The $1.6 billion Commodity Trading and Risk Management (CTRM) software category continues to change and evolve rapidly, driven by the many and varied issues that those in commodity industries face. Today, the CTRM software category is being forced to move from one that is mostly about managing trading transactions after the fact (capturing volume and price, managing the delivery and then producing an invoice), to something dramatically different. Multiple issues now face those operating in the commodity industries and the confluence of these issues is driving many of the changes in CTRM software. For those who need to manage physical commodities and their supply chains, the issues are magnified further due to the complexity of tracking and managing those physical commodities with stock, quality characteristics, paperwork, movement and much more. There is more data, more regulation and more risk. CTRM software must incorporate much more functionality to support the modern supply chain.

1.
Sponsored
by
Commodity
Technology
Advisory
LLC
Houston
TX
and
Prague
CZ
www.comtechadvisory.com
What
Does
Tomorrow’s
CTRM
Solution
Look
Like?
White
Paper

2. Commodity
Management
A
ComTech
Advisory
Whitepaper
©
Commodity
Technology
Advisory
LLC,
2014
2
Table
of
Contents
Introduction
.................................................................................................................................................................
3
Delivering
Flexibility
and
Agility
in
CTRM
.....................................................................................................................
4
Generation
10
–
Building
Solutions
..............................................................................................................................
5
Agility,
Flexibility
and
User
Engagement
......................................................................................................................
6
About
Commodity
Technology
Advisory
LLC
...............................................................................................................
7

3. Commodity
Management
A
ComTech
Advisory
Whitepaper
©
Commodity
Technology
Advisory
LLC,
2014
3
Introduction
The
$1.6
billion
Commodity
Trading
and
Risk
Management
(CTRM)
software
category
continues
to
change
and
evolve
rapidly,
driven
by
the
many
and
varied
issues
that
those
in
commodity
industries
face.
Today,
the
CTRM
software
category
is
being
forced
to
move
from
one
that
is
mostly
about
managing
trading
transactions
after
the
fact
(capturing
volume
and
price,
managing
the
delivery
and
then
producing
an
invoice),
to
something
dramatically
different.
Multiple
issues
now
face
those
operating
in
the
commodity
industries,
including:
o The
need
to
process,
store
and
manage
vast
quantities
of
structured
and
unstructured
data,
o Ensuring
compliance
with
numerous
new
and
onerous
regulatory
requirements,
o Responding
to
structural
change
in
the
industry
such
as
the
exit
of
the
banks,
for
example,
o The
emergence
of
an
array
of
new
trading
instruments
and
markets,
o The
move
to
exchange-­‐based
and
exchange-­‐cleared
transactions,
and
o The
need
to
reduce
costs,
increase
efficiency
and
maximize
profits.
The
confluence
of
these
issues
is
driving
many
of
the
changes
in
CTRM
software.
For
those
who
need
to
manage
physical
commodities
and
their
supply
chains,
the
issues
are
magnified
further
due
to
the
complexity
of
tracking
and
managing
those
physical
commodities
with
stock,
quality
characteristics,
paperwork,
movement
and
much
more.
There
is
more
data,
more
regulation
and
more
risk.
CTRM
software
must
incorporate
much
more
functionality
to
support
the
modern
supply
chain.
In
the
future,
CTRM
solutions
will
necessarily
need
to
offer
users
real-­‐time
analytics
and
provide
them
with
the
tools
they
need
not
only
to
manage
and
report
transactions,
but
also
to
help
identify
trading
opportunities,
“If
you
can’t
get
a
user
to
engage,
you’re
not
providing
them
with
the
collaborative
tools
they
need
to
be
the
best
at
their
job.
If
they
aren’t
collaborating
on
a
unified
platform,
it’s
going
to
be
difficult
to
measure
performance,
monitor
activity
and
provide
the
real-­‐time
business
analytics
they
need
to
get
an
edge
on
the
competition.
That
edge
comes
in
the
form
of
intelligence,
efficiency
and
risk
control.”
Richard
Williamson,
CEO,
Generation
10
Ltd.

