Mobile Commodity ManagementIn just a few years, mobile technology has reshaped the landscape for businesses everywhere. The growing presence of smartphones and tablet devices in the workplace has forced companies to take a sharper look at the benefits mobile applications offer.

Previously, it was impossible for certain jobs to be performed away from a workstation. The mobile revolution has changed those rules. With the arrival of powerful mobile devices and sophisticated mobile applications, it is now possible for employees to perform tasks, previously restricted to their desktops, from any location at any time. And therein lies the value that mobile technology can offer: the ability to untether employees from their workspaces while increasing productivity. For this reason alone, companies are exploring ways to adopt new mobile solutions into their infrastructure in order to maintain an edge over the competition.

Software vendors across all industries are looking for ways to establish themselves in the mobile frontier. The challenge facing these vendors is to find a way to deliver solutions that make sense in a mobile world. The first temptation is to simply repackage existing desktop software and offer it on mobile platforms. This tactic fails, however, to recognize that a mobile solution cannot comfortably accommodate the same movements and actions that might be found in standard computer software. Vendors must accept that the answer lies in preserving functionality while promoting simplicity.

This fundamental concept has helped distinguish the visionaries in mobile technology from the rest of the competition. As software industries saturated with players hum with promises of new mobile initiatives, only a handful of companies actually deliver on such promises. This is especially true of the Commodity Management world. For almost two decades, Triple Point Technology has outpaced its competitors in this industry by producing unmatched Energy and Commodity Trading and Risk Management (CTRM) solutions. When it comes to mobility, Triple Point is the only Commodity Management company today that has managed to bring mobile CTRM products to market. In just under a year, Triple Point has already managed to produce four distinct mobile applications capable of transforming the way companies manage commodities by empowering staff to perform key operations anytime, anywhere.

To read more about Triple Point’s mobile commodity management solutions, click here.

Ann Surratt
The Commodity Management Blog has been closely following the top Commodity Management issues throughout the year. Not surprisingly, posts discussing Dodd-Frank top the list.  Below is a complete list of the 10 most popular posts over the past 12 months based on views and shares.  We thank you for following us and hope these posts have provided valuable tips on how to manage commodities smarter.

We have some really great things in store for 2012, so here’s to a year of fresh ideas for Commodity Management!

IBJ Awards 2011Triple Point’s QMASTOR PortVu bulk terminal management system has won the prestigious International Bulk Journal (IBJ) IT Solutions Award and was recognized for delivering a significant, measurable return-on-investment. 

QMASTOR PortVu was honored with this award because it is the only complete, integrated bulk terminal management system that manages all the complexities of port operations. It is a proven, multi-lingual solution that is being used across the world by leading resource companies and terminals. PortVu optimizes decision-making and delivers substantial cost savings by integrating terminal operations with suppliers, customers, transport providers, agents, laboratories, and other supply chain partners through one common platform.

The award follows on the heels of Triple Point’s acquisition of QMASTOR, the premier provider of mining software solutions to manage the tonnage, quality, and value of coal and mineral supply chains from “pit” to the point of export, import, or consumption. QMASTOR’s advanced solutions manage and optimize all aspects of mining supply chains including mine planning and scheduling, material tracking, logistical movements, 3D stockpile modeling, grade control, blend management for coal, and other minerals such as nickel and iron ore. QMASTOR also offers solutions for managing port operations and metallurgical accounting.

QMASTOR solutions are a perfect addition to the Triple Point portfolio because they supply all the functionality to optimize an end-to-end coal and mineral supply chain, while at the same time being completely complementary to the rest of the Triple Point product set. The companies’ complementary customer bases, target markets, and product sets create substantial opportunities for continued and accelerated growth.

ChecklistIn recent years, the world agricultural markets have seen a surge in prices and volatility brought about by several factors including poor harvests, sustained demand, increased use of agricultural products for fuel, increased activity on commodity markets and soaring oil prices causing fuel and fertilizer costs to rise. As a result, Growers, Originators and Producers are starting to adopt CTRM systems, typically used by energy companies, in order to gain the real-time business intelligence they need to make optimal decisions around trade execution, position management, and physical logistics.

Triple Point has been helping traditional energy and commodity trading companies manage the unique complexities of their commodity trading and risk management business for over a decade. In order to help Agriculture companies identify the most critical components of a CTRM solution for their business, Triple Point has compiled a checklist of the key functionality Agriculture companies should look for when considering CTRM tools.

