Prague E/CTRM Technical Conference by CommodityPoint Marks the Birth of a New Industry Conference Series
The E/CTRM Conference in Prague on May 23rd was well-attended and had great feedback on its value as an event in the energy/commodity trading and risk management space. For us at CommodityPoint, the positive feedback was gratifying, as it was our first- ever attempt at pulling off a conference.
The conference kicked off with a keynote by Mr. Rob Pringle, Head of Global IT for Gazprom Marketing & Trading on the topic, “CTRM for a Global Trading Business: Does Utopia Exist?”
Mr. Pringle started out by introducing the Gazprom operation before defining his terms including the meaning of “Utopia.” He posed many of the common questions regarding CTRM solutions (Buy versus build? One or many? How to deliver and operate? and so on), drawing on his own expertise and upon on his company’s experiences to qualify and explain his observations and answers. One of his key points was that solutions are about technology, process and people and that CTRM software was just the technology. Another key point was that many view “Go Live” or Day One of a CTRM software implementation project as their ultimate goal whereas in reality, that was just the beginning. The challenge was how to stop the CTRM software from becoming legacy.
The second speaker, Mr. Aviv Handler, Managing Director of Sirius Solutions, to some extent continued the theme discussing, “Do Commodity and Energy Traders Learn from Investment Banks’ Approach to IT?”
He pointed to the differences in approach and attitude between banks and asset heavy trading firms in their approach to delivering solutions noting that banks spend more than double on IT while energy firms are still getting used to the magnitude of spend required.
Next up was Mr. Michal Skalka, Director of Trading at CEZ. He provided an interesting historical perspective on CEZ’s trading operations versus the evolution of the
Czech and regional market and the technical challenges that posed. He provided details of the complexity of the technology solutions that underpin the business processes at CEZ and commented that “real life trading businesses are too complex to be handled by one system”—a statement that resonated throughout the entire conference. He also commented on the key issues people faced in the industry in implementing solutions including change management, systems integration and daily maintenance.
The last presentation prior to lunch was by Dr. Mark Earthey, Product Manager at Triple Point. Dr. Earthey provided an entertaining and detailed evaluation of a number of key issues and challenges facing energy traders in Europe,
including supply and demand, infrastructure issues, stricter emissions regulations, green changes to plant mix and the increasing regulations and oversights now in place or being contemplated. Something he terms the “Perfect Storm for Energy Trading.”
The afternoon sessions commenced with a presentation by myself on the results of our 2010 study looking at alternative Delivery Methods for CTRM Software1.
I was followed by Mr. Brain Hudson, Director, and Mr. Marty Makulski, Partner, Opportune who looked at the relative complexity of the requirements for physical systems across a variety of industry segments and commodities. They observed that vendors and platforms that could cater well for physical crude oil were perhaps the best placed in eventually being able to meet truly cross commodity needs.
Next up was another joint presentation with Mr. Hans van Dijken, Partner, KYOS Energy Consulting & Mr. Travis Nadelhoffer, Director of Energy Products, LIM, A Morningstar Company discussing, “End to End Forward Curve Management. They addressed data collection, data formatting and curve generation pointing to issues around the source and capture of data in particular. They also suggested that pushing curve data into an E/CTRM solution was a complex process that needed to be better defined up front favoring a stand-alone forward curve management tool integrated with the E/CTRM software.
This presentation was followed by another fascinating industry presentation by Mr. Valter Marques, Internal Controller and Risk Manager, Metinvest International SA on, “Risk Management in the Steel Industry.”
Mr. Marques had previously worked in Cotton Trading and he drew upon his experience in these important commodities to discuss many CTRM issues. Of particular interest was the company’s use of automated business processes in its CTRM solution that provided additional controls and had many business benefits including being able to improve its credit rating with the banks.
Mr. Alan Gunn, SVP of Product Marketing at SolArc, then stepped up to deliver a thoroughly entertaining and compelling presentation titled, “Where CTRM Misses the Mark and the Future Which is CTRM 2.0.”
Mr. Gunn used his experiences of working in the industry to describe what V1.0 of CTRM was, and why it had issues. Pointing to the complexity of the requirements, he noted that there were at least 8,505 permutations of different types of customers all with varying sets of requirements. In looking at V2.0 of CTRM, Mr. Gunn suggested that the vendors must support interoperability between their systems to allow buyers to pursue a best of breed strategy, must rapidly move to more advanced risk analytics and must utilize different technologies to provide traders with what he termed “Three Screens and a Cloud.”
The last presentation was Mr. Nagaraj Meda, Founder, Chairman and Managing Director, Transgraph Consulting on the topic of, “Multi-dimensional Risk Analysis.” Nagaraj went through many of the issues and challenges that risk managers face in conducting risk assessments showing real world examples in the process. The event finished with a round table discussion with the afternoon’s speakers participating.
CommodityPoint thank our main sponsors (Brady PLC, Eka, LIM, Opportune, Sirius Solutions, SolArc and Triple Point) for their support, the break sponsors (Pioneer Solutions, TransGraph and TRADEPAQ: TRM), speakers and attendees for helping to make the first E/CTRM Technical Conference by CommodityPoint a success. Now, our focus is on the Houston Conference on July 21st at the Four Seasons Hotelwe hope to see you there.
Note: For more information on the Houston Conference, please visit www.CTRMConference.com.
1 Alternative Delivery Mechanisms for CTRM Software, CommodityPoint Report, 2010
