Insightful Data-Driven CTRM Vendor Selection Approach Facilitates Run-Operate Success

If you have read the first installment of our blog series on CTRM software selection, you are aware of the time consuming tasks and potential pitfalls involved when choosing a vendor on your own. And if you read part 2, you know what to look for when seeking a team to alleviate the burden and risks associated with a project of this magnitude.

Now, in our third post, you will learn how Value Creed and Sendero intertwine their comprehensive vetting and selection processes to help you select the vendor that is right for your organization. 

By engaging this team, your vendor selection process will leverage a unique, multi-step process as follows:

  1. Gather Intelligence – We define and enforce inclusive business unit involvement across the organization to ensure all stakeholders’ desires are heard. Staff interviews, executive strategy, and a vendor-agnostic approach ensures a bias-free selection.
  2. Define & Prioritize User Requirement with Insight of CTRM/ETRM Expertise – Armed with deep CTRM/ETRM hands-on expertise and industry domain knowledge, we construct a requirement model customized to your specific demands, operational workflows, cross-functional use cases, and overall program management goals.
  3. Insider’s Assessment of “Off-The Shelf Functionality” – It is rare when a CTRM/ETRM platform solves every stakeholder’s requirement “out-of-the-box.”  We align user requirements and technical considerations with each platform’s inherent capabilities and identify gaps where customizations will be required.
  4. Mapping Business Process Alignment – Alignment of existing business processes to the CTRM/ETRM platform is paramount. To choose the best-fit platform, existing business processes, back office, middle office and front office processes are assessed and compared among platforms.  Our management consulting assessment approach combined with our deep ETRM/CTRM experience ensures you have foresight into the  solution most closely aligned with your business goals. 
  5. Reach Consensus – Our comprehensive evaluation uses proven methods for vetting vendors and uncovering critical details involving cost of ownership and operation, potential productivity disruptions, learning curves, and more

 

Dive Deeper Into This Multifaceted Approach 

Sendero takes the time to uncover the drivers behind your firm’s trading challenges and opportunities, delving deep into your business philosophy to determine which software features will best get you where you want to go by involving executives, management, and front-line users through every stage, in every decision, while providing a structured methodology that allows you to balance your day-to-day asks with the selection.

Value Creed employs teams of experts fluent in CTRM, transaction flow, and contract structure. We understand how your software platform will influence the speed, efficiency, and profitability of every trade you make. Backed by hundreds of software implementation projects and millions of people-hours monitoring operations and reports, Value Creed ensures the software and vendor you engage will meet your needs now and in the future. As a managed service provider (MSP) our experience delivering on-demand 24-hour responsiveness by technical teams located both in the U.S. and India. Our dual time zone model gives Value Creed clients the functionality they need to thrive. 

#2: Harness the Power of Management Consultancy and Run-Operate Expertise

In our former post, we noted the value of having insight into common missteps that can be costly in the long run when the process of CTRM/ETRM vendor selection is not informed by deep platform expertise and a proven approach. 

In our former post, we noted the value of having insight into common missteps that can be costly long term when the process of commodities and energy trading risk management (CTRM/ETRM) vendor selection is not informed by a proven vendor selection approach. 

The truth is upgrading or moving to a new CTRM/ETRM software is an arduous, expensive undertaking. The good news is, you should not have to endure the experience more than once or twice during your career. The bad news is that conducting a project as potentially transformative as overhauling and converting your trading software can be especially challenging if you have never done it before.

Proven Vendor Selection Approach + Run Operate Knowledge = Long Term CTRM/ETRM Platform Satisfaction

The best software selection decisions will consider more than just the platforms’ purely technical capabilities. The optimal choice also will assess the software’s capabilities in solving your specific challenges and matches your workflow, strategy, and user demands. New requirements often come to light several months after software is commissioned. An experienced team of run-operated experts on your team can identify potential future conflicts and changes your company may need to undertake to make the software compatible with your business goals:

These insights give you the information you need to make informed decisions about the lifetime value each option will bring to your organization. As a basic foundation, you know what you will need to do to make your new software perform all the specified functions.