Here are seven to consider:

1.    
Trading – A CTRM solution should provide complete control over trading operations and enable traders to better manage current positions and gain real-time information to take advantage of market movement. It should integrate physical and financial trading, improve trading efficiencies with deal entry templates/blotters, provide sensitivity analysis, and enable “what-if” scenarios.

2.     Price Risk Management-  Look for sophisticated analytical tools for portfolio stress testing and sensitivity analysis to run what-if trades. These tools should enable you to analyze real-time position and exposure — market, volumetric, credit, delivery, and FX risk — at granular and rolled-up levels for optimized price risk management.

3.     Chartering and Vessel Operations- Commercial chartering and vessel operations are a crucial part of the agribusiness supply chain and must be seamlessly integrated into the CTRM system.  At a minimum, the system should allow  you to manage all chartering, post-fixture activities including freight risk management, and financial aspects of commercial vessel operations in a single system.

4.     Scheduling- Schedulers must be able to plan, conduct, and optimize complex physical movements in real time. The system should manage the logistical complexities and streamline the supply chain operations required to transport bulk commodities. It should handle all transactions from straight forward physical trade matching, to complex itinerary scheduling involving multiple trades, commodities, methods of transportation, and inventory movements.

5.     Counterparty Credit Risk Management- Recent financial and debt crises demand the ability to proactively measure, manage, and mitigate the risk arising from counterparty default. The CTRM solution should address the entire credit risk process and provide a full range of credit analysis and operational tools in 3 key areas: exposure, collateral, and counterparty management. The most advanced solutions also provide credit analytics.

6.     Hedge Accounting- A key component of any CTRM solution is the ability to manage the daunting set of requirements under hedge accounting regulations, including the detailed testing, documentation, and reporting that must be performed in order to qualify for hedge accounting status. Make sure that the solution provides full compliance with ASC 815 (FAS 133), ASC 815-10 (FAS 161), IAS 39 (IFRS 9) and similar national hedge accounting regulations.

7.     Fair Value Disclosure- The system must provide the tools and framework to define, measure, and manage fair value levels and meet all disclosure requirements for ASC 820 (FAS 157) and IFRS 7 compliance.

Triple Point’s Commodity XL for Agriculture can help you meet all of these requirements.  If you would like to learn more about Triple Point’s CTRM solution for Agriculture companies click here.

Triple Point Commodity XL

In a recent article, Reuters ranked the world’s top independent oil and commodity traders, identifying Vitol Group, Glencore International AG, Cargill Inc., Koch Industries, Trafigura, and Gunvor International as the largest. Four of the top six organizations, Glencore, Cargill, Trafigura and Gunvor, rely on Triple Point’s commodity management software to effectively manage their commodities and enterprise risk.

Triple Point’s Commodity XL™ provides them with a real-time, enterprise view of position, supply chain, and risk. They use the enterprise, multi-commodity platform to deliver superior business intelligence for proactive decision-making and competitive advantage. Commodity XL integrates physical and financial trading, provides sensitivity analysis, enables “what-if” scenarios, and improves business process efficiency across front, middle, and back offices.

Our mission from day one has been to provide the most advanced systems, tools, and models to help clients profitably trade, transport, and store commodities, as well as manage the associated risks. Seeing the top commodity traders in the world benefit from our products reaffirms Triple Point’s position as the leader in energy and commodity management software.

Michael SchwartzI was recently interviewed for the Commodities Now special CTRM supplement by Guy Isherwood, Editor-in-Chief.  I’m sure some of you aren’t readers of Commodities Now (by the way, it’s an excellent publication) so I thought I would make the interview available via the blog.

Guy Isherwood [GI]: What new trends have you noticed in the commodities industry?

Michael Schwartz [MS]: The United Nations issued a press release a few weeks ago stating that the world population, which is close to 7 billion right now, will surpass 10 billion by 2100. Many analysts had believed that population growth would stabilize at around 9 billion globally. It’s amazing to think that the population was 800 million in 1800 and we’re on our way to 10 billion 300 years later. Along with the exponential growth, many non-OECD countries are adopting western life-styles and appetites.

