In the world of E/CTRM software much is changing and at a fair pace. Driven by a plethora of new business needs, massive shifts in technology, and changes in software procurement behavior, it is a software category that is ripe for a true paradigm shift. In a paper written a few years ago, Commodity Technology Advisory (ComTech) outlined a potential solution to some of the issues that have plagued buyers of E/CTRM software for decades.
In that paper, the authors proposed a different approach to architecting E/CTRM solutions – that is creating an ecosystem of software capabilities rather than relying on the monolithic applications that have, or invariably will, become increasingly expensive and difficult to deploy, update and maintain.
ComTech noted that such an approach was both technically feasible given the advent of cloud technologies and desirable as it helped solve the myriad of business issues buyers face today. Since then, business trends have continued to evolve in directions around data management, digitalization and automation, and collaboration. More recently, lockdowns and the need for business continuity have only served to push the envelope faster and further.
2. Redefining ETRM A ComTechAdvisory Whitepaper
INTRODUCTION
In the world of E/CTRM software much is changing and at a fair pace. Driven by a plethora
of new business needs, massive shifts in technology, and changes in software procurement
behavior, it is a software category that is ripe for a true paradigm shift. In a paper written a few
years ago, Commodity Technology Advisory (ComTech) outlined a potential solution to some
of the issues that have plagued buyers of E/CTRM software for decades1
. In that paper, the
authors proposed a different approach to architecting E/CTRM solutions – that is creating an
ecosystem of software capabilities rather than relying on the monolithic applications that have,
or invariably will, become increasingly expensive and difficult to deploy, update and maintain.
ComTech noted that such an approach was both technically feasible given the advent of cloud
technologies and desirable as it helped solve the myriad of business issues buyers face today.
Since then, business trends have continued to evolve in directions around data management,
digitalization and automation, and collaboration. More recently, lockdowns and the need for
business continuity have only served to push the envelope faster and further.
1. https://www.ctrmcenter.com/publications/white-papers/ctrmcm-architecture-approach-20-year-old-condundrum/
As ComTech stated at that time “Throughout, the
twenty-year history of the software category, the
perceived “Holy Grail” has often been to develop a
singular comprehensive solution - one that covers all (or
at least the most common) commodities, geographies,
supplychains,andassets.Unfortunately,experiencehas
proven such a solution to be more or less impossible to
commercially achieve and support - and yet, there is still
a lingering sense in some corners of the market that this
remains the ultimate goal. Though many lessons have
undoubtedly been learned as some vendors (and a few
market participants who invested in bespoke solutions)
tried to build the singular solution that could address any
prospect’s needs, ComTech now believes that the “Holy
Grail” - a singular, monolithic Commodity Management/
CTRM solution that addresses all commodities
and markets – is almost certainly impossible to
commercially achieve and, frankly, is ultimately probably
not desirable. Rather, the most reasonable approach is
an architectural approach – one that combines specific
modules or individual products that can address the
specific needs of an individual company and the market
or markets in which they operate. It is our thesis that
CTRM/Commodity Management is, and should be, an
architecture first and foremost - one in which specific
technologies and solutions are deployed to solve the
litany of complex problems faced by today’s market
participants.”Sincethatwriting,theauthors’assessment
has not changed.
8. as a single data object. Counterparties can validate the
trade there reducing to a minimum a lot of often very
manual reconciliations and agreements on trades. By
joining the ChorusLink consortium, trade reconciliation,
settlement and regulatory reporting becomes even
easier. Using an industry standard trade repository like
ChorusLink also ensures that users retain control over
their data as opposed to having it under the control of
a vendor and stored in a standard format rather than a
vendor-proprietary format. Each user company is a part
owner of the repository that will initially utilize Previse
for maintenance and support but which, after a quorum
has been reached, can dictate its own directions and
future. In this model the users own their data and where
it is stored.
