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TAKING THE NEXT STEP IN

CTRM CLOUD SOLUTIONS


WHITE PAPER
Commodity Technology Advisory LLC, 2014
Introduction
IN THE LAST DECADE, A QUIET REVOLUTION HAS OC-
CURRED WITHIN THE E/CTRM (ENERGY/COMMODITY
TRADING AND RISK MANAGEMENT) SOFTWARE CATE-
GORY AS VENDORS AND USERS HAVE INCREASINGLY
ADOPTED THE CLOUD-COMPUTING MODEL. THIS MOVE
HAS BEEN DRIVEN BY DEMAND LARGELY FOR MORE
AFFORDABLE E/CTRM SOFTWARE AS REFLECTED BY
A LOWER TOTAL COST OF OWNERSHIP. INCREASING
REGULATORY AND SHAREHOLDER SCRUTINY HAS
MEANT THAT EVEN SMALLER COMMODITY TRADERS
NEED TO ABANDON SPREADSHEETS AND SIMILAR
UNSTRUCTURED AND DIFFICULT TO AUDIT TOOLS IN
FAVOR OF MORE ROBUST SOLUTIONS. HOWEVER, EVEN
THE SMALLEST OF COMMODITY TRADING COMPANIES
HAS PRETTY BROAD AND COMPLEX REQUIREMENTS
MEANING THAT THEY ACTUALLY STILL REQUIRE
A FULLY-FLEDGED APPLICATION TO MEET THEIR
NEEDS, BUT ONE THAT FITS WITHIN A BUDGET
THAT REFLECTS THE SIZE OF THEIR BUSINESS.
Commodity Technology Advisory LLC, 2014
A ComTech Advisory Whitepaper Taking the Next Step in CTRM Cloud Solutions
E/CTRM IN THE CLOUD
It is important to note that its not just the small-
er commodity traders that see the potential ben-
efits of a cloud-based solution either. Recent
ComTech research
1
suggested that, in general,
all buyers of E/CTRM sof tware are increasingly
open to considering alternatives to the tradition-
al on premises implementation model. While a
small, but committed, minority continue to resist
anything but the traditional on-premises imple-
mentation approach, the overwhelming majority
of respondents will consider cloud deployment
for a variety of vertical application areas in and
around commodity trading.
However, the same research suggested
that only 16% of those who responded to the sur-
vey already used a cloud-based E/CTRM solu-
tion. It also showed that just around half would
seriously consider E/CTRM in the cloud as a
procurement option though the final decision
was of ten still more likely to lean toward a tra-
ditional installation. Beyond a general sof tening
of overall objections, the sluggish global econo-
my has been driving increased interest in cloud-
based E/CTRM, as the potential for substantial
cost savings for the acquisition and implementa-
tion of cloud solutions (versus that for traditional
sof tware) is attractive.
General perceptions regarding sof tware
delivery in the cloud have improved over the last
few years. A majority of the survey respondents
held favorable or improved views of the model; almost certainly in
part due to increasing exposure to cloud-based products gener-
ally in both the consumer and commercial markets (including on-
line exchange trading, on-line banking, CRM solutions and even
iTunes). However, the most pressing issues associated with cloud
delivery remains potential security issues, concerns about loss of
control over their data, and perceptions of dif ficulty in integrating
with cloud based or web delivered sof tware applications.
In reality, the security issues related to E/CTRM deploy-
ment in the cloud may be somewhat overwrought. With the advent
of on-line exchange trading and trade reporting, most companies
today already have significant volumes of trade data floating
around in the cloud, and with the new regulatory reporting re-
quirements, that volume of trade data sitting outside of a trading
companys firewall will only increase. There will be a continuing
acclamation to, and acceptance of, cloud-based applications/data
storage as web-based trading and reporting becomes even more
common. That being said, data security should always be a critical
concern to users of E/CTRM systems, regardless of whether that
data is in the cloud, in an in-house server room or sitting in a box
on a traders desk.
