With technological breakthroughs allowing practically every company to rewrite its operating environment, an increasing number of industries are adopting technology to reap the benefits of enhanced productivity, efficiency, and cost savings. Especially in the wake of the epidemic, the entire planet is undergoing a digital transformation in every industry, including the oil and gas industry.
Among the changes that companies across the world adopted during the pandemic, the shift to remote work was the most relevant one. Digital technologies have undoubtedly enabled oil and gas companies to operate remotely, reducing the number of employees in the field and processing plants, lowering production costs, and increasing flexibility in responding to market challenges.
Given the volatility of crude oil and natural gas prices, as well as the demands of exploration, feedstock procurement, and distribution, oil and gas companies must manage significant commodity risk and complexity throughout their upstream, middle, and downstream activities. In addition, they must deal with a massive quantity of data every day, as well as the logistical hurdles of getting products from the factory to the market, all while seeking to cut down prices.
The risk is even higher in oil and gas trading since it involves the exchange of physical commodities and unpredictable weather, natural or man-made disasters, and so on only add to this risk. These companies also face other challenges such as price spikes, poor market conditions, high operating costs, etc. Oil and gas companies, therefore, should select the most effective digital technologies and solutions for these purposes in the face of declining revenues and corporate budget restraints.
This is where CTRM becomes relevant.
What is CTRM?
CTRM (Commodity Trading & Risk Management) refers to a type of software used by commodity trading firms to manage their business processes. Introduced to simplify the intricacies of commodity trading and make traders’ lives easier, the technology aids in commodity traders’ day-to-day activities, such as risk management, logistical oversight, and so on. Commodity traders may use CTRM software for a variety of purposes such as planning, calculating logistics, and storing important data.
CTRM for digital transformation
Now, CTRM is driving the digital transformation in the oil and gas industry. Here’s how.
Increased scope for personalization
Conventional ERP software provides a standard model for all commodity trading companies. As a result, any variation in providing specialized functionality is removed, causing issues for traders working with different commodities. This difficulty is solved by a CTRM, which provides tailored features for each firm.
Increased efficiencies due to automation
Modern CTRM software aggregates data without the need for manual interaction with automated methods. Therefore, Trading firms no longer have to spend hours, days, or even weeks gathering data and manually entering it into spreadsheets in order to generate reports.
Automated systems can perform the task better, faster, and with fewer errors.
Rapid implementation
CTRM software takes half the time and effort to go live and fully functional when compared to traditional ERP solutions. Modern CTRM systems also have a cloud-native feature that enables businesses to swiftly transfer data without fear of losing any critical information.
Accurate insights
In today’s unpredictable, global commodity markets, commodity management necessitates both transactional data management and advanced analytics. A CTRM system not only collects data from prior systems but also extracts data from across a commodity trading company’s value chain. This provides firms with access to large amounts of data, allowing them to develop relevant insights automatically.
Improved risk management
Modern CTRM systems provide more effective risk management by providing a current, accurate, and complete view of exposure, pricing, market circumstances, and more. Hence, Commodity trading firms can keep on top of risk drivers by using real-time data and analyzing it.
Closing thoughts
In the post covid world, it’s no longer practical to hold back companies with obsolete technology. The new normal is to make efficient digital technologies like CTRM systems widely accessible. Not only will this drive digital transformation in the industry, but it will also lead to increased efficiencies and revenues.
Looking to optimize your commodity trading businesses’ supply chain and overall business efficiency? Robo-Commodity, a comprehensive business solution for the commodity trading industry from Robosoft Solutions, has got you covered. A leading global IT consulting firm delivering business solutions across industries, Robosoft Solutions is backed by 17+ years of experience and an ever-growing client network. To learn more about Robosoft, click here.