM/ETRM system takes months – sometimes more than a year – and requires input from IT and other departments. Processes will be disrupted, or run less efficiently, while the new system is rolled out.
  • You invested so much in the old system and cannot afford to do it again. On-premise implementations are expensive, and it is simply cheaper to use spreadsheets or stop-gap measures to fill gaps in functionality rather than upgrading or buying a new system.
  • It takes too long to get people up to speed on a new system. When you implement new software, everyone must learn how to use it. The learning curve can slow processes down and interrupt your business. Mistakes may be made that cause problems for your business.
  • What you have works, and a new system may not. Purchasing new software, especially from a new vendor, requires a leap of faith. No matter how much research you do, at the end of the day the new system needs to work. If your current system works, choosing to replace it presents a risk.

Why change?

The problem with staying with the old system is that newer programs are usually better than the ones they replace. They use modern technology and are designed to solve today’s problems, not problems from a decade ago.

Many commodity-intensive companies have CTRM/ETRM systems that were developed 10 or more years ago. There are good reasons to explore new options.

  • Technology and markets have changed a lot, but legacy systems cannot easily add functionality. Upgrading on-premise systems interrupts operations, requires IT resources to implement, and can be expensive, difficult to schedule, and time consuming. Upgrading modern, cloud-based systems occurs behind the scenes, without disrupting business processes.
  • They were designed in siloes. Legacy CTRM systems were designed to use data created in the CTRM system – trades entered, for example. While that data is essential, there is a lot of data created outside the CTRM system that can help improve trading and risk management, such as market feeds, supply chain disruptions, weather predictions, etc.
  • They rely on spreadsheets for reporting. Because legacy CTRM/ETRM systems were created in siloes, creating reports across business units, geographies, or other factors requires aggregating and analyzing data from different systems – usually in spreadsheets. Creating reports in spreadsheets takes a long time and results in data entry and manipulation errors.
  • They are missing some of the most valuable assets for decision making – real-time data. Today, companies can access real-time structured and unstructured data from IOT sensors, social media, market feeds, weather reports, inventory containers, machinery, etc. With real-time access to all this data, you know the moment a shipment is delayed, or the second market shifts occur, so you can quickly find solutions to reduce risk and evaluate opportunities for increased profits.
  • They don’t use advanced analytics. Legacy systems don’t have the bandwidth to aggregate and analyze streams of real-time data, but modern cloud systems that employ AI and machine learning can. With the power of advanced analytics, countless volumes of data can be analyzed in seconds, providing deep insight into businesses and enabling smarter, better decisions.

What should you do?

In today’s volatile markets, simply staying the course is dangerous. Real-time data is constantly generated, and you need that current, accurate understanding of your business and the markets you serve to make the best possible decisions. Relying on systems with built-in delays ensures you are always a step behind – a situation that may not be the case for your competitors.

Eka’s cloud-native platform delivers all the functionality you need at a fraction of cost and 50% shorter implementations. You don’t have to take our word for it – visit our website to see what our clients have to say about Eka.

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