Thought Leadership:
CTRM Buzzwords Glossary
Within the CTRM world, a bunch of phrases are continually used. This article takes a step back and highlights what is meant by a CTRM vendor when using each of these, in a Buzzwords Glossary.
Adaptable
A CTRM will be used by multiple clients, each may need to adapt the solution according to their own business requirements. During the implementation the vendor’s business analysts will discuss with the client what they require and then set the configuration data within the CTRM accordingly. A simple example could be what fields are to be mandatory when capturing a trade.
Alerts
A CTRM will be able to alert users if certain conditions have been met, such as a VaR limit breech or error logging. Automatic emails can be generated and sent to a pre-specified group of users.
API
Most CTRMs will have a comprehensive list of REST APIs, (Representational State Transfer Application Programming Interface), allowing access to data contained within the CTRM with full audit capabilities. These APIs will be fully documented and are scalable. Modern CTRMs will not require developers to write code for an integration to occur. Due to the documented interface, integrations should be easy to use, requiring minimal resources to enable any requests.
Automation
A CTRM will be able to automate certain tasks, such as trade entry from exchanges, capturing market prices and end-of-day processing.
Blending
Crudes can be blended when the same storage or pipeline are used. Blends also occur when creating gasoline components.
Customise
A CTRM should allow users to choose and tailor applications and reports based on their preferences. A layout for a trader will be different to that of a user from operations or back office. It is therefore crucial to allow users to amend and share layouts/searches on the fly without the need to involve the vendor.
Fast, Flexible Implementations
A CTRM will offer flexible deployment options, so the client can choose to either host the solution on-site or be cloud based. The pros/cons of both have been discussed in a previous article which states, most smaller companies, tend to opt for a cloud-based CTRM with the benefits of reduced initial cost, regular free optional upgrades, with minimal input required from the client and a faster time to deploy.
The implementation time should be measured in weeks (and not years!). Most CTRMs can be implemented within 12 weeks, with a guide to a successful implementation detailed in a previous article.
Fixed-Fee
The CTRM billing will not have any surprises, such as, time and expenses. Set fees will be agreed for the implementation and ongoing user licence which will include free, optional upgrades. This fixed fee cannot be changed.
Integrations
A CTRM does not live alone but is part of an ecosystem containing other software. It has never been easier for multiple systems to be used together, increasing the efficiency of the organisation.
Legacy
A CTRM with a proven history spanning across decades.
Modern
A CTRM should be built using current advanced technologies such as Microsoft .NET, SQL Server and Azure.
One-Branch
A CTRM vendor will try and keep all their clients on the same core branch. This will mean that these clients will be able to regularly, automatically upgrade for free, benefiting from the continued added enhancements that other clients may have contributed to.
Out-Of-The-Box
A CTRM vendor will often state something is out-of-the-box functionality. This implies that as standard the solution provides this without the requirement of further coding. The client may need to add reference data to enable the functionality. For example, out-of-the-box, the CTRM can capture exchange traded commodities, however the client would still need to enter the products they trade on the exchange into the CTRM.
Power BI
Most CTRMs will be able to connect to Power BI (Business Intelligence) which is a Microsoft product that turns data into a visual report.
Proven
The length of time the CTRM vendor has been in the industry is a good indication if they have a proven solution. Having more than 20 years of experience providing CTRM solutions and a growing client base are some factors that would indicate they have a proven solution.
Real-time Data
A CTRM will provide real-time updates to data. For instance, as soon as a trade or logistical activity is entered/amended, the risk will be automatically updated.
Reference Data
Reference data is the data that is used to populate fields on screens that use a dropdown of choices, and the user selects the required entry from the dropdown list. Industry standard reference data is pre-loaded for the client.
Please see a previous article for more information on CTRM Reference Data.
SaaS
A CTRM will provide its Software as a Service. This will take the burden of day-to-day managing the infrastructure, application management, user and access management, security, availability, monitoring as well as handling infrastructure changes when application architecture changes.
Scalable
When purchasing a CTRM the core business requirements when implementing needs to be covered. However, the solution should also allow the flexibility to scale up in the future as the business evolves. The CTRM should therefore train the client to add themselves, new business entities, commodities, markets, etc. at no extra cost with minimum effort.
Secure
A CTRM will provide comprehensive security.
Stable
It goes without saying that the CTRM solution needs to be reliable. The system performance is key, should not crash and each action should be consistent in the time it takes to action.
Stand-Alone Applications
A CTRM is often broken down into stand-alone optional applications. This will enable the client to select what applications are necessary for go-live which will reduce the cost offering compared to a solution that adopts an all-or-nothing approach. The additional benefit is the ability to offer the release of individual application enhancements at more regular intervals, as opposed to waiting for the next release of the whole CTRM.
Tenancy
CTRM can be either multi or single tenancy. Multi is cheaper as numerous clients will be on the same tenancy. However, a single tenancy approach allows the client to choose the exact location for the tenancy, will be able to benefit from independent upgrades and improved security.
UX
The CTRM should be rich in functionality but the user-experience, UX, is also key in client satisfaction. Users want to perform common actions easily, with as few mouse clicks as possible, using a clean user interface (UI).
Workflow
A CTRM will provide customisable, streamlined workflows for each business unit, to allow the user to monitor the steps of the trade life cycle relevant to their role.
Real time commodity trading and risk management software