By definition, the commodities industry has always been a big data business. Physical trades that are hedged with financial derivatives create thousands of individual data points. And each of those data points represent multiple decisions to be made and perhaps reconsidered before the trade is eventually closed. Prices move, markets change, and regulations get updated. (Learn more in "The Benefits of Analytic Solutions Focused on Commodities.")
All of this data drives complexity in decision making. Those companies who are best equipped to leverage the data available to them to make the best decisions will gain a competitive advantage. It's a whole new world. No longer is the typical commodity trading and risk management (CTRM) software system adequate for companies exposed to commodity market risk. While the ability to capture the data that surrounds each transaction or engagement is still required in CTRM software, that functionality alone is not enough. As margins tighten and conditions get tougher, commodities companies need systems that do more.
To remain competitive, today’s commodities companies need next-generation systems that support real-time decision making to move beyond data capture to data analytics. The ability to analyze information to create predictive models allows firms to develop accurate, repeatable formulas that take into account market conditions to identify optimal scenarios. Using advanced visualization techniques coupled with user-controlled, predictive analytics, commodities companies can optimize operations.
Commodities companies can no longer afford to wait days and weeks to understand market changes, analyze the alternatives, and make decisions. Instead, all business users need the power to analyze data the way they want. The solution that will enable real-time decision making requires two components: the right technology to handle the large volume of data generated by the commodities industry and built-in commodity specific intelligence to analyze the data. In addition, the most useful analytics solutions will enable business users to start using the solution immediately without an extended and costly implementation project.
Most companies have access to lots of data; but without an integrated view of the data, it can be of limited use. Frequently, different categories of data are stored in different systems and these systems don’t necessarily talk to each other. So, companies end up with multiple spreadsheets to analyze data coming from multiple systems.
In addition to managing disparate data coming from multiple systems, commodity analytics solutions that support decision making must be able to process large sets of data quickly. Commodity transactions are complex and have huge volumes of data. Extremely fast processing speed is required to traverse all the data to deliver timely answers to users.
Generic business intelligence tools do not offer enough capability for commodities companies. Instead, what’s needed is commodity specific intelligence that will enable companies to get answers to their questions faster.
Commodity specific intelligence will enable commodities companies to quickly answer the most critical questions such as 'what type of profits or losses will result in the future if I continue with my current trading strategy?'
For truly useful analytics, business users should be able to create their own analytics, then be able to customize those analytics on an ongoing basis as the needs of the business change. In fast moving markets, the delays caused by relying on the IT department or other specialists to create analytics render the results useless.
Workers on the move can’t be tied to a desktop - they need decision support wherever and whenever they are working. Their analytics solution should be accessible from all mobile devices as well as their office workspace.
All of the issues described above are the reasons why Eka has developed Eka Analytics. Analytics are the future of commodity management. Commodities companies need to look at advanced analytics solutions like Eka's to ensure future success
Geared specifically for commodities companies in the agriculture, manufacturing, energy, and metals industries, Eka Analytics provides traders, risk managers, analysts, supply chain/logistics managers, IT specialists, back office personnel, and executives with previously unavailable insights into key business areas.
I encourage all of you to take a look at your analytics strategy and have a conversation with Eka's analytics experts. It will be time well spent!