Are ERP Systems Good for Commodity Trading?


What is ERP?

Before we decide whether ERP is suitable for commodity trading, let’s go over what ERP is. ERP stands for Enterprise Resource Planning. For example, think about if you were running a manufacturing business and the processes you might come across… You’ll likely have processes such as Supply Chain Management, Inventory Management, Order Management, and Customer Relationship Management among others. ERP essentially integrates all of these processes into a single system which can help you streamline the operation in your organization.

Why Not ERP?

Most of the large and mid-sized companies have begun to adopt ERP systems for the handling of their different processes, but when it comes to Commodity Trading and Management, is ERP good enough to handle it? Well, ERP vendors like SAP, Oracle, and others have developed some specialized functionality in their ERP systems to handle Commodity Management and Risk Management. However, if you ask whether those additional functionalities are good enough to manage commodity trading, the answer is mostly “no”. This is primarily because these systems lack trading and analytical aspects when compared to CTRM software. The basic architecture of ERP systems and their core designs are not able to provide the level of flexibility CTRM offers.

Below are some points which explain why ERP systems are not suitable for commodity trading:

  • Inability to accommodate variable pricing because ERP systems are designed in such a way as to only take a snapshot of resources available at the point of time.
  • ERP systems cannot provide the best in Reporting and Analytics for commodity trading when compared to CTRM.
  • ERP systems cannot provide complex contract management, daily position management, trading and trade hedging, and risk calculation.

So… What is CTRM?

The basic architecture for CTRM/ETRM is designed in such a way as to adopt the different variances present in the commodity market. It helps you manage different types of contracts, market to market, planning and scheduling of loads, as well as shipping and logistics. CTRM can be used for ANY type of commodity such as Agriculture (rice, wheat, sugar, soybean etc), Live Stock or Meat, Metals (Iron, copper, aluminium, gold etc), Energy and even Oil!

To learn more about how a commodity management software should work, checkout our link here:

Commodity CRM – A simplified Platform for Commodity Execution and Risk Management.

Commodity CRM is an application designed to accommodate different types of pricing and withstand the volatility expected in commodity markets. This application will help you in your commodity trading from the procurement of materials to shipping and logistics. Commodity CRM covers all the factors and components associated with commodity trading. It also provides multi-currency support, automatic weight conversion, and the defining of commodity attributes and its calculation amongst a myriad of other functions. Moreover, it is built on the state-of-the-art Salesforce platform, which offers the cutting-edge advantages provided by cloud computing such as on demand usage, and device-friendly seamless integration with any third-party application.

To learn more about our products, checkout our link:

Are ERP Systems Good for Commodity Trading?

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