4. Commodity
Management
A
ComTech
Advisory
Whitepaper
©
Commodity
Technology
Advisory
LLC,
2014
4
address
operational
risks,
effectively
manage
and
optimize
supply
chains,
ensure
compliance
with
regulations
and
provide
trading
intelligence.
The
tremendous
drivers
for
change
that
we
see
impacting
commodity
markets
mean
that
all
companies
must
take
immediate
action
to
improve
their:
• Market
transparency
–
a
need
to
develop
market
awareness
driven
by
data
and
maintain
a
vigilant
eye
on
macro
trends.
Strategies
must
be
formulated
around
those
macro
trends
and
managed
on
market
data
and
real-­‐time
(or
near
real-­‐time)
analysis
of
that
data
in
multiple
formats
and
from
many
sources,
including
quite
possibly
even
various
forms
of
social
media.
• Internal
transparency
–
profit
is
made
or
lost
on
daily
decisions.
Accurate
and
timely
position
management,
risk
management
and
business
intelligence
support
are
key
to
ensure
opportunities
are
exploited,
costs
kept
under
control
and
risks
addressed.
• Regulatory
transparency
–
regulators
will
be
quick
to
move
and
once
on
their
radar,
businesses
will
be
the
target
of
scrutiny
for
a
very
long
time.
Developing
a
culture
of
compliance
and
improving
transparency
for
regulators
is
crucial
to
avoiding
punitive
and
damaging
enforcement
actions.
The
chances
of
succeeding
in
the
broader
commodity
industries
in
the
future
are
increasingly
dependent
on
the
trading,
trade
management
and
supply
chain
management
technologies
deployed
and
utilized
to
address
these
big
challenges,
including
CTRM,
data
aggregation
and
analysis,
trading
surveillance,
business
intelligence
and
reporting.
Much
like
the
traders
who
earn
their
living
in
these
unsettled
markets,
the
technologists
that
produce
CTRM
software
are
also
being
challenged
like
never
before.
Delivering
Flexibility
and
Agility
in
CTRM
The
common
factor
to
being
successful
in
meeting
these
challenges
is
to
deliver
CTRM
software
that
not
only
has
the
required
functionality
but
that
is
also
both
flexible
and
agile.
However,
when
it
comes
to
software
of
any
kind,
these
terms
are
overused
and
therefore
somewhat
meaningless.
Providing
agility
and
flexibility
is,
in
part,
about
the
technology
and
architecture
chosen
to
deliver
the
functionality.
Today,
those
applications
best
able
to
deliver
these
attributes
are
generally
highly
modular,
web-­‐enabled
applications
that
make
use
of
service
oriented
architectures.
Consideration
must
also
be
given
to
the
user
interface
to
ensure
that
it
is
not
merely
configurable,
but
that
it
can
truly
be
personalized
by
each
end
user
without
the
need
for
programmer
involvement.
It
must
also
be
graphical,
intuitive
and
engaging
to
the
user.
Finally,
the
application
must
be
able
to
deal
with
data
in
multiple
formats
and
to
help
the
user
extract
the
maximum
value
from
that
information.
However,
even
when
all
of
the
above
is
true,
it
might
all
be
for
naught
if
the
software
vendor
takes
the
traditional
approach
to
delivering
software.
In
the
traditional
software
delivery
mechanism,
a
vendor
releases
upgrades
to
the
software
periodically.
In
the
fast-­‐moving
world
of
CTRM,
there
might
be
4
to
6
incremental
releases
per
year.
Each
incremental
release
needs
to
be
tested
and
then
implemented
by
the
user
and,
after
a
while,
the
users
inevitably
fall
behind
on
the
release
cycle.
In
extreme
cases,
the
end
users
fall
so
far
behind
that
they
lose
their
support
(most
vendors
will
only
support
a
fixed
number
of
previous
versions
of
their
software).
Given
that
fact
and
the
unavoidable
conflict
between
the
vendor’s
prioritizing
of
certain
new
functionality
to
drive
sales
rather
than
meet
the
specific
needs
of
individual
customers,
the
inevitable
happens:
Users
are
forced
to
create
spreadsheet
workarounds
to
give
themselves
much-­‐needed
new
functionality.