Add to the mix that commodities are becoming harder and more costly to get out of the ground, whether it is oil from tar sands in Canada or iron ore from less developed regions like Zambia. The net effect is that there is a long-term trend of higher commodity prices. In addition to higher prices, we will see more and more volatility caused by a tighter demand/supply equation.

From our perspective, we are seeing companies that have traditionally not been our customers start to adopt the same sophisticated commodity management systems that commodity trading organizations have deployed from Triple Point for years. These new industries include consumer products, chemicals, big-box retail and automotive. High prices and volatility in the raw material markets that these organizations depend on are not a wait-and-see problem, it’s the new reality.

[GI]: You mentioned that Triple Point is working with clients in the food and beverage, consumer products, and manufacturing industries. Can you comment further on what is driving interest from these companies?

[MS]: Higher commodity and energy prices coupled with greater volatility can harm profitability, shareholder value, and credibility with analysts for these companies. Organizations that use large amounts of raw materials and energy recognize that increased commodity volatility is not a short-term phenomenon but a fundamental change in the markets.

A CP executive recently told me that his company views increased raw material volatility as a 20 year issue, not a 2011 problem. Executives in these types of firms are increasingly aware that they can lose market share to competitors with a better strategy for managing commodity and energy prices. For organizations to be successful, the approach used by the purchasing department must be revamped from static “buy to budget” to a more proactive “market-based” procurement and risk management program. The traditional methods of handling rising raw material and energy costs, such as substituting cheaper materials in products and raising prices, might prove necessary but do not take advantage of commodity management best practices to optimize margins – and that’s why early adopters are turning to Triple Point.

[GI]: What extra demands are being made on managers for risk control, and how does Commodity XL™ address them?

[MS]: First and foremost, there are huge levels of price risk in the financial and commodity markets. It’s been reported that we’re seeing three or four ‘100-year risk events’ every year, and we’re almost certainly going to see more extreme events that are outside normal expectations.

Secondly, the recession has made everyone take a much closer look at credit. Credit risk managers used to triage potential counterparties into three groups – definite yes, definite no, and everyone in between. Now everyone is either rejected or sent for assessment. Finally, the markets are more closely regulated. Whether it is hedge accounting, fair value disclosure or the pending Dodd-Frank legislation, there’s no denying the growing importance of standards that require additional transparency into valuations and accounting methods.

Commodity XL™ is the only real-time commodity management and risk system that handles the four key areas of financial exposure set by the Committee of Chief Risk Officers on a tightly integrated platform: market/price risk; operational risk; regulatory risk; counterparty credit risk.

And this is not marketing hype – we’ve created the only true commodity enterprise risk platform by acquiring the leading credit and regulatory software solutions and integrating them into the Commodity XL platform. The solution breaks down individual information silos to get a clear picture of global exposure and firm-wide risk. The Management Dashboard™ business intelligence module provides executives with easy access to an accurate picture of the company’s total exposure.

[GI]: How do you see Dodd-Frank affecting energy organizations?

[MS]: A key challenge is the provision within the Dodd-Frank Act that applies to central clearing of OTC derivative trades (with Europe’s MiFID II legislation soon to follow). Dodd-Frank is a response to the credit crunch, but applies to energy organizations that use derivatives to hedge and reduce risk. The proposed legislation includes an end-user exemption clause for genuine hedging transactions. In order to take advantage of the exemption, firms need to test, document and report on a trade-by-trade basis.

Companies must be able to accommodate the accounting and auditability requirements as part of a complete, end-to-end solution. We’ve been saying for years that organizations can’t manage a commodity trading business on siloed-systems or spreadsheets – the new regulations might be the impetus that finally moves some companies off antiquated systems and unreliable tools.

[GI]: Gartner has named Triple Point Technology a leader in its Magic Quadrant (MQ) for E/CTRM solutions for the past three years. What are your thoughts about the MQ?

[MS]: Gartner is retained by 10,000 companies for its advice, and is top in its field, so it’s absolutely an honour for Triple Point to be consistently recognized as a leader.

What I find most interesting about the CTRM market is that it is evolving in a similar way to other major software markets where there are two leaders for enterprise solutions, like SAP and Oracle in ERP, and other vendors who fill niche areas. If you look at the CTRM Magic Quadrant over the last three years, it’s clear that Triple Point and OpenLink have become the leaders.

Gartner bestows leadership based on ‘completeness of vision’ and ‘ability to execute.’ When I started at Triple Point six years ago, there were five vendors of similar size. It’s been a testament to our market vision and execution that we’ve grown to three times the size of our competitors in those six years.

