In order to stay at the forefront of this new landscape, it is vital to know the difference between an upgrade and a digital transformation. The key to staying relevant is to have the right purpose behind your transformation.
A report from Refinitiv and the Boston Consulting Group asks: As commodities and energy become more transparent and automated, what are the implications of this new digital transformation?
1. The Digitalization of Commodities (a report authored by Refinitiv and the Boston Consulting Group) explores how companies can make the most of the opportunities this new digital transformation has presented as well as the consequences of this digital shift.
2. By using the latest digital tools and analytics platforms, companies can keep pace with the ever-changing commodities trading world.
While trading firms are aware of this rapid transformation, it’s shed light on a new challenge – how to remain competitive? Many are looking to understand where they should invest to achieve bottom-line results.
The route to success is not the same for everyone.
In the report The Digitization of Commodities, co-authored with the Boston Consulting Group, we seek to address these concerns. Outlining how this new era implicates traders and analysts, the ways in which they can harness the change, and the possibilities it has now presented.
Data and commodities trading
The unique combination of the democratization of information and the exponential growth of data has paved the way for a new level of transparency. The competitive advantage in commodity trading used to be awarded to those who had the most accurate information and the control of critical assets.
Naturally with the rise in technological solutions, more traders can make decisions faster and with more accuracy. However, this shift has created the need for additional considerations – the influence of artificial intelligence, blockchain, data management, and the increased demand for new skills. In order to truly harness this transformation and to predict commodities prices faster, firms will need a holistic approach.
Instead of continuing to invest in detached or siloed tools and processes, companies actually need to overhaul their operational models. To rethink their digitization strategies in order to respond to the market fast enough to remain competitive.
For some, this means completing the four stages of digitization identified by the Boston Consulting Group.
1. Invest in electronic platforms and straight-through processing to cut direct costs.
2. Use automation based on parametric algorithms to optimize processes and market entry.
3. Leverage data-driven assistance to support decision-making and execution.
4. Achieve full automation of the value chain.
Digital transformation, not a technological upgrade
In order to stay at the forefront of this new landscape, it is vital to know the difference between an upgrade and a transformation. The key to staying relevant is to have the right purpose behind your transformation.
The best technological solutions for companies are those that can scale fast, are cost-effective, and have moved from concept stage to reality. Trends, buzzwords, and options that seem too good to be true are an easy trap to fall into.
Most companies that enable a successful digital transformation have accepted and correctly identified the compromise between your specific business needs and the technology that aims to close the gap of those needs.
This process must be underpinned by two key inputs – intelligence and insight that companies can trust and rely on as well as the digital capabilities that can quickly digest and interpret information.
The collective solution
Commodity firms need not develop, build or create such applications in-house. By partnering with Refinitiv, those who require it, gain access to a plethora of curated data sources, insight, and information, all combined into a single holistic solution.
No two digital journeys are the same, and rightly so. In order to remain competitive in the changing commodity market, choosing the right approach for your company is essential. If you can achieve this, the opportunities and rewards for doing so are endless.
For a deeper dive into digitizing commodities, the trends we are now seeing, and the ways in which you can gain, maintain or retain the competitive edge, explore our report.
Originally published at Khaleej times