Analytics-first commodity management is possible with a platform approach

Did you know that analysts spend up to 90% of their time just doing data aggregation and normalization of data? (Source) Yes, even analysts aren’t immune to manual work, although there are ways to circumvent it. When it comes to commodity management deriving critical insights and actionable information is necessary to succeed in these challenging and constantly evolving markets.

That said, without sophisticated analytics to convert that data to timely, relevant and actionable market and operational insights (i.e. early warnings of potential supply bottlenecks or inventory changes, timely identification of shifts in your intraday P&L, non-optimized physical assets and more), the flood of data arriving at your doorstep will overwhelm your resources.

What’s stopping commodity management companies from harnessing the power of analytics?

Challenges in data analytics in commodity management businesses:

Data silos

Like the adage in most corporate meetings, “There seems to be a disconnect” can happen in the data the company operates in too. There are heaps of data, pouring in from everywhere into the business. The issue is that they exist as data islands with no bridge to connect them. Manually aggregating data from spreadsheets is time-consuming and inefficient in the long run. Commodity management companies that rely on legacy systems and spreadsheets will find themselves in this situation with disconnected data.

Example: Broker reconciliation is an important process in commodities-intensive companies. In this process, the business needs to reconcile broker/clearer statements with transactions from trade management systems, and ensure all orders are received and invoices are processed correctly. Some of the largest enterprises out there too rely on manual reconciliation processes and require several people to spend multiple days integrating data from dozens of spreadsheets. The process is time consuming, error prone, and repetitive.

Data confusion

Commodity businesses might have a lot of data, but the question remains- is everyone in the business working on the same data? If there are different versions of data, there can be different versions of truth. It’s not hard to imagine why this would cause data confusion.

Example: According to a survey of over 100 medium to large manufacturers, 92% of companies use complex pricing structures and 100% of them manage pricing fully or partially in spreadsheets. Working with disparate spreadsheets can lead to inaccurate data, data duplication and old data usage.

Data delays

In this one case, slow and steady does not win the race. Real-time data provides minute-to-minute updates that can otherwise get missed. In commodity management businesses, real-time data is extremely valuable.

Example: The Russia-Ukraine conflict impacted the commodity business in a multitude of ways. If you are buying or selling commodities in Russia or Ukraine, this information will impact your business now. You cannot afford to wait days or weeks to analyze the impact of geopolitical instability, that is impacting commodity prices and accessibility in real-time.

Benefits of analytics-first platform approach to commodity management

  • Built on one source of data: The platform is built on one shared source of data — all the data your company needs to run its business. Every application has full access to all this data in real time, on demand, whenever you need it.
  • Reduced manual work and improved visibility: The power of one data source provides an accurate view of your business. Everyone uses the most recent data, so no analyses occur with outdated data. Everyone is analyzing the same data, so all departments are aligned. Days of effort are saved because the data is all integrated. That reconciliation process in the example above now takes just seconds, not days.
  • Reduced manual work and improved visibility: The power of one data source provides an accurate view of your business. Everyone uses the most recent data, so no analyses occur with outdated data. Everyone is analyzing the same data, so all departments are aligned. Days of effort are saved because the data is all integrated. That reconciliation process in the example above now takes just seconds, not days.

Looking for a platform-based solution that provides better analytics capabilities? With the Eka cloud platform, it’s possible to analyze operations and logistics, purchasing, potential trades and more in one go. Eliminate delays and manual processes and get the most value from your data today. Learn more about the powerful analytics in the Eka Cloud Platform for Commodity Management.

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Global leader in digital solutions for trading & risk, supply chain management and financial services driven by cloud, AI/ML and analytics.

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Eka Software Solutions

Eka Software Solutions

Global leader in digital solutions for trading & risk, supply chain management and financial services driven by cloud, AI/ML and analytics.

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