Top 6 Reasons for Upgrading Your CTRM Platform

Companies typically evaluate upgrading their CTRM software platforms when new or changing business priorities require them to adapt to markets, products, economic conditions, and business opportunities, or to comply with policies keeping them up to date on the latest software. 

At these inflection points, CIOs and their teams are tapped by executive leaders to drive new innovation in these platforms. This often start with an evaluation of their incumbent CTRM platform’s ability to deliver on these new priorities.

The decision to upgrade a CTRM platform is influenced by key functional concerns like:

Modeling new business requirements

Adapting to technologies such as Artificial Intelligence, Machine Learning, and Cloud

Automation of common tasks via Robotic Process Automation

Faster, more accurate reporting via performance improvements

Optimizing overall functionality to comply with market requirements

Reducing cost of ownership with cloud or hybrid cloud deployment

Key Benefits a CTRM Upgrade Can Deliver

Whether you’re implementing a light upgrade, with Value Creed providing technical support and guidance to internal teams, or a full upgrade where our experts handle everything, these three key values are crucial to keep front of mind.

Quantitative Benefits

Above all, companies assess the costs of a CTRM upgrade against the quantitative benefits of upgrading their commodity management software. By putting numbers to the project, managers have a better sense of what resources they’ll need, including:

Qualitative Benefits

CTRM improvements involve qualitative benefits that improve the overall function of their platform. The advantages companies gain from effective CTRM upgrades often reveal themselves over time.

Some of the qualitative benefits companies seek in their CTRM solutions include:

Commodity trading and risk management relies on getting the right data to the right teams—and keeping data out of the hands of bad actors. These qualitative improvements ensure that only the right people utilize said data.

Download the Net Present Value Calculator to Evaluate Your CTRM Upgrade Viability

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3 Keys to a Successful CTRM Upgrade

The decision to upgrade your CTRM requires high consideration, cross-functional buy in, diligent oversight and the right vendor partner to ensure flawless execution.  There are three keys to consider as you select the right partner. 

CTRM Upgrade Project Timelines

Choosing the right upgrade partner is paramount to staying on budget and delivering on time.

Careful Testing Of Platform Customizations

Diligent testing of custom workflows ensures extensions and class events have successful quality assurance.

Making The Right Choice In a CTRM Vendor

Seek a vendor with customer successes and a proven process for mitigating risks.

Learn Key Lessons from Value Creed to Ensure CTRM Upgrade Success

Upgrading your CTRM platform is inevitable.  Listen to this video and learn how you can ensure success by addressing the risks with an informed perspective.  

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CTRM Upgrade Successes

At Value Creed, we’ve seen the impact a successful CTRM upgrade can have on service commodity companies. See the results for yourself in the following case studies.

Ready to Explore Upgrading Your CTRM?

Leverage a partner with best-in-class functional and technical expertise to manage and deploy your upgrade on time and on budget.

Upgrading your CTRM is a natural next step for business users, yet many teams evaluating this move are hesitant due to the potential for business disruption, cost overruns and new demands being placed on their in-house staff.  These are real concerns, but there is a better way.  
 
In this pre-recorded 30-minute educational event, we invited special guest Manish “Manny” Neupane, Director, ETRM Applications with Capital Power Corporation to share  his learnings around his efforts to build a business case, get it funded and streamline implementation.  Value Creed’s Jason Parks, Senior Consultant and Principal CTRM Consultant, who has lead over half-a-dozen upgrades, also shares his best practices for overcoming common challenges and alleviating the risk of project mayhem.
 

When you can, take a few moments and explore these key points:

#1. There’s not enough room in the budget to justify CTRM Horizon 145

#2. The risk of disruption to daily, business-critical functions is too great

#3. Upgrades come with a lot of uncertainty; therefore remediation and UAT testing can be extensive

#4. It would cause too much strain on our in-house staff to manage testing and remediation the right way

#5. After go-live, if application support is needed, there’s no resource that’s accessible on-demand

Play Video

A Commodity Trading & Risk Management Application is a complex system which is required to manage OTC and exchange traded deals and positions of different commodities (crude oil, power, natural gas, natural gas liquids, refined products, emission, and agricultural products) along with physical delivery and management of risk (market, credit and operational) facing the trades in the market. Before making a decision on which CTRM application to select, organizations must first assess their needs and then decide on the basis of the features of a CTRM application. Typically a CTRM system consists of 4 broad functions – Front Office, Middle Office, Back Office and Administration – which are aligned with each other.

