Many companies have started investing heavily in Commodity Management Solution (CMS), emphasizing having one central system that can function in both ERP and Commodity Management solution. However, businesses are not entirely convinced that they are unlocking the full benefits of their investment. But suppose the company has the right tools. In that case, it can share information throughout the business, and it can adequately manage and profit from the disorder and volatility found in the commodities world.

Since commodities are traded in different exchanges and currencies, their monetary and trading values differ in different situations; hence the Commodity Management solution + ERP system should be designed accordingly. Giving organizations the flexibility of extension of profitable trades or purchases reduces the workload at the back office and provides complete control on risk and trading or buying positions. Some companies are tempted to cut costs or defer expenditures by delaying the upgrade of existing CTRM software in current market conditions. However, properly managing transactions, exposures, risks, and regulations accurately and promptly become even more critical in these challenging market conditions.

A good solution is needed in these challenging scenarios to relieve risks of price, credit, legal, regulatory and operations, by an audit workflow. It audits and facilitates analysis to optimize physical assets, improve operational efficiencies, and eventually improve profitability.

Given the margins have declined, any human error can further impact the profit margins. For example, research says, almost 88% of work done on spreadsheets has errors. A good, robust, and reliable Commodity management solution reduces the impact of human errors and thoroughly evaluates risks before finalizing a deal. With so many benefits to consider, companies need to consider the following before investing in CMS+ERP solution –

  • Will it give real-time access to internal and external credit rating changes and help you define practical credit limits?
  • Will it improve the ability to manage cash, collections, and borrowing capacity and calculate cash flows and other financial activities?
  • Will, it let you define a more effective hedging strategy?
  • Will it provide transparency to manage contracts, positions, capture pricing data

Once as a company, you understand the landscape and pick up the right system, a world of capability and expertise are available for risk management and business process optimization. In addition, the ERP+CMS solution can help develop compliance and improved visibility for regulators, helping avoid disciplinary actions. The chances of success are now by reacting proactively to industry change and volatility.