When initially talking to prospects new to Energy Trading Risk Management software, I am often asked a number of recurring questions. For example, what is ETRM software? What are the benefits of implementing Energy Trading and Risk Management software? And what should I consider when looking at the different Energy Trading and Risk Management software solutions on the market?
As the provider of the only dedicated cloud-based oil trading software solution on the market – Techoil ETRM, I thought it may be beneficial to share our expertise and answer those commonly asked questions.
What is ETRM software?
ETRM stands for Energy Trading and Risk Management. An ETRM system is a software application that would be typically used by oil traders, suppliers, distributors and wholesalers to automate business processes associated with the supply and trading of crude oil, refined products, alternative fuels, renewable products and financial derivatives, the movement and delivery of those energy commodities and associated risk management activities.
Why do you need ETRM software?
Many oil traders, suppliers, distributors and wholesalers still run their commodity/oil trading businesses using manual processes, Excel spreadsheets or outdated legacy systems. Energy Trading and Risk Management software enables operators to automate these outdated processes. This saves money and improves the efficiency of operations by streamlining trading, hedging, credit, cash flow, operations and inventory.
Energy Trading and Risk Management software assists in managing risk and operating complex integrated supply chains for crude products, distillates, petrochemicals and bunkers. It handles complex interfaces easily and effortlessly manages all front, middle and back-office needs, making it a cost-effective option for oil trading companies.
What are the benefits of implementing ETRM software?
By implementing ETRM software companies can:
- Manage market, counterparty and operational risks more effectively.
- Control operational complexity and directly impact profitability.
- Access a consolidated view of the business. This simplifies decision making.
- Improve profitability through trade economics, accurate pricing formulas and MTM.
- Save time so you can focus on your business by streamlining operations to drive greater efficiencies throughout your business work flow.
- Reconcile trades in real-time.
- Have a solution that works across everything from trading to invoicing.
- Drastically reduce errors from manual or double entry through automation.
ETRM software can be supplied on-premise or in the cloud. Cloud-based ETRM software offers the most cost-effective option. These types of solutions are offered using a subscription based model. This means such cloud purchases avoid internal capex negotiations, often saving time in getting a project approved or when securing funding.
Cloud-based ETRM software is also easily scalable, can be accessed from anywhere as long as there is a device with an internet connection, is fast to implement and will always run on the very latest software.
What should you consider when choosing ETRM software?
To start with, make sure the software you choose works for your business and the objectives you set.
Think ‘end-to-end system’ and make sure your chosen solution includes functionality to cover all key aspects of your Energy, Trading and Risk Management activities including:
- Trade and operations (cover everything from trading, contract management and operations to credit control and delivery).
- Hedging and risk management (you want to be able to hedge, monitor, forecast and report).
- Inventory management and reconciliation (for a complete view of your inventory right across the supply chain).
- Financial accounting (think planning, control, compliance and auditing).
- Reporting (to get a complete view of your business performance).
- Integration (make sure you can integrate with third party applications).
When evaluating a solution also think about such areas as:
- Is the software an end-to-end system?
- Does it include risk management functionality?
- Can it easily handle inventory management?
- Will it handle multi-modes of transport?
- How sophisticated is its reporting?
- How easily will it integrate with other systems?
- Is it secure and intuitive?
- How will the system grow as my business grows?
- Can it be customized?
And finally, look to work with a reputable partner who not only listens to your business needs, but also provides a solution that matches those needs.
Here to help you choose the right ETRM software solution.
At Inatech, we work with some of the world’s largest bunkering and oil trading companies. That means we have a solid understanding of the business challenges you face. Combine that with the expertise we have gained by working alongside our parent company, Glencore, and you have access to a team of people who bring unique knowledge and experience to your marketplace.