In the last decade, a quiet revolution has occurred within the E/CTRM (Energy/Commodity Trading and Risk Management) software category as vendors and users have increasingly adopted the cloud-computing model. This move has been driven by demand largely for more affordable E/CTRM software as reflected by a lower total cost of ownership. Increasing regulatory and shareholder scrutiny has meant that even smaller commodity traders need to abandon spreadsheets and similar unstructured and difficult to audit tools in favor of more robust solutions. However, even the smallest of commodity trading companies has pretty broad and complex requirements meaning that they actually still require a fully-fledged application to meet their needs, but one that fits within a budget that reflects the size of their business. In recent years, consumer and business cloud-based applications have begun to catch on and that familiarity does seem to have benefited the E/CTRM in the cloud market as well, as customers are now much more familiar with the benefits than they were 5 years ago. It is important to note that it’s not just the smaller commodity traders that see the potential benefits of a cloud-based solution either. Recent ComTech research suggested that, in general, all buyers of E/CTRM software are increasingly open to considering alternatives to the traditional “on premises” implementation model. While a small, but committed, minority continue to resist anything but the traditional on-premises implementation approach, the overwhelming majority of respondents will consider cloud deployment for a variety of vertical application areas in and around commodity trading.

1. TAKING THE NEXT STEP IN
CTRM CLOUD SOLUTIONS
WHITE PAPER

2. © Commodity Technology Advisory LLC, 2014
Introduction
IN THE LAST DECADE, A QUIET REVOLUTION HAS OC-CURRED
WITHIN THE E/CTRM (ENERGY/COMMODITY
TRADING AND RISK MANAGEMENT) SOFTWARE CATE-GORY
AS VENDORS AND USERS HAVE INCREASINGLY
ADOPTED THE CLOUD-COMPUTING MODEL. THIS MOVE
HAS BEEN DRIVEN BY DEMAND LARGELY FOR MORE
AFFORDABLE E/CTRM SOFTWARE AS REFLECTED BY
A LOWER TOTAL COST OF OWNERSHIP. INCREASING
REGULATORY AND SHAREHOLDER SCRUTINY HAS
MEANT THAT EVEN SMALLER COMMODITY TRADERS
NEED TO ABANDON SPREADSHEETS AND SIMILAR
UNSTRUCTURED AND DIFFICULT TO AUDIT TOOLS IN
FAVOR OF MORE ROBUST SOLUTIONS. HOWEVER, EVEN
THE SMALLEST ‘OF COMMODITY TRADING COMPANIES
HAS PRETTY BROAD AND COMPLEX REQUIREMENTS
MEANING THAT THEY ACTUALLY STILL REQUIRE
A FULLY-FLEDGED APPLICATION TO MEET THEIR
NEEDS, BUT ONE THAT FITS WITHIN A BUDGET
THAT REFLECTS THE SIZE OF THEIR BUSINESS.

3. © Commodity Technology Advisory LLC, 2014
Taking the Next Step in CTRM Cloud Solutions A ComTech Advisory Whitepaper
E/CTRM IN THE CLOUD
It is important to note that it’s not just the small-er
commodity traders that see the potential ben-efits
of a cloud-based solution either. Recent
ComTech research1 suggested that, in general,
all buyers of E/CTRM software are increasingly
open to considering alternatives to the tradition-al
“on premises” implementation model. While a
small, but committed, minority continue to resist
anything but the traditional on-premises imple-mentation
approach, the overwhelming majority
of respondents will consider cloud deployment
for a variety of vertical application areas in and
around commodity trading.
However, the same research suggested
that only 16% of those who responded to the sur-vey
already used a cloud-based E/CTRM solu-tion.
It also showed that just around half would
seriously consider E/CTRM in the cloud as a
procurement option though the final decision
was often still more likely to lean toward a tra-ditional
installation. Beyond a general softening
of overall objections, the sluggish global econo-my
has been driving increased interest in cloud-based
E/CTRM, as the potential for substantial
cost savings for the acquisition and implementa-tion
of cloud solutions (versus that for traditional
software) is attractive.
General perceptions regarding software
delivery in the cloud have improved over the last
few years. A majority of the survey respondents
held favorable or improved views of the model; almost certainly in
part due to increasing exposure to cloud-based products gener-ally
in both the consumer and commercial markets (including on-line
exchange trading, on-line banking, CRM solutions and even
iTunes). However, the most pressing issues associated with cloud
delivery remains potential security issues, concerns about loss of
control over their data, and perceptions of difficulty in integrating
with cloud based or web delivered software applications.
In reality, the security issues related to E/CTRM deploy-ment
in the cloud may be somewhat overwrought. With the advent
of on-line exchange trading and trade reporting, most companies
today already have significant volumes of trade data “floating
around in the cloud”, and with the new regulatory reporting re-quirements,
that volume of trade data sitting outside of a trading
company’s firewall will only increase. There will be a continuing
acclamation to, and acceptance of, cloud-based applications/data
storage as web-based trading and reporting becomes even more
common. That being said, data security should always be a critical
concern to users of E/CTRM systems, regardless of whether that
data is in the cloud, in an in-house server room or sitting in a box
on a trader’s desk.
The attraction of cloud-based E/CTRM software is not
limited to ease of deployment. The ongoing cost benefits are also
quite attractive as it potentially significantly reduces the need for
expensive implementations, upgrades and maintenance activities
as well. Web-based means users have instant access to the full
range of functionality from your Web browser. There are no long,
costly installations or expensive servers and databases to buy and
support. E/CTRM in the cloud has potentially positive implications
for speed of implementation, cost of ownership, operational flexibil-
In recent years, consumer and business cloud-based applications have begun to catch on and that familiarity does
seem to have benefited the E/CTRM in the cloud market as well, as customers are now much more familiar with the
benefits than they were 5 years ago.
1 | CTRM in the Cloud, Commodity Technology Research Report, January 2014 (Sponsored by Aspect Enterprise, Brady PLC and Generation 10)