Suddenly,
the
use
of
spreadsheets
outside
of
the
system
–
the
very
problem
that
the
new
CTRM
solution
was
designed
to
fix
in
the
first
place
–
begins
to
flourish
once
again.
Surprisingly
perhaps,
another
issue
is
the
commercial
structure
of
the
software
licensing
deal.
Most
software
has
historically
been
licensed
on
a
one-­‐off
basis
and
the
users
then
pay
a
percentage
of
that
initial
license
fee
for
annual
support
and
maintenance.
Add
more
users
and
perhaps
you
will
pay
an
incremental
license
fee.
Ask
for

5. Commodity
Management
A
ComTech
Advisory
Whitepaper
©
Commodity
Technology
Advisory
LLC,
2014
5
enhancements
and
you
will
likely
pay
an
incremental
fee
for
the
delivery
of
custom
software.
You
might
also
need
to
pay
additional
fees
for
implementation,
data
conversion,
testing
and
training.
This
model
doesn’t
support
flexibility
and
agility.
Rather,
it
simply
perpetuates
the
status
quo
that
is
described
above.
New
subscription-­‐based
models,
however,
offer
both
the
means
and
the
incentive
for
vendors
to
be
more
flexible
and
more
agile
–
and
perhaps
even
more
customer-­‐focused
as
well.
The
delivery
of
true
flexibility
and
agility
in
a
CTRM
solution
requires:
o CTRM
software
that
is
built
with
the
right
tools
and
technologies
on
the
right
architecture,
o a
user
interface
that
is
graphical,
intuitive
and
truly
capable
of
being
configured
by
end
users
without
the
need
for
programming
assistance,
o The
ability
to
store
and
manage
multiple
types
of
data
and
to
be
able
to
easily
analyze
the
data
to
identify
and
extract
trends
and
useful
intelligence,
o The
capability
to
be
deployed
rapidly
and
in
a
manner
that
allows
for
continuous
customer
feedback
on
which
the
vendor
is
able
to
act
rapidly,
delivering
enhancements
efficiently
and
without
the
need
for
long
testing
and
implementation
cycles,
and
o That
the
commercial
terms
of
the
deal
be
designed
to
encourage
and
support
such
flexibility.
Generation
10
–
Building
Solutions
Generation
10
has
been
around
for
more
than
a
decade,
quietly
building
and
marketing
solutions
for
a
broad
range
of
clients,
initially
in
the
world
of
cotton.
The
interesting
thing
about
cotton
is
its
complexity.
If
you
can
handle
cotton
properly,
other
commodities
hold
no
real
surprises,
regardless
of
whether
they’re
bulk
or
containerized.
In
2009,
although
still
a
relatively
small
and
niche
company,
Generation
10
decided
to
completely
re-­‐engineer
its
software
and
invest
in
building
an
all-­‐new
product
set
from
the
ground
up.
Along
the
way,
Generation
10
used
its
track
record
and
experience
in
delivering
solutions
in
the
cotton
world
to
decide
on
architectures,
tools,
structure
as
well
as
functionality.
What
it
was
looking
for
was
the
ability
to
be
agile
and
flexible.
The
company
chose
a
web-­‐based
architecture
and
built
its
own
technology
platform
–
the
G10
Framework
–
to
serve
as
the
foundation
for
all
of
its
products,
including
its
new
CTRM
solution,
G10
Commodity
Manager.
Generation
10
also
developed
a
new
highly
visual,
graphical
user
interface
and
analytics
tool
called
d3
Analytics.
The
G10
Commodity
Manager
is
a
multi-­‐commodity
and
highly
configurable
CTRM
solution
known
for
the
strength
and
depth
of
its
logistics
functionality,
which
provides
users
with
a
host
of
supply
chain
optimization
business
benefits.
Users
can
streamline
planning
and
scheduling,
utilize
capacity
more
efficiently,
identify
the
best
vendors
to
work
with,
and
manage
suppliers
more
effectively,
all
while
achieving
high
standards
of
care
and
customer
service.
