The week before last, I attended the SAP Commodity Management Forum along with close to 100 others. This year, it was held at SAP HQ in Walldorf, which is quite an impressive facility. The SAP Commodity Management Forum content was essentially a combination of presentations, demonstrations and roundtables by SAP staff, outside firms (including ComTech) and customers that together provided an update on where SAP is with its CM offering and where it is currently planning on going with it. As of 2020, the SAP Commodity Management solution has over 200 customers globally across different industry segments and commodities and has emerged as a major force in CM and indeed CTRM. In part, SAP has attained this status through listening to customers including through ‘co-innovations’ and counts Cargill and a major Oil & Gas company as contributors in that regard.
I think the obvious difference between SAP and other CM and CTRM vendors for me is plainly its size and its ability to innovate broadly and in many ways. These initiatives include adopting new technologies like AI, ML and blockchain, or innovating the UI for a better user experience to using a proprietary in memory database for better performance and utilization of the cloud. The SAP Commodity Management solution is based on the SAP S4/HANA suite and therefore able to take advantage of the tremendous investments made by SAP generally in all of these and other areas. Other features or initiatives include a growing partner ecosystem in both the software and services arena, and a model company approach to faster and smoother implementations (of which more later). Now bigger doesn’t always mean better but plainly, in this instance, SAP has an advantage. Perhaps its disadvantage is speed because smaller vendors can and will move faster to add functionality even though they are more limited in their broader abilities to innovate.
Back in the early days, SAP plainly lacked a lot of functionality that would be required by traders and merchants but that is no longer true. I noted that Anja Strothkaemper, VP, Solutions for Commodity Management at SAP was using the term ‘CTRM’ freely for the first time this year and for good reason. One area where it is using a partner approach is in advanced risk analytics. SAP has an array of reports and capabilities in terms of basic risk management but by partnering with Lacima, it has added a comprehensive set of sophisticated risk analytics and physical commodity valuation models often required by companies in the commodities space via tight integration. In the area of market data, it has partnered with Brisken, who has developed an SAP Cloud Platform based Market Data Hub application that can be used to pull in a wide variety of price and related data from external sources. As SAP extends its universe of customers, expect that partner ecosystem to become numerous adding a host of capabilities to the solution.
SAP is focused on what it calls the Intelligent Enterprise in which intelligent applications and technologies are deployed to improve processes and user experiences for greater efficiency. During the course of the day and a half, we were shown many examples of how SAP Commodity Management fits this description. We saw intelligent RPA and ML used to automation in the cash application area where matching payments to invoices was made considerably easier. We also learned about a recent proof of concept where ML was being used to match Bills of Lading and transport invoices in an agricultural context where large numbers of 3rd-party trucks were being used. We were also shown how the FIORI launchpad was being used within the application to provide greater UI flexibility.
SAP has certainly come a long way in the last decade in Commodity Management/CTRM and it has a competitive offering especially for larger and more complex business across all commodities. Commodity needs change all of the time and rapidly and SAP needs to keep up with these like all other vendors in the space. The solution will not be for everyone but anyone with an SAP ERP will look at it especially as they upgrade to SAP S4/HANA. Available on premise or in the cloud (or as a hybrid of both), SAP Commodity Management also offers a variety of deployment options.