4. © Commodity Technology Advisory LLC, 2014
Taking the Next Step in CTRM Cloud Solutions A ComTech Advisory Whitepaper
DELIVERING THE BENEFITS
In order for E/CTRM software to cater for a broad
enough set of users to be commercially viable, it has
to also be extremely configurable. Unfortunately, this
configurability often translates into complexity that
increases implementation times and the difficulty in
supporting the application; in turn, driving up costs
and increasing the operational risks associated with
customized software. Simply supplying E/CTRM in
the cloud doesn’t necessarily help reduce this com-plexity
either and the market is well equipped with
stories of implementation over runs and even failures
for both on-premises and cloud based solutions.
Addressing the risk of such occurrences, As-pect’s
AESthetics technology, which has now been
running for several years, involves a series of initia-tives
designed to reduce this complexity, expediting
As one of the earliest in the cloud vendors, Aspect has gained a level of expertise and insight into cloud deploy-ment
and into accruing the promised business benefits beyond that of most E/CTRM vendors. The company has
recently launched a program called AESthetics, designed to remove the complexity from E/CTRM implementation
and customization around cloud-based applications. In addressing this need, AESthetics hits at one of the biggest
difficulties with E/CTRM software; one that has historically been a dilemma for creators and users of the software
category alike.
implementations and support. One of these initiatives is to decompose
existing business applications into more discrete and granular compo-nents,
which along with best practice business process maps created
by the company, can be used to help companies assemble the com-ponents
into any workflow to meet their users’ business requirements.
Aspect Enterprise Solutions has also developed and uses a series of
Work Benches to represent common activities among commodity trad-ing
companies, including for example, Reference Data Management,
Contract Management, Credit Management, Transaction Capture, Deal
Confirmation, Risk Management, Physical Delivery, Settlements and
Accounting. The company builds and releases such Workbenches with
each new release.
The idea is that by configuring the component applications,
common business activities and best practice business processes and
workflows, users can create and access an application that is truly per-sonalized
to their business and create an experience that Aspect terms
ity, trading safety, and efficiencies. Rapid deploy-ment
is provided out of the box, with customized
configurations depending on the complexity of
the requirements.
Buyers however, must be careful and
check the label. Taking a client/server E/CTRM
application, hosting it somewhere and then
screen scraping it with Citrix is not SaaS nor
hosted in the cloud. Such a mode of deployment
may not bring the envisaged cost and business
benefit as it may not offer the vendor the ability
to reduce costs associated with implementation
and support. To really provide those benefits, the E/CTRM needs
to be written specifically for such a delivery mechanism; the right
architecture and technologies are key.
One vendor who, perhaps more than any other, has innovat-ed
E/CTRM in the cloud is Aspect Enterprise Solutions. The com-pany
started offering its ETRM solutions in the cloud 14-years ago
and has continued to do so ever since in the broader CTRM arena
for metals and agricultural commodities. The company has enjoyed
considerable success with this model and counts some 500 com-panies
as clients for its web-based E/CTRM and data management
tools.

