INSIGHTS FROM AMPHORA
When an ETRM implementation begins one of the first items a vendor will ask the client for is their so-called 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.
Reference data includes items like Commodities, Markets, Units-Of-Measure, Calendars, Price Source, Users, Counterparties, Currency, Credit Terms, GT&C, Payment Terms, Delivery Terms, Additional Costs, Locations, Mode of Transport, Specifications, Bank Accounts, for example.
Why is it important?
Delays in obtaining this reference data can significantly impact the implementation timeline so it is crucial that the client dedicates resources at the start of the implementation to gather all this key data.
In fact, we encourage our clients to begin filling in our reference data tables sometimes even before contracts are signed.
If the reference data is in the public domain, the Amphora business analyst will enter this data on behalf of the client. For example, holidays will be downloaded from the price providers. Most data are available this way, but the client firstly needs to document the commodities/markets/pricing indices to be traded. Often, these will also have been set-up for previous clients, so the business analyst has a “head-start” on the task. This allows the implementation to begin with good momentum with us able to enter trades within the first week of the project.
For a clean go-live, Amphora will only enter reference data that is relevant at the time of the implementation for existing trades and any additional data the client suggests that they may need in the upcoming months. Once live, the client takes control of this reference data, with help from training sessions, manuals, the support team, and business analysts provided by Amphora. This allows the client to scale up the offering at no extra charge once they are live, (apart from additional user licenses), for example, by adding a new commodity, without the need for an upgrade.
During the implementation phase, a record of when the reference data was entered into the environment is recorded, with a weekly report sent to the client. This reference data will evolve during the implementation as new commodities, locations, MOT are required.
However, loading what we know on day 1 of the implementation enables real test cases to be produced and demonstrated during the scoping and requirements phase with due diligence early within the implementation (3 weeks is the aim). Often this is to users who may not have been involved in the CTRM selection process whose input may uncover additional functionality requirements or gaps that were not previously identified. Any gaps that are noted during this stage will have a solution provided for go-live. It is therefore important for all users to view the system, with real examples using “live” reference data, early in the implementation and to explain/document their individual needs.
Examples of Reference Data
An example of this implementation could be the reference data items, “Currencies” and “Units of Measure”. Only the currencies and units that are actively being used by the business will be created for the go-live, rather than entering all the global currencies and units. This allows for more efficient use of the software, with the user having a smaller selection to choose from in each of these dropdown fields.
In Amphora’s software, the reference data tables will typically ask for a “Code”, “Short Name” and “Full Name”. The Code (max 8 characters) will only be used by the support team through the back end and will not be displayed in the user interface. The Short Name (max 15 characters) is displayed in tables, position grids, reports, etc, where a lot of data is to be shown in the user interface to save space and be more economic. The Full Name (max 40 characters) is used to display the data in documentation that is often shared with counterparties, e.g. contracts, and invoices. The client can ask Amphora to use their own naming convention for these table or choose their own.
Unit conversion factors will be agreed with the client. These can be generic, commodity or trade specific. The same unit “type” only generic will be required, e.g. Weight to Weight, 1000g = 1Kg. If a unit conversion is required across a unit “type”, then this will vary across commodities, e.g. Weight to Volume, BBL to MT, will require the density of the commodity.
“Markets” are used to price the commodity. These can simply be the exchange they trade on, (ICE, CME, LME, etc), or an internal/published physical price based on the delivery term and location, e.g. FOB SINGAPORE. The trading period information for these markets will be obtained from the exchanges by the business analyst or from the client, e.g., option expiry date, last traded date.
Payment Terms are entered based on an event and number of business/calendar days after/from, e.g., 10 business days after Bill of Lading. Location codes are created using ISO Alpha 2 country code followed by 3 loc code, e.g., Amsterdam= NL AMS. For Delivery Terms the standard incoterms 2020 are entered that the client is currently using, along with any non-standard terms they require.
Clients can also create their own generic fields which can either be free text, a calendar for date selection, or a dropdown with pre-populated options. If a drop-down list is requested, this will count as an additional reference data field, with the reference data needing to be entered.
Language of Reference Data
Amphora unique schema allows multiple language setting for its reference data. A counterparty name can be entered in English, Mandarin and Arabic with one language displayed on auto-generated documents, for instance, the contract or invoice, while another language can be displayed in the user interface.
Reference data is that data that defines items commonly referenced over and over in trading and risk management. It is a key part of your implementation and gathering this reference data early will aid in delivering a good and fast installation. Amphora can help you gather and load the initial reference data with a view to training users how to do it for themselves after go-live thus increasing the value and flexibility of our software.
Amphora is a unique provider in today's commodities marketplace. We offer CTRM and Shipping services under one roof, allowing clients to go to market quicker and for a significantly lower cost.
Sign up to our monthly newsletter to receive more industry-related news and articles.