Phlo System’s opsPhlo – Commodity Management in the Cloud
Talha Khan is Phlo System’s CTO and recently I had an opportunity to talk with him about some of the technology initiatives going on over at Phlo Systems and gain an understanding of the technology and platform strategy there. However, first a little background…
Commodity trading and risk management solutions (CTRM) re defined by ComTech as a subset of the broader commodity management application group, which is essentially ERP with CTRM functionality or, put another way, ERP built with an emphasis on commodity trading. For firms in ags & softs, for example, it’s not just about entering trades, position management and invoicing. It’s about managing transactions through complex supply chains and so many firms end up first procuring an ERP solution and then customizing it for their commodity trading or integrating it with a CTRM solution from a vendor. This integration can be non-trivial and extremely expensive.
The market for Commodity Management solutions is very large – we estimate five to six times that of CTRM. It has attracted the likes of SAP, Microsoft, Oracle and so on with commodity-focused versions of their ERP solutions or via add-on modules for commodity trading provided by solution partners. Many CTRM vendors have extended the functionality of their solutions to cover more ERP-like functionality so that we have referred in the past to the clash of two software categories. Such solutions are often expensive, lag in architecture and technologies and difficult to deploy being built with the very largest and most complex commodity firms in the world.
Enter Phlo Systems…..
Being a relative newcomer to the market, it was able to look at modern ERP platforms and vendors seeking out a multi-tenanted SaaS ERP on which to start building out its commodity trading solution. As Talha explained, “Acumatica at that time was far and away the fastest growing cloud-based ERP around with very attractive technology to boot. It’s not legacy software ported over to work on something like Citrix for the cloud but fully web-based, multi-tenanted cloud.” By partnering with Acumatica, Phlo can build on top of the framework and offer a solution that is more cost effective and easier to deploy, he told me. “It uses a custom ASP.NET framework that is hosted as a website. The framework manages the majority of the front end styling so it allows our developers to focus on the coding and not have to worry about the front end since the design of the front end will be shared amongst the whole system. All new features they add are both backwards and forwards compatible.” He also cites the flexibility it affords Phlo in that it can be deployed on private servers, hosted in the cloud and even white labelled if required. Other benefits include allowing users to easily add user-defined fields and their own reports, for example. To make the commodity flow work, he says that it made modifications within the base platform. This means that it “accounts for all the nuances for commodities, whether that’s the way that fair valuation accounting works or whether it’s the standard workflow of what specific commodities need with their inventory or manufacturing.”
Implementation of the product – called opsPhlo – has been relatively straight forward to date as almost all customers were adopting the solution from an excel-based or manual solution. Greenfield implementations like this are relatively straight forward and the beauty of this solution, he says, is that it can be attractive to such customers from a financial perspective offering a true fully-functional solution. In a couple of instances, it has involved migrating from another solution and here it is a bit more challenging, he told me. “Every company has slightly different business processes and so we have to customize and that’s when implementations can get a little bit longer than necessary but generally we have a pretty straightforward 51-step process to configuring the entire ERP and CTRM,” he said.
With the competitors often being much larger ERP solution providers, Phlo Systems has found its differentiators are lower cost, faster and cheaper implementation and, “better commodity workflows as they tend to be weaker in the specifics of commodities,” he said. Another benefit is that integration becomes much easier as Acumatica provides Open API’s and even if its integration with a real legacy solution, flat files can be created and pulled in easily, he said. Finally, things like adding a new commodity becomes set up and can even be done by the customer though Phlo will of course help as necessary and, there is a universe of solutions via the Acumatica marketplace if necessary too.
opsPhlo then seems to us to be a modern technology commodity management solution available as SaaS with all the benefits that that provides. It is likely to be primarily of interest to smaller and medium players who seek to bring in a modern solution for ERP and CTRM while keeping costs down. We will watch closely to see how Phlo Systems does with it in the market.
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