5. © Commodity Technology Advisory LLC, 2014
Taking the Next Step in CTRM Cloud Solutions A ComTech Advisory Whitepaper
A BROADER PARTNERING
APPROACH
Not only does the AESthetics approach work at
progressively making the software easier to adopt
but, as importantly, it makes the software easier
for third-parties to work with as well, ensuring that
there is a depth to choice of third-party consulting
resources to assist users during implementation
and for long-term support. While Aspect realizes the
benefit of an increased sales channel via these 3rd
party resources, the value to customers comes for
the breadth of companies that assist in the support-ing
Aspect’s solution. To this end, the company has
also designed and launched an innovative partner
program recently called APP, which by partnering with many of the top
services and technology companies across commodities, and regions
globally, Aspect is able to extend best practices, innovative tools and
optimum cost efficiencies to customers.
The APP is designed to drive improvement and increase their
client’s return on investment throughout the software’s lifecycle, from
initial acquisition through implementation, support and maintenance.
By pooling strengths in core competencies, best business practices
and tools, and supported by localized services companies, clients can
realize greater success via this partnering program.
Traditional Install AspectCTRM
3 year license/12 users $400k $540k
Implementation $600k $50k
Enhancements/Reports $160k $0
3-year S&M $160k Included
3-year DR $200k Included
3-year IT Support $300k Included
“MyAspect”. Utilizing AESthetics, users can config-ure
the Aspect solution as opposed to needing cus-tomization
through code development.
Ultimately, AESthetics essentially helps to reduce
complexity while increasing usability and makes this
repeatable across many users of the solution. It cre-ates
system stability and flexibility helping Aspect
to meet its promise of an “exact fit in record time”.
Furthermore, the approach also allows the company
to build indirect sales channels using system inte-grators
and regional consulting firms, while provid-ing
the user with a degree of self-sufficiency as it
is possible to outsource the client configuration to
third parties and IT teams within user organizations
potentially saving time and tens of thousands of dol-lars
in professional service fees.
Aspect AESthetics is about solving the
configurability/complexity problem in the context
of cloud-delivered E/CTRM software. As previously
stated, configurability and complexity are often two
sides of the same coin, increasing costs and timescales for implementa-tion
and increasing the risk of project failure. In order to fully realize the
value of cloud delivered E/CTRM, users must still be able to configure
their solution to meet their business requirements, without hindering
the ability to quickly implement, and bring into full production, the new-ly
acquired solution. Not achieving these goals would ultimately defeat
the purpose of the cloud model and the potential business benefit of a
lower TCO.
Table 1 | Comparison of AspectCTRM Deployment versus
Traditional On- Premises deployment
(Simplified from Aspect website content)

6. © Commodity Technology Advisory LLC, 2014
Taking the Next Step in CTRM Cloud Solutions A ComTech Advisory Whitepaper
SUMMARY
Cloud vs. on-premise deployment of E-CTRM solu-tions
is still debated by internal management and IT
teams, but adoption is well underway from all busi-ness
segments, large and small. This shift started
several years ago within this space. Aspect was one
of the first vendors to offer E/CTRM software in the
cloud over a decade ago, and it continues to be the
leading innovator in this increasingly accepted tech-nology
segment. Given the company’s long history
and componentized approach to technology devel-opment,
and backed by their innovative AESthetics
program, Aspect has learned how to optimize the
delivery of cloud-based E/CTRM for users, ensur-ing
that the perceived business benefits are fully
realized.

7. ABOUT
Commodity
Technology
Advisory
LLC
Commodity Technology Advisory is the leading analyst organization covering the ETRM and CTRM markets. We provide the invaluable insights into the issues and trends affecting the users and providers of the technologies that are crucial for
success in the constantly evolving global commodities markets.
Patrick Reames and Gary Vasey head our team, who’s combined 60-plus years in the energy and commodities markets, provides depth of understanding of the market and its issues that is unmatched and unrivaled by any analyst group.
For more information, please visit:
ComTech Advisory also hosts the CTRMCenter, your online portal with news and views about commodity markets and technology as well as a comprehensive online directory of software and services providers.
Please visit the CTRMCente at:
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+1 281 207 5412
Prague, Czech Republic
+420 775 718 112
ComTechAdvisory.com
Email: info@comtechadvisory.com
www.comtechadvisory.com
www.ctrmcenter.com