SAP CTRM the number 1 ERP in Commodity Trading.
Back in May 2014, ComTech had its first briefing with SAP about their efforts in Commodity Management. At that time, the SAP Commodity Management solution was licensed by 60 companies, with 10 actively using it. We noted that while the solution was strong for general commodity management, it was lacking some key features in areas like trading, risk management, and book structures. D
espite these gaps, we recognised SAP’s potential, especially given its strong ERP and supply chain capabilities in industries like oil and gas. From the beginning, integrating with SAP was often a key requirement for CTRM systems.
Fast forward to July 2019, and I had another briefing with SAP (they typically hold these about twice a year). Author spoke with Anja Strothkaemper, VP of SAP Agribusiness and Commodity Management Solutions, and Harald Schlueter, Senior Director. By this time, SAP had more than 200 licensed customers for their solution and was coming off a record first half of 2019. Author was curious about what was driving this level of success.
From our perspective, SAP’s success can be attributed to a combination of factors:
Significant Investment: SAP has committed considerable resources to developing their Commodity Management and Agricultural Contract Management solutions. This, along with co-innovation projects with key customers, has allowed SAP to enhance their offerings since 2014.
Broader Integration: SAP has improved the integration between Commodity Management and other SAP products, making it more commodity-focused and enabling it to deliver more comprehensive CTRM functionality.
As Anja explained, "The product is a lot richer and there is real value in CM integrated into ERP."
Migration to SAP S/4HANA: The shift to SAP’s S/4HANA software has also played a crucial role. As customers move to S/4HANA, many are discovering the added value of SAP's Commodity Management functionalities. Anja mentioned, “All SAP customers need to plan for 2025 when support for SAP ERP will officially end and they naturally look at what we have that is new – including SAP Commodity Management on SAP S/4HANA."
Innovative Solutions: SAP has also made significant strides in areas like blockchain, AI, ML, and advanced analytics, all of which can be leveraged by their customers to create and deploy customized solutions.
Strong Customer Base: SAP has some of the biggest names in the industry committed to using its Commodity Management and Agricultural Contract Management solutions. This helps strengthen SAP’s position as a leading contender in the market.
Additionally, we believe that SAP’s position is further bolstered by the acquisitive activities of ION. For those looking for an alternative to ION, especially if they're already SAP ERP users, SAP offers a natural solution, alongside many others in the market.
That said, SAP might not be the right fit for everyone. Its solutions can be pricey and might be too complex for smaller companies or those at the bottom of the mid-tier. However, the fact that SAP has grown from 60 to over 200 licensed customers in just five years—adding 20 new customers in the first half of 2019 alone, compared to 30 for the entire year of 2018—shows the momentum they have in this space. In fact, it could already be the #1 supplier of Commodity Management/CTRM solutions in terms of revenue.
In the coming weeks, I’ll be sharing more insights from SAP based on the latest briefing, including details on functional enhancements, strategies, and roadmaps. Stay tuned.
For SAP CTRM/ETRM implementation, support and rollouts you can contact us at ctrmpool@gmail.com.
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