Call an ETRM software vendor these days and they will tell you that despite the financial crisis, there are plenty of Requests for Proposals being issued at the moment. Further, they will tell you that the key driver behind these activity levels is risk management.
Risk Management was identified by the respondents to our Commodities study1 earlier this year as the primary critical business issue facing them as traders and executives a trading firms. In fact, it ranked an average score of 4.38 (on a scale of 1 to 5 where 5 was critical). Drilling down deeper into the responses to the study, the emphasis on risk management under current market conditions was even more emphasized by some of the other important business issues mentioned by the respondents which included:
- General Market Liquidity
- Understanding the Factors Behind Price Formation
- Rising Credit and Collateral Requirements
- Portfolio Management
- Reporting
- Credit Scoring
- Errors & Omissions
- Lack of Audit Trails