[GI]: What are some Triple Point highlights from 2010?

[MS]: In 2010, Triple Point launched new solutions for commercial chartering and vessel operations, freight risk management, trade confirmation management, cargo inspection, and strategic planning and procurement. We also announced several major enhancements to our European power and gas solutions.

Triple Point reported record revenue and 52% year-over-year EBITDA growth in 2010. We signed 105 new license transactions and added 41 new customers to bring our total number of customers to 260 companies. 2011 is shaping up to be another record year on all fronts.

We are investing in the success of our customers with several programs designed to encourage strategic alignment. Triple Point has appointed a Chief Customer Officer (CCO) with a commitment to serve customer relationships. Under the purview of the CCO, we’ve added a formal process for client satisfaction surveys and a Customer Driven Development program.

The commodities markets will always be volatile, presenting both huge opportunity and risk. In an industry that is both fast moving and complex, Triple Point will continue to provide its customers with the best solutions, product innovations, training and customer service to gain and maintain competitive advantage.

HMEL LogoTriple Point Technology announced today that HPCL-Mittal Energy (HMEL) has licensed Triple Point’s Commodity Management Solution to manage crude supply and product marketing, logistics, and regulatory risk including compliance with IAS 39 disclosure and reporting. Triple Point continues its rapid expansion across the Asia-Pacific region (APAC) with new customers in energy, manufacturing, precious metals, transportation, and food and beverage.

HMEL is a joint venture between Hindustan Petroleum Corporation Limited and Mittal Energy Investment Pte Ltd — a Mittal Group company and owner of the world’s largest steel company. HMEL was established to operate a major oil refinery in India, producing high value petroleum products.

HMEL selected Commodity XL™ to provide real-time visibility into market position and exposure and to support supply chain logistics and inventory management.

In addition to HMEL, notable Triple Point customers in Asia Pacific include: DCP Trading Shanghai (base metals, Hong Kong), IFFCO (agriculture, Malaysia), Petredec (LPG trading, Singapore), Prime East (commodity logistics, Hong Kong), New Zealand Mint (precious metals, New Zealand), Incitec Pivot (chemicals, Australia), BPCL (Oil, Mumbai), Reliance Industries (Oil with users in Mumbai, Singapore, London, and Houston), and State Bank of India, HDFC Bank, and ICICI Bank (precious metals, India).

“Asia Pacific is a strategic market for Triple Point, and with offices in Singapore, Pune, Sydney, and Chennai, and over 200 staff in the region, we have the infrastructure in place to provide our current and future customers with competitive advantage,” said Michael Schwartz, chief marketing officer, Triple Point. “We welcome HMEL to our Asia-Pacific family and look forward to working with them for years to come.”

Posted in: @Triple Point , Success Stories   |   Tagged  Asia, Commodity XL, CTRM

Michael SchwartzCommodityPoint, an independent analyst firm, issued a research report studying the integration risk between CTRM and ERP systems.  The paper does a good job of capturing the issue:

“The point is simply that just from a cost and effort point of view, any interface or point of integration including between the CTRM software and accounting software or an ERP solution is risky, costly and time consuming and this ignores other aspects of integration risk such as the inability to deploy proper workflow and controls across the application suite; the need for manual reconciliations, maintaining the same data (e.g. contract data) in multiple locations without a proper system of record and many additional limitations.”

In addition to analyzing the issue, the research discusses Commodity SL, Triple Point and SAP’s co-developed solution that eliminates the integration risk.  The research hits the nail on the head as far as the value of the joint solution:

“Triple Point and SAP have developed and offer a seamless solution for commodity management which offers significant benefits for its users over and above the traditional approach of procuring a commercial CTRM solution and then interfacing it to SAP for financials. It virtually eliminates the integration risks and issues discussed above while providing significant benefits for the business. End users are offered a completely integrated suite of business systems where the complexities of ‘gluing’ the applications together is the responsibility of the vendor and where, should any issues arise, there is a single point of contact to get those issues rectified.

As the only SAP endorsed product with over 150,000 hours of co-development time invested, Commodity SL offers SAP users a best-in-class solution to their commodity management requirements that remains unique in the market today and provides significant value to those already heavily invested in SAP.”

Click here to read the entire research report.

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