Users
are
simply
in
a
better
position
to
gain
competitive
advantage,
optimize
workflows,
establish
metrics,
set
benchmarks
and
identify
trends
by
analyzing
performance
over
the
long
term.
It
also
provides
comprehensive
trade
capture,
risk
management
and
accounting
functionality
for
a
variety
of
products.
The
d3
Analytics
solution
provides
interactive,
visual
tools
to
help
users
identify
trends,
increase
operational
transparency,
set
benchmarks
and
achieve
goals.
Users
can
locate,
understand
and
act
on
information
much
more
quickly
and
efficiently.
When
combined
with
its
library
of
web-­‐enabled
components
and
bespoke
applications,
the
G10
Framework
allows
Generation
10
to
provide
customers
with
the
exact
capabilities
they
need,
rapidly
and
seamlessly.
All
of
its
products
have
been
designed
to
be
highly
configurable
and
personalizable
by
the
users
without
programmer
intervention.
“People
in
the
‘Facebook
generation’
demand
intuitive,
flexible
tools
to
help
them
perform
their
jobs
with
a
minimum
of
fuss
and
a
maximum
of
cool,”
says
Richard
Williamson,
CEO
of
Generation
10.
Its
software
makes
it
easy
to
add
new
fields,
grids,
data
collectors,
dashboards,
work
flows
and
so
on
without
any
programmer
involvement
at
all.

6. Commodity
Management
A
ComTech
Advisory
Whitepaper
©
Commodity
Technology
Advisory
LLC,
2014
6
In
addition
to
its
innovative
products,
Generation
10’s
unique
business
model
is
also
a
differentiator.
The
company
provides
flexible
software
solutions
and
services
via
agile
delivery
methods,
using
commercial
structures
that
include
the
use
of
the
software
with
continuous
upgrades
–
including
customized
upgrades.
G10
positions
itself
as
the
customers’
technology
and
analytics
partner
largely
due
to
its
team
of
data
analysts,
all
of
whom
have
hands-­‐on
experience
with
commodities.
The
team
regularly
meets
with
customers
at
their
own
facilities
to
better
understand
their
strategies
and
ensure
they’re
able
to
extract
the
maximum
value
from
their
data.
Functionality
is
delivered
rapidly
and
seamlessly
via
the
G10
Framework,
eliminating
any
temptation
to
resort
to
Excel
spreadsheets,
and
upgrades
are
delivered
continuously
via
the
cloud.
Generation
10
essentially
delivers
on
each
of
the
criteria
for
delivering
agility
and
flexibility
as
follows:
o Products
are
built
with
the
right
tools
and
technologies
on
the
right
architecture,
o It
has
a
user
interface
that
is
graphical,
intuitive
and
capable
of
being
truly
configured
by
end
users
without
the
need
for
programming
assistance,
o It
is
able
to
store
and
manage
multiple
types
of
data
and
can
easily
analyze
the
data
to
identify
trends
and
extract
useful
intelligence,
o It
has
the
capability
to
be
deployed
rapidly
and
in
a
manner
that
allows
for
continuous
customer
feedback
on
which
the
vendor
is
able
to
act
rapidly,
delivering
enhancements
efficiently
and
without
the
need
for
long
testing
and
implementation
cycles,
o It
designs
and
structures
the
commercial
terms
of
each
deal
to
encourage
and
support
such
flexibility.
Today,
Generation
10’s
clients
are
trading
cotton,
coffee,
cocoa
and
sugar
using
the
G10
Commodity
Manager,
which
is
helping
them
to
optimize
their
supply
chains
and
better
control
all
types
of
risk
(market,
credit,
operational
and
liquidity)
in
real
time.
Notable
clients
using
the
G10
Framework
and
d3
Analytics
include
the
US
Department
of
Agriculture
(USDA)
and
marine
insurance
specialists
Rekerdres
&
Sons
Insurance
Agency.
Generation
10
has
given
USDA
the
analytical
tools
it
needs
to
identify
long-­‐term
trends
in
performance
and
also
to
be
proactive
in
addressing
potential
problems
before
they
escalate
–
often
before
they
even
occur.
