Nickel in demand
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operations<br />
and effort spent on manual reconciliations<br />
of <strong>in</strong>ternal and external data. Information<br />
completeness can be ensured and<br />
repeatable processes created to further<br />
reduce the chance of errors rippl<strong>in</strong>g through<br />
the organization. Bus<strong>in</strong>esses that have made<br />
the transition to commodity management<br />
wonder how they ever managed without it.<br />
7. Secure the best<br />
bus<strong>in</strong>ess results<br />
Smart commodity management systems<br />
give traders and risk managers the ability<br />
to simulate new transactions <strong>in</strong> the current<br />
book, analyze multiple scenarios and then<br />
optimize portfolios and execute on the<br />
best outcomes. Although spreadsheets<br />
can provide some of this functionality<br />
with some advanced programm<strong>in</strong>g, the<br />
circumstances <strong>in</strong> which spreadsheets are<br />
normally deployed suggest it is unlikely.<br />
More to the po<strong>in</strong>t, commodity<br />
management systems provide this outof-the-box<br />
and <strong>in</strong> a multi-user, real-time<br />
environment. Add <strong>in</strong> advanced analytics<br />
that are embedded <strong>in</strong> next-generation<br />
solutions like Eka, and traders suddenly<br />
have real-time access to accurate P&L,<br />
VAaR, and mark-to-market exposures.<br />
These, and other metrics, can be<br />
cont<strong>in</strong>uously updated, with optimized<br />
scenarios be<strong>in</strong>g ranked to allow a trader<br />
to quickly identify the most profitable<br />
outcomes before enter<strong>in</strong>g a deal.<br />
8. Keep stakeholders on side<br />
Like it or not, there is no escap<strong>in</strong>g the<br />
corporate governance agenda. Commodity<br />
management technologies have evolved<br />
to fill this need and are <strong>in</strong>creas<strong>in</strong>gly seen<br />
by <strong>in</strong>vestors, creditors, rat<strong>in</strong>g agencies<br />
and shareholders as an <strong>in</strong>dication that<br />
governance and risk management is be<strong>in</strong>g<br />
taken seriously.<br />
The latest <strong>in</strong>carnation of commodity<br />
management systems have been designed<br />
“The latest <strong>in</strong>carnation of<br />
commodity management<br />
systems have been designed<br />
from the start to provide<br />
a secure, official and timestamped<br />
version of events”<br />
from the start to provide a secure, official<br />
and time-stamped version of events that<br />
can be verified aga<strong>in</strong>st external data <strong>in</strong><br />
case of audit, research or <strong>in</strong>vestigation. It<br />
is a critical design feature of systems like<br />
Eka, rather than an accidental add-on.<br />
Not only do commodity management<br />
systems ensure better, more competitive<br />
bus<strong>in</strong>ess decisions but they also provide<br />
reassurance to the markets on the validity<br />
of all f<strong>in</strong>ancial statements and disclosures.<br />
This <strong>in</strong>creases confidence at a time<br />
when it has never been more valuable.<br />
Not surpris<strong>in</strong>gly, external and <strong>in</strong>ternal<br />
stakeholders like the demonstrable<br />
commitment to transparency that<br />
commodity management systems offer,<br />
as well as the visibility that helps mitigate<br />
multiple types of risk <strong>in</strong> today’s global and<br />
volatile markets.<br />
About the authors<br />
Michael Schwartz<br />
Executive Vice President & Chief Market<strong>in</strong>g<br />
Officer of Eka<br />
www.ekaplus.com<br />
Roger Schaffland<br />
Manag<strong>in</strong>g Pr<strong>in</strong>cipal at Axcelerus, a commodity<br />
advisory and risk management specialist<br />
www.axcelerus.com<br />
BE Monthly [ Aug 2014 ] 25
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