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SAP Update on its Commodity Management Business

I recently had a briefing from the SAP Commodity Management solution management team led by VP, Anja Strothkaemper – the first update in over a year. There was a lot of news to take onboard including that SAP says it closed 20 new name customers in 2022 for its Commodity management solution. The new customers included representatives of the auto industry, coal, mining, Ags and softs and travel, and transportation, I was told. It also went live with a variety of oil and agricultural customers, a trading firm and agrichemical firm and has a strong and diverse funnel of opportunities to work on. It was also hard at work adding significant enhancements working with customers on co-innovation projects in various areas.

These included solutions like SAP Agricultural Contract Management, where it added a great deal of flexibility for merchants around contracts, increased automation and added personalization features. Merchants can now more easily handle unplanned deliveries during the harvest period and assign deliveries to contracts and prices in a user-friendly way. Another area of innovation was in prepayment management to allow prepayments to farmers in terms of cash or barter to help finance crop cycles or prepayments in international trade. Another major area is in hedge accounting where SAP has built a fully functional hedge accounting and optimization capability including a hedging cockpit for traders. This also features more automation to reduce manual efforts and Cash Flow Hedge Accounting for Commodity Price Risks according to IFRS9. Other areas of work included the launch of new solutions such as SAP Broker Reconciliation for Commodity Derivatives and SAP Agricultural Origination Portal, and more. A lot of the work performed was around increasing automation, usability, and flexibility. Apparently, SAP has also learned a lot from its ongoing implementations and applied a lot of lessons learned to help smooth the implementation process as well.

Internally, the business unit is extremely proud of winning a prestigious award (the Hasso Plattner Founders‘ Award) for its SAP Intelligent Agriculture solution supporting  efficient and sustainable farming, Anja told me. She was also very happy with how things had gone at Sapphire with a focus on from farm to consume that directly showcased SAP’s coverage of the supply chain. Furthermore, there was a keynote presentation from Phillips 66 that talked about the success of the project there to use SAP for its energy business globally. So overall, it looks like SAP had a good and busy year in and around commodities.

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