The attraction of cloud-based E/CTRM sof tware is not
limited to ease of deployment. The ongoing cost benefits are also
quite attractive as it potentially significantly reduces the need for
expensive implementations, upgrades and maintenance activities
as well. Web-based means users have instant access to the full
range of functionality from your Web browser. There are no long,
costly installations or expensive servers and databases to buy and
support. E/CTRM in the cloud has potentially positive implications
for speed of implementation, cost of ownership, operational flexibil-
In recent years, consumer and business cloud-based applications have begun to catch on and that familiarity does
seem to have beneted the E/CTRM in the cloud market as well, as customers are now much more familiar with the
benets than they were 5 years ago.
1 | CTRM in the Cloud, Commodity Technology Research Report, January 2014 (Sponsored by Aspect Enterprise, Brady PLC and Generation 10)
Commodity Technology Advisory LLC, 2014
A ComTech Advisory Whitepaper Taking the Next Step in CTRM Cloud Solutions
DELIVERING THE BENEFITS
In order for E/CTRM software to cater for a broad
enough set of users to be commercially viable, it has
to also be extremely congurable. Unfortunately, this
congurability often translates into complexity that
increases implementation times and the difculty in
supporting the application; in turn, driving up costs
and increasing the operational risks associated with
customized software. Simply supplying E/CTRM in
the cloud doesnt necessarily help reduce this com-
plexity either and the market is well equipped with
stories of implementation over runs and even failures
for both on-premises and cloud based solutions.
Addressing the risk of such occurrences, As-
pects AESthetics technology, which has now been
running for several years, involves a series of initia-
tives designed to reduce this complexity, expediting
As one of the earliest in the cloud vendors, Aspect has gained a level of expertise and insight into cloud deploy-
ment and into accruing the promised business benets beyond that of most E/CTRM vendors. The company has
recently launched a program called AESthetics, designed to remove the complexity from E/CTRM implementation
and customization around cloud-based applications. In addressing this need, AESthetics hits at one of the biggest
difculties with E/CTRM software; one that has historically been a dilemma for creators and users of the software
category alike.
implementations and support. One of these initiatives is to decompose
existing business applications into more discrete and granular compo-
nents, which along with best practice business process maps created
by the company, can be used to help companies assemble the com-
ponents into any workow to meet their users business requirements.
Aspect Enterprise Solutions has also developed and uses a series of
Work Benches to represent common activities among commodity trad-
ing companies, including for example, Reference Data Management,
Contract Management, Credit Management, Transaction Capture, Deal
Conrmation, Risk Management, Physical Delivery, Settlements and
Accounting. The company builds and releases such Workbenches with
each new release.
The idea is that by conguring the component applications,
common business activities and best practice business processes and
workows, users can create and access an application that is truly per-
sonalized to their business and create an experience that Aspect terms
ity, trading safety, and ef ficiencies. Rapid deploy-
ment is provided out of the box, with customized
configurations depending on the complexity of
the requirements.
Buyers however, must be careful and
check the label. Taking a client/server E/CTRM
application, hosting it somewhere and then
screen scraping it with Citrix is not SaaS nor
hosted in the cloud. Such a mode of deployment
may not bring the envisaged cost and business
benefit as it may not of fer the vendor the ability
to reduce costs associated with implementation
and support. To really provide those benefits, the E/CTRM needs
to be written specifically for such a delivery mechanism; the right
architecture and technologies are key.
One vendor who, perhaps more than any other, has innovat-
ed E/CTRM in the cloud is Aspect Enterprise Solutions. The com-
pany started of fering its ETRM solutions in the cloud 14-years ago
and has continued to do so ever since in the broader CTRM arena
for metals and agricultural commodities. The company has enjoyed
considerable success with this model and counts some 500 com-
panies as clients for its web-based E/CTRM and data management
tools.