Meanwhile,
Rekerdres
&
Sons
uses
Generation
10’s
solutions
to
coordinate
highly
complex
processes
and
documentation
from
a
variety
of
stakeholders,
operating
on
different
systems
from
all
over
the
world.
“Generation
10
has
helped
usher
our
company
into
the
age
when
data
works
for
us,
rather
than
us
having
to
work
for
the
data.
The
more
the
system
can
anticipate
what
I
need
and
give
it
to
me
without
my
having
to
spend
time
looking
for
it
and
modifying
it,
the
greater
my
efficiency
is
going
to
be,”
says
Mr.
Brett
Anderhub,
VP
at
Rekerdres
&
Sons.
Agility,
Flexibility
and
User
Engagement
For
Generation
10,
it’s
not
just
about
delivering
software
that
does
what
it’s
supposed
to
do,
but
making
sure
that
it
keeps
on
delivering
as
it
is
supposed
to,
as
well.
By
building
agility
and
flexibility
into
both
the
software
and
the
business
model,
the
company
aims
to
ensure
user
engagement
with
the
software
as
well.
Its
focus
is
strongly
on
user
job
satisfaction
and
ensuring
continued
long-­‐term
usefulness
of
the
software.
“If
you
can’t
get
a
user
to
engage,
you’re
not
providing
them
with
the
collaborative
tools
they
need
to
be
the
best
at
their
job,”
Williamson
says.
“If
they
aren’t
collaborating
on
a
unified
platform,
it’s
going
to
be
difficult
to
measure
performance,
monitor
activity
and
provide
the
real-­‐time
business
analytics
they
need
to
get
an
edge
on
the
competition.
That
edge
comes
in
the
form
of
intelligence,
efficiency
and
risk
control.”
In
retooling
its
product
portfolio,
Generation
10
used
its
extensive
experience
in
the
complex
world
of
cotton
to
develop
a
truly
multi-­‐commodity
platform
designed
for
optimization
and
transparency.
It
focuses
on
business
logic,
user
engagement
and
“exceptions
to
the
rule,”
thus
delivering
the
agility
required
by
businesses
today,
in
an
environment
where
data
is
becoming
one
of
the
most
valuable
assets
a
company
can
possess.
They
have
created
a
suite
of
software
for
a
broader
commodities
world
that
appears
to
deliver
on
the
premise
that
CTRM
software
needs
to
be
about
real-­‐time
analytics
and
providing
users
with
the
tools
that
they
need,
not
just
to
manage
and
report
end-­‐to-­‐end
transactions,
but
also
to
help
identify
favorable
trading
opportunities,
address
operational
risks,
effectively
manage
and
optimize
supply
chains,
ensure
compliance
with
regulations
and
provide
trading
intelligence.

7. Commodity
Management
A
ComTech
Advisory
Whitepaper
©
Commodity
Technology
Advisory
LLC,
2014
7
About
Commodity
Technology
Advisory
LLC
Commodity
Technology
Advisory
is
the
leading
analyst
organization
covering
the
ETRM
and
CTRM
markets.
We
provide
the
invaluable
insights
into
the
issues
and
trends
affecting
the
users
and
providers
of
the
technologies
that
are
crucial
for
success
in
the
constantly
evolving
global
commodities
markets.
Patrick
Reames
and
Gary
Vasey
head
our
team
with
a
combined
60-­‐plus
years
in
the
energy
and
commodities
markets,
providing
a
depth
of
understanding
of
the
market
and
its
issues
that
is
unmatched
and
unrivaled
by
any
analyst
group.
For
more
information,
please
visit
http://www.comtechadvisory.com.
ComTech
Advisory
also
hosts
the
CTRMCenter,
your
online
portal
with
news
and
views
about
commodity
markets
and
technology
as
well
as
a
comprehensive
online
directory
of
software
and
services
providers.
Please
visit
the
CTRMCenter
at
http://www.ctrmcenter.com.
______________________________________________________________________________________________________
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