Reliance on technology is one of your biggest risks – are you mitigating it appropriately?
A truism: If your company trades any commodity, you use software to manage your business. Moving past that simple statement, things get much more complicated and very difficult questions arise.
- Do you rely on vendor supplied and supported software, or do you rely on internally developed capabilities or spreadsheets? Just how much do you rely on your software to conduct the business of commodity production, trading and/or marketing?
- If your system or a component of your systems died overnight, could you still conduct business tomorrow? How much money would your business lose before you were able to recovery or reconstitute the system?
- If you were to lose your most knowledgeable user(s), do your other users have enough knowledge to keep the system running well enough not to impact your daily business?
- What would happen if your CTRM software provider shut down tomorrow? Do you have a plan in place to address ongoing support and maintenance of your software?
- Do you rely on your system to inform your business decisions, or is it simply a way to record what you have already done? Are you actually realizing the benefit of having these complex and expensive systems deployed within your business? Can you improve your financial performance if you improved the way you used the software you have? Is there a better product or technology for your business?
- Is your data and information safe but yet easily retrievable?
- How will the technology of trading change and what will be the impact for your company? Will you be able to keep up with your peers and the market?
- If the regulatory authority came calling, could you show them evidence of your compliance with the regulations?
Let’s be frank…
If your commodity trading business is more than a two-man operation, you would probably get very nervous if you spent too much time thinking about the many risks that come with the technology infrastructure that supports your business. While almost everyone thinks about disaster recovery and back up, few spend even a fraction of that time thinking about many other difficult questions that are part and parcel of the software on which they all rely.
ETRM/CTRM software is a very unique class of technology. The 100 or so providers of these technologies each reflect part or the whole of a wide range of capabilities – multiple geographies (each with unique business and regulatory regimes), multiple commodities, multiple business processes from production to retail, multiple deal types or instruments, and a diverse array of technologies ranging from older legacy client-server software to bleeding-edge web-delivered applications.
If you just take your business in isolation, that is, you just think about the stuff you do on a daily basis, you might think that your system or systems is going to keep your business going tomorrow, next week and probably for the next year. But, what if next week or next year comes and you find out something bad happened – your system died and can’t be recovered for a couple of days, or your software supplier suddenly shut down for whatever reason, or the price of crude skyrocketed and you don’t have enough data in your system or it doesn’t have the capability to tell you what your exposures actually are?
Monitoring risk
Risk is everywhere in commodity trading and that’s why traders, quants and analysts spend most of their time looking at daily trends and fundamentals, both near and long term. They are monitoring the markets, looking for indications of future price movements that will either cost them money or offer them the opportunity to make money. The problem is that most companies don’t recognize, or they don’t have enough resources to monitor, the myriad of risks associated with the technologies on which their businesses rely…and that’s why we at ComTech, in association with Commodities Now, have launched our CTRM Conference series – an event for all involved in wholesale commodities production, trading and marketing, including energies, ags, metals, emissions, etc.; everyone whose business currently relies on ETRM/CTRM technologies or is planning on buying those technologies in the future.
This event provides users and their technology staffs to remain abreast of these critical technologies and understand what their peers are doing to address technology risks. Among the topics we’ll examine:
- The current state of technology and its ability to support increasingly complex global markets and trading operations
- The risks/rewards associated with both vendor-supplied technology or internally developed systems/spreadsheets
- The key emerging technologies, such as social media tools, that will play a key role in trading in the near future
- The technology ecosystem – what’s available now and what can we expect in the next 5 years
- What technologies are available to address the requirements poised by an increasingly oppressive regulatory environment
- How are the commodities markets changing and what will you need to do to keep pace with those changes
You’ll get the latest on technology developments from industry experts and you’ll learn what your peers doing to address the difficult technology issues you face today. You’ll also have a chance to visit with technology providers and the consultants that are working today to address today’s issues and tomorrow’s market developments.
For a limited time, we are providing a special registration offer to users of CTRM technology. If you are currently employed by a commodity trading business, and you sign-up to attend the CTRM Conference as a fully paid up delegate within the next 30 days, you will receive a free pass for a colleague. To register for this special offer, please visit CTRM Conference website..
The CTRM Conference to be held in London on October 2nd, at The Pullman, St. Pancras. This unique one-day event focuses on commodity trading and risk management (CTRM) software and brings together end users, service practitioners and vendors to spend a day focused the key issues and trends impacting the industries and users served by these critical systems. Hosted and facilitated by ComTech Advisory, the leading analysts in the CTRM software space, and Commodities Now magazine, the CTRM Conference brings a compelling agenda of presentations, knowledge sharing and roundtable discussions involving leading experts in the space and is supplemented by excellent networking opportunities.
The CTRM Conference is sponsored by Platinum sponsors – Quorum Business Solutions, Generation 10, Gold sponsors – Brady PLC, DataGenic and Trayport Contigo and Bronze sponsors, Agiboo BV, Aspect Enterprise Solutions, Energy Solutions International, Invensoft, JustCommodity and OpenLink.
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