Front Office

  • Trading (Input, View and Modify – OTC and Exchange Based Trades)

  • Pricing/Deal Structuring (Formula Based Pricing, Secondary Costs, Deal Level Pricing Simulation)

  • Trade Capture (Pre-deal Analysis and Credit Check)

Middle Office

  • Trade Confirmation (Batch Validation)

  • Credit Exposure – Analysis & Monitoring (Credit Ratings, Counterparty Risk, Physical and Financial Exposure)

  • Risk Exposure – Analysis & Monitoring (Market Risk, VaR, Options Greeks, MtM, PnL, Simulations)

  • Legal Analysis & Monitoring

  • Pricing Information using Pricing Curves (Market Price Data, Volatilities, Correlations, Forward and Exchange Curves)

  • Commodity Scheduling (Mode of Transport, Blending, Back to Back, Washout, Memo Sale, Circle Trade, Inventory Management and Reporting, Demurrage, Actualization)

Back Office

  • Contract Administration (Force Majeure, Jurisdiction, Incoterms)

  • Trade Settlement and Accounting (Invoices, Confirmations, Accounts Payable and Receivable Postings, Tax, PPA, Financial Closing)

  • Trade Workflows (End of Day Processing and Reporting, Trade Validations, Options Exercise, Trade Price Fixing)

Administration

  • Reference Data Management (Counterparties, Portfolios, Traders, Schedulers, Risk Managers)

  • Setup and System Administration (System Setup, Security Groups & Audits, Products and Locations Configuration)

  • Static Data

  • Automation of Workflows (End of Day Run, Risk and Credit Exposure Monitoring)

Selecting a CTRM Application requires deep professional analysis of the clients business and then aids them in choosing a CTRM Application which caters to the needs and requirements of the clients and aligns with the long term goals and targets of the organization to attain maximum ROI.

Our highly skilled Commodity Consultants at Value Creed with experience of working with the leading CTRM Applications globally help you determine the ‘as-is’ and ‘to-be’ situation of your current business functions and provides you expert advice on which CTRM Application will suit your needs. We design the RFP and act as a negotiator between client and the CTRM Application Vendor. Thus you get the maximum out of the minimum investments.

To know more on how Value Creed can be a process guide while selecting a CTRM Application which can add value to your business partner with us today.

CTRM software systems become obsolete every time there is a change in technology, a new market regulation or amendment in the current structure. More complex trading and risk management strategies become the need of the hour to keep pace with your competitors, especially when you want to penetrate different markets and engage in multi commodities and expand your line of business. But before you think of a system upgrade, you should ask yourself the 3 W’s – Why, What and When before making any decision, as upgrading a large CTRM software system costs you somewhere between $1-2 million per the implementation specialists.

WHY Upgrade

  • When you want to take advantage of the changing technology (cloud based, big data or blockchain) and increase your performance and eventually ROI.

  • To get benefits from new user friendly features, bug fixes and automation of critical business process to save time and money.

  • To enjoy benefits of the services provided by the CTRM software system vendors and make your system more compatible with new enhancements.

  • To adhere to regulatory reforms and avoid any operational risks arising from non-compliance.

WHAT to Upgrade

  • Old versions – which may be no longer compatible with other, connected applications either in-house or out bound.

  • System performance – which may have been reduced due to increase in trading activities and large data flows in the system.

  • Processes – performed manually, but which are now automated and are available in the new version of the CTRM system software.

WHEN to Upgrade

  • When you want to diversify your commodity portfolio and enter new geographies or expand your line of business.

  • There is a change in regulations or a new regulation is introduced.

  • A new strategy or complex deal pricing mechanism needs to be embedded into the system.

  • Large amount of data needs to be integrated to profit in a world of shrinking margins.

  • Operational losses are increasing because of manual processing of some businesses – critical processes like mark to market valuations, trade validations, batch processing or EOD processing.

CTRM software systems are complex and it becomes necessary to follow the advice of expert commodity consultants and developers to drive you smoothly through system upgrades while you focus on your core business.

At Value Creed, we take pride in delivering successful system upgrades for our clients in commodity markets. With a team of highly skilled and professional consultants with a cumulative experience of 80 years, we provide expert functional and technical support in CTRM software system upgrades.

Considering a CTRM software system upgrade? Partner with us to know more about how we can help you achieve your business goal and targets, on time and well within budget.