Agiboo’s CEO Bart Kroon Sat down with Commodity Technology Advisory in London to discus Agiboo and it’s Commodity Trade and Risk Management (CTRM) solution called ‘Agiblocks’. They talked about embracing new challenges, the changes in the market and what to expect in the future. Read the full article below or on ComTechAdvisory.
Commodity Technology Advisory has been following new entrant AGIBOO more or less from its inception. The company has now developed its Agiblocks product and is moving from a focus on initial product development to more of a sales and marketing mode. It is also growing and has a number of customers now using its CTRM software primarily in the agricultural and softs space.
As a the company matures and begins a slight shift in focus from developing the product in the first instance to selling, delivering and supporting it, as well as to help manage its growth, AGIBOO recently appointed Mr. Bart Kroon to the newly established role of CEO. We had the opportunity to sit down with Mr. Kroon recently and sought out his views on his recent appointment, AGIBOO’s strategy and the state of the industry in general
ComTech: You have a background in trading commodities. How will that help you as the new CEO of AGIBOO?
BK: In both CTRM software development and in CTRM sales, a good understanding of commodities trading is crucial and my knowledge, from a trading, procurement and financial background, is a great help in setting the Agiblocks development roadmap and our commercial strategy. My experience in both medium-sized and corporate environments helps here as well. CTRM functional requirements and CTRM investment decisions in these environments differ and my experience helps Agiboo to address both more adequately. And of course it does help that I can offer my professional network to Agiboo.
ComTech: What did you see in AGIBOO that convinced you to take the job?
BK: In my professional career, I have been driven by the ambition to have a meaningful impact in the business I work in. Meaningful impact in the sense of being the driver behind the successful change in business models and processes to bring the business to the next level of performance. I have always liked the challenge to make new business models successful. I believe that Agiblocks can be an excellent solution for commodity businesses that have the ambition to grow beyond market expeComTechtions and outperform to their peers. I estimated that Agiblocks, which was been created out of a passion for commodities, would have an impact in the CTRM market. I appreciated the opportunity to be part of that and appreciated the challenge of leading Agiboo in the next stage of its Growth. Additional to that, I found a good match with the founders of Agiboo from a vision perspective and I recognized that my skills and experience really could make the difference for the company.
ComTech: Agiblocks is a new CTRM solution entering an already crowded market. What is different about the Agiblocks software product that makes you believe it will be competitive?
BK: To my knowledge, there is no other CTRM solution that is so versatile and yet offers so much flexibility as Agiblocks. I have never experienced CTRM software that was so much geared toward its users then Agiblocks. It is fun to work with and really turns complex matters into simple actions. I also think that in the current economic environment, companies are not willing to spend as much time and money on implementation processes as they used to in the past, and that they are looking for solutions that can handle changing environments. Agiblocks offers an agile implementation approach, is versatile and flexible even after it’s implementation, and these unique differentiators combined with the unique intuitive user interface results in a relatively low implementation risks and relatively cost of ownership. All together Agiblocks offers a better value versus it’s competitors.
ComTech: ComTech sees a number of ERP software vendors entering various facets of commodity management, how do you see the demarcation lines between ERP and CTRM software?
BK: I’m not sure whether there are clear Demarcation lines, but I do know that ERP and CTRM come from different planets. In my experience, ERP defines and sets the structure of processes, with the aim to exclude as much uncertainty as possible, aiming for prediComTechble processes and highly controlled process management, and extensive financial and management accounting. CTRM, on the other hand, should be geared to offer its users as much flexibility as possible enabling the users to maximize commercial potential in trading or procurement, whilst maintaining controls on risk and allowing for accurate financial information management. There is a clear difference in starting point here !
I see the same happening in other industries; it is not the big car manufacturers that lead the change into electrical powered vehicles (it is Tesla), and it is not the big retail banks changing consumer payment behavior (it is PayPal and potentially Apple Pay). I do expect that some ERP vendors will be able to create “ acceptable” CTRM solutions, but I do not expect that they will create “leading” CTRM solutions. Despite my estimate that ERP vendors will try their utmost to “lock their customers in”, the increasing acceptance of web service based integrations will ensure that CTRM customers will continue to consider CTRM verticals and CTRM bolt ons to their ERP systems. If you make your money by trading commodities, or your Bill of Materials is mainly composed of traded commodities, why would you settle for less then best when it comes to your CTRM software platform ?
ComTech: Analytics and the ability to handle big data are becoming more important, how do you see social media being used in commodity trading?
BK: Thats a good question, and I see two ways of looking at the impact of social media on the commodity markets.
First, social media is increasing transparency in the market, which theoretically would lower margins for all involved, and would force participants to leave the markets. This has happened over the last few years in a number of area’s after the absorption of internet (developed world) and the penetration of mobile telecom (developing world), it clearly lowers the power of players to dominate (geographic) markets, but forces some players to leave markets as a result of outdated business models and fuels further consolidation in the industry.
The other view is that the transparency created by social media lowers entry barriers in the market, which will increase the number of participants, and thus the liquidity in the markets. The latter enforces the change in power distribution in the supply chain and thus offers new possibilities for value creation for these participants that define “value adding” and cost efficient business models.
So pick your future… I would set my money on the second view…
I believe that social media will become more important in the trading environment, in particular combined with the ability to manage “big data from the social media environment”. Next to terminal market curves also premium \ differential curves will become more transparent, which will create new business and trading models. I also expect that next to fundamental and technical analysis, social media based “trend analysis” will become a standard decision support instrument for the trading community.
ComTech: Agiboo just won its first energy customer for oil trading – what other commodities is Agiboo targeting outside of Ag’s?
Agiblocks has been designed as a true multi-commodity solution and so far, it has been confirmed in cocoa, coffee, sugar, dairy, and we expect it to confirm in grains and oilseeds, and physical energy as well. We have arrived where we are due to our successful cooperation with our initial customers in Softs and Ag’s. It is these customers that helped us build a great product and we also owe it to them to maintain our focus in these markets.
Diversifying to more market environments is not a goal for Agiboo at this point intime, there is plenty to gain within currents markets. However Agiboo has been asked to quote in the metals and precious metals market. We do have some experience in other markets such as metals and are open to engage in these markets when requested.