Spreadsheets in Commodity Trading

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Alarming New Commodity Technology Advisory LLC Report Released

A new study from Commodity Technology Advisory LLC (ComTech) finds that spreadsheets continue to be a pervasive tool used in commodity trading firms, despite their well-known shortcomings and high risk profile. This new research report sought to quantify the use and risk of spreadsheets in commodity trading, and the results indicate that more than 90% of the respondents to the research survey indicated they continue to utilize spreadsheets for some portion of their trading activities.

“Despite the growing maturity of commercially available Commodity Trading and Risk Management software (CTRM) solutions, an increasingly active regulatory business environment and, the alarming number of horror stories involving spreadsheets in historical losses, mistakes and fraud, spreadsheets seem difficult to eliminate,” said Dr. Gary M. Vasey, Managing Partner, ComTech. “This research, prompted by the current round of regulation and controls, looks at the use of spreadsheets in commodity trading to discover how widespread and pervasive they are and why.”

The report, which is available for free download at both the Commodity Technology Advisory website (http://www.comtechadvisory.com) and also leading portal for commodity trading technology – the CTRMCenter (http://www.ctrmcenter.com) – finds that spreadsheets are simply too convenient and easy to use. Most of the respondents were well aware of the shortcomings and the risks involved in their use and yet seemed unable to eliminate them.

“Spreadsheets are low-cost, convenient tools that do have a role in most businesses,” concludes Patrick Reames, Managing Partner, ComTech. “The issue for commodity traders is to ensure that if spreadsheets do continue to be used, that use must be governed and controlled via well-reasoned IT risk management policies, and their use limited to non-mission critical areas of the business whenever possible.”

This research effort was supported by study sponsor Generation 10 Ltd., a Liverpool, UK-based company that provides data management services and solutions throughout the commodity supply chain with specialist domain expertise in softs/agricultural commodities.

About Commodity Technology Advisory
Commodity Technology Advisory (ComTech Advisory) is the leading analyst organization covering the Energy and Commodity Trading and Risk Management (E/CTRM) technology markets. Led by Patrick Reames and Dr. Gary M. Vasey, ComTech Advisory provides invaluable insights, backed by primary research and decades of experience, into the issues and trends affecting both the users and providers of the applications and services that are crucial for success in markets constantly roiled by globalization, regulation and innovation. For more information, visit http://www.comtechadvisory.com

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