CTRM and disruptive technologies - Agiboo

Last week Thursday I attended the CTRM conference in Amsterdam. The main theme was CTRM and disruptive technologies. There were many interesting speakers who put their vision on the table about our future as an industry. Obviously as in any industry they are mostly dictated by new trends and technical possibilities. This year mostly about block chain, micro services, open source and cloud. The latter looks already passed the trend stage. Some vendors could move to the cloud offering and others (mostly providers of large monolithic CTRM systems could apparently not. The general public however reached a high acceptance level on the CTRM cloud offering already and my experience is that many expect this as a standard nowadays.

The monolithic approach

The common believe since the 90’s in the industry was that a cross commodity system would be the holy grail for CTRM. Many tried and as many failed. Their have been many reasons for that. It is my believe that crossing commodities require to much functionality which is in contradiction or disturbing between each other. This is especially true when a CTRM system should cater for functionality for all commodity groups. i.e. Energy, Metals and Agricultural or Soft commodities. When you ship bags of coffee it can be rather frustrating to also have functionality for pipeline transport. The complexity of certain commodities did not help either. Even within a group of commodities the functional need can be completely different. Trading wheat is not the same as cocoa beans. All kind of different special functions are needed. For sugar: White premium support can be essential to get it all right, where at cocoa it can be essential to support arbitrage as two exchanges quote in different currencies. There are numerous examples.

Providing CTRM

The answer to that dilemma always has been to put as much functionality as possible in a CTRM system. For this reason the development of such system is rather costly and takes years. The CTRM landscape is now filled with vendors who have usually a kind of specialism on a certain commodity or commodity group. Energy is maybe the most prominent, where it is then called and ETRM system. Other reasons are for example the size of possible users and expertise required. Building a software system for a large audience gives more possibilities to invest than for a specific market and probably you require some kind of passion to the commodity industry to facilitate the knowledge and expertise in the build process.

Technology impact

The influence of available technology during the years definitely had its impact on the industry. Cloud offering, web based technology to be used on tablets and smartphones, but also general architecture allowing quicker implementations and configurability. Here we at Agiboo have focused on to make CTRM available with Agiblocks for specific industries and also for companies who wanted to start with CTRM and have a quick affordable implementation. Last Thursday I realized more than ever that we are at the doorstep of a new era in CTRM.

Future of CTRM

The user audience will evolve in their expectations of how CTRM software is made available and gets cross integrated in their existing information technology infrastructure. Not only that will be important, the success will also be determined about how its get integrated throughout communities and new business technologies. The speed of rising technologies and adaption to it is increasing every day. New business technologies will be commonly used in a short amount of time. Blockchain is a very good example. At the moment this technology is adopted in the commodity trade or purchase process, CTRM will have to act on it.

Impact on the CTRM industry

The answer might be in microservices. This concept we adopted to some basic extent by breaking it up in (agi)blocks. The question however is how these disruptive technologies will influence a relative small market such as the commodity industry. In addition it will be important how you allow yourself to react on it and make it available to your clients. At Agiboo we adopted since our existing the Agile development method and DevOps. For now it has proven to allow us to integrate new technologies consistently.

Looking forward

Disruptive technologies will change the way we work and maybe even how we think in the commodity industry and it looks like that disruption is closer than we think. Personally I look forward to it to facilitate these technologies with our Agiblocks CTRM platform.

Commodity trade and risk management

The Commodity Trade and Risk Management can be seen from three different views: TradingMarket and Risks.  

18 March 2020

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