All you need to Know Energy Trading and Risk Management (ETRM) Software Solutions

All you need to Know Energy Trading and Risk Management (ETRM) Software Solutions

Business owners are often found asking questions regarding Energy Trading and Risk Management Software (ETRM). They want to inquire what is ETRM software, what its benefits are, and why they should consider implementing this software for the success of their businesses.

This guide provides answers to all the questions asked by business owners regarding ETRM software solutions. It provides a detailed outlook on what the ETRM software solution is and what are the benefits of using this software.

So, without any further delay, let’s get started in exploring all meaningful information you need to know about ETRM systems.

What is ETRM Software Solutions?

ETRM is an acronym for Energy Trading and Risk Management. It is a software application that oil traders, distributors, suppliers, and wholesalers use to automate business processes connected with the supply and trading of crude oil, alternative fuels, refined products, renewable products, and financial derivatives, the movement and delivery of these energy commodities and associated risk management activities.

Energy trading and risk management software allow organizations to rapidly evaluate market information and capture profitable opportunities.

Why Companies Need ETRM Software?

Most oil traders, suppliers, wholesalers, and distributors run their oil trading businesses through manual processes. They use Excel spreadsheets or other outdated legacy systems. It is the right time for them to shift to the Energy trading software system.

This software allows operators to automate the outdated processes, which helps the traders to save a lot more money and improve the efficiency of operations through streamlining trading, hedging, cash flow, credit and operations, and inventory.

Energy Trading and Risk Management software helps manage risk and operate complex integrated supply chains for crude products, including distillates, petrochemicals, and bunkers.

The software comfortably handles complex interfaces and manages all the upfront issues. Hence, it turns out to be a cost-effective solution, particularly for oil trading companies.

Cloud-Based ETRM Software

ETRM software can either be supplied on-premise or in the cloud. Usually, cloud-based ETRM software systems are preferred because they are the most cost-effective. These types of solutions are offered through a subscription-based model. Such cloud purchases skip the internal CAPEX negotiations and help save time in getting a project approved or securing funding.

Furthermore, cloud-based ETRM software is easily scalable and can be accessed from anywhere, provided there is a device available with a strong internet connection.

Benefits of Implementing ETRM Software.

The following are some of the less-known benefits of implementing ETRM software.

  • It helps in managing the market, counterparty and deal with operational risks more efficiently.
  • The software makes it easy to control operational complexity and directly impacts profitability.
  • ETRM software allows access to a consolidated view of business and simplifies decision making
  • It improves profitability through trade economics, precise pricing formulas, and MTM.
  • The software allows you to save time so you can focus on the growth and establishment of your business by streamlining operations and driving greater efficiencies throughout your work business flow.
  • It allows you to reconcile traders in real-time.
  • The software provides a solution that works across everything, starting from trading to invoicing.
  • Implementing ETRM software is a great way to reduce errors from manual or double entry through automation.

What to Consider While Choosing ETRM Software?

While choosing the ETRM software, make sure you choose the one that works best for your business and helps in meeting the objectives set by you.

  • Consider going for an “end-to-end” and make sure you chose a solution that includes functionality to cover all the major aspects of your energy, trading, and risk management activities which include:
  • Hedging and risk management (you should be able to hedge, monitor, forecast, and report)
  • Trade and operations (make sure it cover everything from trading, managing contracts, and operations to credit control and delivery)
  • Inventory management and reconciliation including an entire view of the right inventory across the supply chain
  • Financial accounting including planning, control, compliance, and auditing
  • Reporting so that you get a complete view of your business performance
  • Integration (make sure that you integrate with third-party applications)
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