Position management of both physical and financial
transactions is a key aspect of trading and it requires
both speed of performance and to be near real-time
to inform decisions. It is also where major controls
are placed in terms of various limits and so on.
Previse’s Coral application combines information
from ChorusLink, internal trades and production/
consumption forecasts, and market prices providing
input for business intelligence and risk management.
Previse also desires to create an ecosystem of low cost
applications that can be quickly and easily adopted
by users via an app store marketplace offering public
and private applications. By publishing API’s and
other guidelines, third-parties including other vendors,
consulting companies and even the users themselves,
Redefining ETRM A ComTechAdvisory Whitepaper
Previse Systems will
become the ‘Apple’ of
the ETRM space allowing
the delivery of a full and
complete product using an
ecosystem of applications
and API’s
Jonas Nihøj, Director of Energy Trading & PPA
9. Redefining ETRM A ComTechAdvisory Whitepaper
can add cost effective applications to the app store
and offer them via subscription thus ensuring a healthy
variety of applications from various sellers. Previse sees
this as opening up a development ecosystem around its
CoralapplicationandontopoftheChorusLinkdatabase
and states “that 99% of the functionality available in its
UI is available from API’s that can be called.”
This approach represents a real shift to the paradigm
in that the vendor is not attempting to build everything
for everyone (the ‘all singing, all dancing’ application)
but has instead chosen to focus on delivering a ‘best
in class’ position keeping application with Coral. It has
then broken out the database as a separate horizontal
component and offered it in a collaborative manner
allowing all parties to gain deep efficiencies in the trade
confirmation area to start with - but with potential to
address other areas in the future. Finally, by publishing
clear API’s and providing an app store infrastructure,
it allows others to develop vertical and horizontal
applications within a defined ecosystem.
The benefits of this approach are many and include;
• Speed of delivery is improved meaning that rapid
industry change can be reacted to innovatively and
rapidly,
• Lower cost – in the Software as a Service model,
costs are based on usage and all-inclusive; however,
the App Store concept creates a competitive market
that keeps prices down as well,
• The entire approach allows for collaboration either
The entire idea is unique
and will reduce the costs
of ETRM substantially
while providing an enabling
ecosystem to support
innovation
Jonas Nihøj, Director of Energy Trading & PPA
11. ABOUT PREVISE SYSTEMS
Previse Systems develops innovative IT solutions for
energy trading and related processes based on the
latest technology.
As a start-up, we combine creativity, out of the box
thinking and disruptive concepts with a solid vision on
how we can reshape IT infrastructure for energy trading
companies to increase intuitiveness, efficiency and
scalability.
Previse Systems believes that the objectives of in-
formation technology primarily consist in suporting bu-
siness operations in the best possible way and at the
lowest possible cost.
Traditional approaches at energy trading companies
have been showing severe systemic shortcomings
to meeting these objectives in a satisfactory way,
exacerbated in recent years by rapidly evolving markets.
Previse Systems proposes a new paradigm for energy
trading software to address these shortcomings.
For more information, please visit
www.previsesystems.com
At ChorusLink, our purpose is to spearhead a change of
paradigm for energy trading software. We think ongoing
trends in energy markets and technology platforms one
step further and follow the vision of a common platform
for energy trading data. This conceptual quantum leap
facilitates process efficiencies, optimises investment
returns on IT spending and fosters future infrastructure
adaptability on an unprecedented level.
ChorusLink was founded by Previse Systems as the
cornerstone of a radical re-design of the software
function in energy trading and risk management
(ETRM).
ChorusLink redefines the mechanics of energy
trade data storage by introducing the common trade
repository. Moving to a single data object per trade
and a standardized format in a highly performant trade
repository enables you to facilitate automation and
streamlined processes at significantly lover costs.
For more information, visit www.choruslink.ch.
ABOUT CHORUSLINK
12. 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, whose 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:
www.comtechadvisory.com
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 CTRMCenter at:
www.ctrmcenter.com
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