Double-Teaming Software Selection

In addition to easing the burden of evaluating and selecting the software product and vendor that you will be working with over the next decade, here are some benefits of adding both an operations and productivity guru and a management consultant to your software vendor selection team:

  1. Industry Familiarity – Most software consultants will be able to evaluate the products’ features, but only those familiar with commodities and energy markets will be able to match your needs to benefits and leverage their knowledge to uncover hidden requirements. The best will optimize not only your software but also the logistics, implementation, and deployment.
  2. Focus on Value Rather than Cost – Many companies consider IT a cost center, but when it comes to CTRM software, price should take a backseat to performance.and return on investment. Experienced managed service providers work with all aspects of various CTRM platforms and are positioned to balance cost against capabilities.
  3. Comprehensive Selection Methodology – Competent managed service providers focusing on software selection will help you choose a product that solves your problems with as little customization as possible. Tailoring adds expense without contributing value. A managed service provider will demonstrate why it is more efficient to alter existing workflows and processes to conform to a new platform than to force the application to adapt to legacy processes.
  4. Vendor Agnosticism – Software vendors want to sell their clients the product that best serves their needs, but they all believe their own product fills that need. A consultant has heard it all before and is familiar enough with the market to cut through the sales talk and evaluate offerings strictly based on their merits. A truly agnostic consultant structures the analysis to eliminate personal and systemic bias and leverages connections throughout the industry to get a better understanding of the products and vendors.

As a leading management consultant, Sendero presents a proven methodology for vetting software. This rigorous evaluation is instrumental in eliminating most contenders. The final selection, however, should include analysis by run-operate experts. Value Creed delivers by determining how the software programs under consideration will interact and align with your established procedures, logistics, and timelines. 

 

Combining Sendero’s experienced management consultancy with the day-to-day run-operate Value Creed’s managed services expertise ensures you will make the optimal decision for your firm.

Upfront investments in licensing and implementation are helpful, but not comprehensive of the entire lifecycle of software ownership.  By combining a managed services provider’s run operate phase expertise with a management consultant’s experience garnered through hundreds of software selection consultations, you have a complete view into onboarding the platform and managing and working with it long-term.  Value Creed’s run-operate expertise aligned with Sendero’s software selection practice ensures a unified approach to achieving your stakeholder’s goals while keeping the budget for licenses and implementation on track. 

#1: Hidden Costs of In-House Vendor Selection & How to Avoid Them

As markets shift, risks increase, and strategies evolve, your CTRM/ETRM software needs become more specific, comprehensive, and nuanced. The time may be right for upgrading your system so you do not expose your company to undue risk or leave money on the table. To keep costs manageable, you may be tempted to perform your own CTRM/ETRM vendor selection process in-house. This may be a viable option, but you should understand the “hidden costs” of In-House vendor evaluation.

The “Hidden Costs” of In-House Vendor Selection

While the benefits of selecting a solution in-house may seem compelling, if handled improperly, they can backfire:

 

  1. You’ll likely overpay in the long run – It could, and likely will, happen. Key features “presented in a demo” don’t uncover common pitfalls or technology gaps in “out of the box” implementations. This fact could cost you much more later with gap-fills and workarounds in the short run and investing in a proper fix for the long run.
  2. It’s a full-time job –  Having IT, procurement, other departments more work to create RFPs, research capabilities, sit through numerous product demos, negotiate prices, and manage the project. These tasks tax those with already full plates and put timelines at risk.
  3. You’re the “fall guy or gal” – As stakeholders are interviewed and use cases are created, scope often extends as back office, middle office and front office user needs are identified. Defining these comprehensively requires more than “sales demo” level insights. Leverage vendor selection insights gleaned from multiple installs to protect your recommendation and your reputation.
  4. It’s hard to be objective about an “old friend” – Engaging a vendor to pursue the selection process keeps your team objective, erasing the propensity to prefer one vendor over another due to past experience or active relationships. 

Why CTRM/ETRM Vendor Selection Experts Help Avoid Missteps 

Many companies, however, find they cannot spare the resources or simply do not have a proven approach for conducting vendor evaluations in-house. Engaging a consultant with “frontline-proven” experience and approach facilitates the process, proactively uncovers pitfalls, and saves you money by setting your team up for deriving long-term value. 

 

Choose Value Creed to Manage Your Vendor Selection Process

Value Creed’s “total ownership” model, considering your company’s focus, scale, strategy, culture, and other characteristics to develop a tailored plan for your software upgrade. We have the insights and established processes to ensure you receive the maximum computing power and value for your money. Our knowledge base is augmented by our partnership with Sendero, one of the most respected management consulting firms in the industry.

Contact Value Creed to learn more about our services and to schedule a software consultation.

#2 How To Proactively Overcome Reporting Integration Failure for CTRM Platforms

You may be able to manage and maintain your CTRM infrastructure, application enhancements, and reporting functions in-house, but at what cost? Could your employees be better deployed?  Can you effectively allocate the time and cost to each task? Do you know the status of each project in real-time?

Value Creed has a better way to ensure you maintain oversight of your CTRM process without the investment required to bring in or develop expertise in-house. When you engage Value Creed to handle your CTRM functions, you get the services of a dedicated project manager to serve as a both a lookout and a navigator to safeguard your company’s interests and direct our implementation team’s activities on your behalf.

