A storm is brewing for companies that farm, originate, produce, trade, manufacture, or purchase commodities; these companies are facing a raft of significant new business issues and technical challenges. An increasingly aggressive and invasive regulatory regime looms large. Meanwhile, a bewildering array of new trading instruments and exchanges have exploded onto the scene, causing the variety and volume of data collected and processed to balloon. And all of this is happening within the overall context of an ever-more competitive business environment and (at least within agricultural and soft commodities) notoriously complex supply chains.
But as the old adage goes, challenges are opportunities in disguise. So with this in mind, what is the forecast for the industry as it begins to grapple with today’s business issues?
MOVE FORWARD OR FALL BEHIND
These changes, though diverse, all lead to one common remedy: greater visibility across all aspects of a business underpinned by a modern, next-generation Smart Commodity Management platform like Eka’s. Market awareness is more important within these sectors than it has ever been. Formulating effective business and trading strategies increasingly relies on the ability to glean meaningful trends from a vast and growing mountain of complex data.
As a result, there is an increasing need for real-time visibility and analysis of data — money is made and lost according to daily decisions that require accurate and timely position management, risk management and business intelligence. Being on top of the regulatory agenda is also important, given that falling afoul of the latest edicts can land a business with substantial fines and poor publicity. Developing a culture of compliance and improving visibility for regulators is key to avoiding such damaging enforcements
Recent years have also seen highly volatile prices for agricultural and soft commodities. Due to our ever-growing, ever- urbanizing global population, this is expected to remain a permanent feature of the market. And so businesses must adapt by ensuring they have the capability to measure the impact of price fluctuations on business operations. They must be ready to thrive on volatility. The chances of succeeding in such a market are increasingly reliant on the deployment of sophisticated technology in service of various functions, from data aggregation through to trading, business intelligence and reporting.
FEW SOFTWARE VENDORS WILL MAKE THE GENERATIONAL SHIFT
It is these same challenges that are driving product development within the software vendor space serving these sectors. Big data and business intelligence needs are generally recognized but can only be addressed by vendors that have adopted next-generation technology platforms such as Eka Software Solutions. Vendors on older technology platforms will first need to upgrade their technology, typically a three- to five-year process and investment, prior to being able to address big data challenges. Yet areas such as regulatory compliance create a different type of challenge as the rules are often unsettled until the last minute. As a result, vendors need to ensure that they build a certain level of adaptability and agility into their solutions, so as to future-proof them against the barrage of complex new rules. The good news is that the next-generation technology platforms designed to handle big data and advanced analytics also have the flexibility to be quickly updated as regulations are finalized.
What end users in the current environment really need, in order to profitably meet these challenges, is a next-generation, smart commodity management software solution like Eka’s that can provide them with an analytics-driven, end-to-end platform. To be considered a best-of-breed solution, the commodity management software solution must manage: commodity trading, procurement, logistics, storage and handling, processing, enterprise risk and compliance. The software becomes a platform for customers to accelerate growth, increase profitability, improve operational control, and manage risks and exposures.
THE WAY FORWARD
To recap: the modern and smart commodity management solution will help users turn big and complex data into descriptive and prescriptive decision making information. It will increase visibility, assisting businesses with a whole host of daily decisions. Smart commodity management solutions ensure that opportunities are exploited and risks properly addressed. And through a comprehensive approach to regulatory compliance, these solutions will help businesses engender a real culture of compliance. In short, smart commodity management allows users to respond to the business challenges of today and tomorrow.
Smart commodity management solutions will utilize next- generation technology architectures that are web-based and highly modular to provide real-time, fully auditable information with configurable workflows and controls. In an ever-increasing complex, volatile, and fast moving business and commodity environment, a next-generation smart commodity management solution, like Eka’s, is the platform for success.