Commodity Technology Advisory LLC, 2014
A ComTech Advisory Whitepaper Taking the Next Step in CTRM Cloud Solutions
A BROADER PARTNERING
APPROACH
Not only does the AESthetics approach work at
progressively making the software easier to adopt
but, as importantly, it makes the software easier
for third-parties to work with as well, ensuring that
there is a depth to choice of third-party consulting
resources to assist users during implementation
and for long-term support. While Aspect realizes the
benet of an increased sales channel via these 3rd
party resources, the value to customers comes for
the breadth of companies that assist in the support-
ing Aspects solution. To this end, the company has
also designed and launched an innovative partner
program recently called APP, which by partnering with many of the top
services and technology companies across commodities, and regions
globally, Aspect is able to extend best practices, innovative tools and
optimum cost efciencies to customers.
The APP is designed to drive improvement and increase their
clients return on investment throughout the softwares lifecycle, from
initial acquisition through implementation, support and maintenance.
By pooling strengths in core competencies, best business practices
and tools, and supported by localized services companies, clients can
realize greater success via this partnering program.
Traditional Install AspectCTRM
3 year license/12 users $400k $540k
Implementation $600k $50k
Enhancements/Reports $160k $0
3-year S&M $160k Included
3-year DR $200k Included
3-year IT Support $300k Included
MyAspect. Utilizing AESthetics, users can cong-
ure the Aspect solution as opposed to needing cus-
tomization through code development.
Ultimately, AESthetics essentially helps to reduce
complexity while increasing usability and makes this
repeatable across many users of the solution. It cre-
ates system stability and exibility helping Aspect
to meet its promise of an exact t in record time.
Furthermore, the approach also allows the company
to build indirect sales channels using system inte-
grators and regional consulting rms, while provid-
ing the user with a degree of self-sufciency as it
is possible to outsource the client conguration to
third parties and IT teams within user organizations
potentially saving time and tens of thousands of dol-
lars in professional service fees.
Aspect AESthetics is about solving the
congurability/complexity problem in the context
of cloud-delivered E/CTRM software. As previously
stated, congurability and complexity are often two
sides of the same coin, increasing costs and timescales for implementa-
tion and increasing the risk of project failure. In order to fully realize the
value of cloud delivered E/CTRM, users must still be able to congure
their solution to meet their business requirements, without hindering
the ability to quickly implement, and bring into full production, the new-
ly acquired solution. Not achieving these goals would ultimately defeat
the purpose of the cloud model and the potential business benet of a
lower TCO.
Table 1 | Comparison of AspectCTRM Deployment versus
Traditional On- Premises deployment
(Simplied from Aspect website content)
Commodity Technology Advisory LLC, 2014
A ComTech Advisory Whitepaper Taking the Next Step in CTRM Cloud Solutions
SUMMARY
Cloud vs. on-premise deployment of E-CTRM solu-
tions is still debated by internal management and IT
teams, but adoption is well underway from all busi-
ness segments, large and small. This shift started
several years ago within this space. Aspect was one
of the rst vendors to offer E/CTRM software in the
cloud over a decade ago, and it continues to be the
leading innovator in this increasingly accepted tech-
nology segment. Given the companys long history
and componentized approach to technology devel-
opment, and backed by their innovative AESthetics
program, Aspect has learned how to optimize the
delivery of cloud-based E/CTRM for users, ensur-
ing that the perceived business benets are fully
realized.
ABOUT
Commodity
Technology
Advisory
LLC
Commodity Technology Advisory is the leading analyst organization covering the
ETRM and CTRM markets. We provide the invaluable insights into the issues and
trends affecting the users and providers of the technologies that are crucial for
success in the constantly evolving global commodities markets.
Patrick Reames and Gary Vasey head our team, whos combined 60-plus years in the
energy and commodities markets, provides depth of understanding of the market and
its issues that is unmatched and unrivaled by any analyst group.
For more information, please visit:
ComTech Advisory also hosts the CTRMCenter, your online portal with news and
views about commodity markets and technology as well as a comprehensive online
directory of software and services providers.
Please visit the CTRMCente at:
19901 Southwest Freeway
Sugar Land TX 77479
+1 281 207 5412
Prague, Czech Republ i c
+420 775 718 112
ComTechAdvi sor y. com
Emai l : i nfo@comtechadvi sor y. com
www.comtechadvisory.com
www.ctrmcenter.com

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