Transparency

A recent project for a high-profile client illustrates our typical workflow. Based on client instructions, Value Creed calculated the hours spent and achievements logged over previous weeks. We noted time devoted to training, monitoring, and managed services, and presented them in an intuitive dashboard. 

To deliver greater insights and granularity, we broke these figures for each day and charted the data so emerging trends could be identified. Early in the process, the managed services team logged significant time training to learn the client’s specific platform, workflows and reporting requirements. As the project progressed and our personnel became less dependent on the client’s team to explain processes, training time diminished. Conversely, as our employees became proficient with the client’s system, proportionately greater time devoted to value-adding project management and monitoring activities. These improvements are clearly delineated on the dashboard.

Coordination with CTRM/ETRM Vendors

Value Creed’s managed services includes 24/7 report monitoring from two separate time zones to ensure comprehensive coverage and fast response to any failures. Occasionally an issue will arise during our monitoring of end-of-day reporting. When this happens, our team communicates and works with the vendor until the issue is resolved.

As with the client in our case study, you will receive a valuation spreadsheet several times per day detailing key metrics:

  • Runtimes
  • Errors Encountered and Corrective Measures Taken
  • Task Completion Timetable
  • Server Status
  • Queue Exception Log
  • Intraday Exposure, Holdings, Valuations, Trades, etc.

Example Value Creed Run Smart™ Managed Services Client Dashboard

This dashboard is customized to the needs of every client to ensure daily, transparent tracking and reporting of key KPI’s.  Tangentially, this report is supported by End-Of-Day logs and other materials in addition to the high-level dashboard view.

Comfort and Confidence

Value Creed’s open communication and ownership of our work responsibilities gives you the peace of mind of knowing that we are hard at work keeping your systems operable and your maintenance and reporting on schedule. Our transparent, accountable project management includes constantly vigilant leaders who see each repair ticket through to a successful resolution. It also means passing along any insights we glean from working with your team on your projects. Knowledge sharing makes us all smarter, more trusting, and more innovative, as we develop solutions that save time, money, and aggravation.

Contact Value Creed and let’s discuss how our transparent, accountable project management keeps you in control while alleviating the hassle of maintaining hardware, integrating applications, and updating reports.

#1 Delivering Quality Client Services in a Dual-Time-Zone Model

It is the aim of the Value Creed team to outperform the rest by delivering on the promise to distinguish its #CTRM Managed Services by outperforming the competition – even the status quo – by providing excellence.  In this three-part series, the team will step back and share why our services are superior in dimensions beyond technical aptitude.  In this post, the team dives into the role of the “Client Director.” This role is the key to success for long-term partnerships for managed services customers.

When IT teams and business users arrive at work to find price inconsistencies and incorrect reporting from the previous session’s end-of-day processes, it exposes companies to unnecessary risk and limits opportunities for maximized profit. The firm cannot conduct business with confidence until the matter gets sorted out, and that could potentially take the better part of the trading day. Unfortunately, most companies in the commodities trading sphere find themselves short of both the time and expertise they need to deal with CTRM platform malfunctions.

But what if you could rely on an extension of your staff to constantly monitor your CTRM system both during the trading day and overnight? 

 

Dual Time Zones – Linked by Seamless Communication, Led by Value Creed’s Dedicated Client Directors 

Value Creed does exactly just that, with its unique-in-the-industry dual-time-zone managed services solution. Our dedicated client director is instrumental in providing the personalized, immediate attention our clients need when problems arise overnight. Serving as a project manager liaising with Value Creed’s global team, the client director serves as our client’s representative, interfacing with our global team. 

A recent incident illustrates how the client director assumes control in order to coordinate and ensure problem-solving initiatives are carried out in a timely manner. By bridging Value Creed’s assets in two hemispheres, the client director works with technicians in our Hyderabad, India office as they monitor clients’ end-of-day processes and overnight reporting functions. When the team encountered a product price that could not be verified it was unable to determine the validity, they reached out to the Client Director for assistance in issue remediation. Had this anomaly – or any other problem in the run/operate/report cycle – occurred during the trading day, it would have monopolized Clients’ on-staff IT professionals’ time. Since it occurred after-hours, it would have wreaked havoc on the next day’s opening and operating procedures had the firm not partnered with a service provider working in dual time zones. But Value Creed’s client director immediately took charge. She made it clear that client satisfaction was the only objective, and to achieve it, the team would need to go the extra mile until the issue was resolved.

 

2 Continents, 1 Mission

Value Creed’s Hyderabad experts’ early detection and understanding of the potential consequences of the questionable price bought our team critical hours in which to solve the problem. Under our client director’s direction, our Hyderabad Run Smart™ crew works on the system malfunctions as soon as data appears corrupted, processes shut down, or reports fail to initiate. In the case of the mystery price, the Hyderabad team was unable to isolate the problem and interfaced with their US-based colleagues. Acting under full authority, our project manager marshaled Value Creed’s resources on both continents. Thanks to her strong leadership, our global and US teams work together seamlessly to alleviate the most pressing issues, resetting servers, clearing job queues, and initiating repair tickets. Value Creed’s onshore client support manager contacted the company to apprise its IT team of the system failure and advised on the next steps for moving forward to resolve the issue.

 

Value Creed escalated the issue until it could isolate the cause and implement a long-term solution. Leveraging people, power and technology in both offices, Value Creed resolved the problem, documented the solution, and closed the case in the time it would have taken other CTRM support firms to discover that something was wrong. This result was made possible by our client director’s refusal to accept less than a complete solution. She made the critical decisions necessary and initiated the processes that ultimately delivered a quick resolution and exceeded the client’s expectations. 

 


Seamless Teamwork

With a knowledgeable and, committed client director looking out for the Client’s vested interests, Value Creed’s US- and Global-based teams have perfected a collaborative workflow that assures overnight  problems are addressed quickly and solutions are expedited:

 

 

Ready to learn how the dual-time-zone protection can save your company money and maximize your productive trading window? Contact Value Creed today.

#5: Keeping Value At Risk (VaR) Reports On Track

Following our previous post on handling outlier data, our 5-part series on the benefits of Run Smart™ CRTM managed services from Value Creed concludes with a discussion of analyzing and managing Value at Risk.

Value at risk (VaR) is one of the most useful risk calculations, as it allows for a consistent analysis of positions and price movements for a given portfolio across time.  By knowing with 95 percent confidence, for instance, that a position or portfolio’s predicted daily outcome will not exceed an established VaR limit, risk managers can make more informed decisions about whether to recommend that traders maintain, liquidate, or increase their holdings in a certain commodity, location, and time period. 

Whether basing VaR calculations on historical price data, the covariance/variance method, or a Monte Carlo simulation, VaR enables commodities traders to visualize how observable market inputs such as current and forward prices, implied and historical volatility, interest rates, exchange rates, etc. affect their risk position.

Consequences of Weak VaR Reporting and Analysis

Position analysis too often depends solely on end-of-day reports that may or may not reflect intraday volatility and trading patterns. The data loses much of its power as the new trading day evolves.  It may be virtually worthless in the realm of automated and algorithmic trading executed by Ai capable of making decisions based on dozens of extrapolated distribution curves generated every second. Accurate VaR reports and intraday transparency empowers more sophisticated trading plans that reduce risk and enable greater profitability.

Without a unified, holistic view of the risks inherent in their positions and portfolio, risk managers cannot precisely evaluate their processes, workflows, trader activities, and external events to determine appropriate guidelines.

Commodity traders who rely on less-than-robust CTRM systems put themselves at a disadvantage. Legacy systems and those that depend on manual inputs and Excel spreadsheets are prone to human errors, inconsistent formatting, and difficulty integrating with scheduled processes and reporting tools.

The Run Smart™ Integrated Solution for Reliable Intraday VaR Reporting 

Value Creed’s integrated CRTM managed service platform, Run Smart™, is easily customizable to any business model. The platform streamlines user-configurable trade rules and risk-management policies for enterprises at any link in the commodities value chain. Run Smart™ interfaces with downstream reporting software and upstream transaction-reporting and data sources. Its reporting capabilities capture, collect, and present real-time market updates, physical stores and portfolio positions. Users can isolate VaR (as well as P&L, credit, and other metrics) by asset, commodity, region, trader, and other inputs. 

Every night, Run Smart™ evaluates the calculated VaR for the portfolio or selected segment with the confidence interval, loss limit, and timeframe established by the user. Breaches are highlighted, so risk managers can reevaluate their position and make adjustments to contain risk.

The platform maintains a record of daily price and VaR fluctuations throughout the timeframe and confidence level the user desires. As asset values change, VaR changes. Risk managers can compare all variables from day to day, plot moving averages, and use statistical methods to spot profitable trends.

Understanding and limiting Value at Risk is a key ingredient in profitable commodities management. Contact Value Creed for a demonstration of how Run Smart™ technology can help your organization make better, data-driven decisions.

This post wraps up Value Creed’s series on the importance of professional managed services for CTRM/ETRM platforms. Read the other four installments to get the full picture:

#1: Overcoming Data Integration Breakdowns For Seamless Daily Starts

#2: How To Proactively Overcome Reporting Integration Failure for CTRM Platforms

#3: Moving Your CTRM Database from On-Prem Oracle to Cloud-based SQL Server

#4: What Do I Do about “Crazy Crude Prices” – Be Prepared for the Unexpected