The environment of physical energy and non-energy commodity trading and marketing has grown increasingly complex, marked by globalization bringing about rapid changes in supply and demand patterns, increased regulatory scrutiny and evolving trading and reporting rules, volatility along the entirety of the physical supply chain, and increasing uncertainty as to future price movements. In order to react to these changes quickly and appropriately, participants in these markets must increasingly rely on a sophisticated infrastructure of software and technologies to ensure a complete view of their trading positions and external market conditions that can quickly and severely impact their values. The core component of these now requisite trading and marketing technologies are energy and commodity trading and risk management (CTRM) systems. As market complexity has increased and multi-commodity trading has become more common, CTRM solutions have had to become more sophisticated and provide a greater depth of capability in order to capture and value the unique characteristics of the multitude of physical commodities being transacted along the physical supply chain, from source to market. Given the capabilities of these CTRM systems, they do represent a significant investment for any trading or marketing organization, generally trailing only the large scale ERP solutions, like SAP, in terms of costs to purchase and implement. Allegro Development, one of the world’s largest CTRM solutions providers, engaged Commodity Technology Advisory to conduct a survey of a number of their clients to determine their views as to the value of their investment and the operational and financial impacts of deploying Allegro’s CTRM solution. This report summarizes the results of that survey and discusses the key considerations for any company seeking to develop their own assessment of the value of their CTRM technology investment via a Return on Investment (ROI) calculation.

1. In Cooperation with
Allegro Development
Commodity Technology Advisory LLC
19901 Southwest Freeway, Suite 140
Sugar Land, TX 77479
281-207-5412
www.comtechadvisory.com
CTRM Value Survey and Analysis
November, 2013

2. CTRM Value Survey and Analysis
© 2013 Commodity Technology Advisory LLC 2
Report Background and Overview
The environment of physical energy and non-energy commodity trading and marketing has grown increasingly complex,
marked by globalization bringing about rapid changes in supply and demand patterns, increased regulatory scrutiny and
evolving trading and reporting rules, volatility along the entirety of the physical supply chain, and increasing uncertainty as
to future price movements. In order to react to these changes quickly and appropriately, participants in these markets must
increasingly rely on a sophisticated infrastructure of software and technologies to ensure a complete view of their trading
positions and external market conditions that can quickly and severely impact their values. The core component of these
now requisite trading and marketing technologies are energy and commodity trading and risk management (CTRM) systems.
As market complexity has increased and multi-commodity trading has become more common, CTRM solutions have had to
become more sophisticated and provide a greater depth of capability in order to capture and value the unique
characteristics of the multitude of physical commodities being transacted along the physical supply chain, from source to
market. Given the capabilities of these CTRM systems, they do represent a significant investment for any trading or
marketing organization, generally trailing only the large scale ERP solutions, like SAP, in terms of costs to purchase and
implement.
Allegro Development, one of the world’s largest CTRM solutions providers, engaged Commodity Technology Advisory to
conduct a survey of a number of their clients to determine their views as to the value of their investment and the operational
and financial impacts of deploying Allegro’s CTRM solution.
This report summarizes the results of that survey and discusses the key considerations for any company seeking to develop
their own assessment of the value of their CTRM technology investment via a Return on Investment (ROI) calculation.

3. CTRM Value Survey and Analysis
© 2013 Commodity Technology Advisory LLC 3
SUMMARY - PERCEIVED VALUE
The survey respondents provided a current estimate of the value received from their software
investment (ranked very positive thru very negative). Given the investment required to implement and
integrate an enterprise scale CTRM solution, it is expected that companies who have had the system in
production for a very short period of time will not have yet recouped that initial investment.
Only one of the respondents indicated they had calculated a Return on Investment (ROI) value relative
to their CTRM purchase and implementation.

4. CTRM Value Survey and Analysis
© 2013 Commodity Technology Advisory LLC 4
RESEARCH
DEMOGRAPHICS
Commodity Technology
Advisory interviewed
individuals at 20 Allegro
customers over a several
week period in the
second quarter of 2013.
The companies and
individuals participating
in this project were
initially contacted by
Allegro to seek their
participation.

5. CTRM Value Survey and Analysis
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IMPROVING ACCESS TO
INFORMATION
One of the primary goals
of all purchasers of a CTRM
system is to improve the
availability of information
to all users, particularly
those whose performance
will have the greatest
impact on the bottom line.

6. CTRM Value Survey and Analysis
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REDUCING COSTS AND INCREASING
EFFICIENCIES
Realizing positive value for a CTRM system is in large
part dependent upon improving operational
efficiencies while containing costs
ImprovingEfficiencies
ContainingCosts

7. CTRM Value Survey and Analysis
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RESPONDING TO CHANGES
IN BUSINESS AND MARKETS
CTRM systems should facilitate growth,
including growth of current business and
expansion into new markets and
commodities
IMPROVING CONTROLS WHILE MAINTAINING USER
SATISFACTION
Research has consistently shown most users will prefer spreadsheets
for managing their individual business responsibilities; reducing the
plethora of risk exposures associated with spreadsheets while
maintaining high user satisfaction is clearly a positive net benefit

8. CTRM Value Survey and Analysis
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RESPONDING TO CHANGES IN
BUSINESS AND MARKETS (CONT’D)
The scalability provided by structured CTRM
solutions, like Allegro, enables business to grow
their market reach and capabilities without
substantial incremental increases to their
technology spend.

9. CTRM Value Survey and Analysis
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Determining Return on Investment (ROI)
Determining the return on investment (ROI) for a CTRM software acquisition can be challenging as one of, if not the,
primary drivers of such a purchase is risk reduction - including price, credit, regulatory, operational and execution risks.
Deploying a modern CTRM solution, like that from Allegro, will when compared to a spreadsheet or manual process,
reduce the risk exposures in virtually all areas of your business while simultaneously improving information visibility and
enabling better and more profitable decision making. Precisely valuing an avoided event is not possible, but utilizing your
company’s past experiences can inform the value you may or may not place on reduced risks and can be an important
determinate in valuing your software investments.
Other benefits can be more readily measured and are based on your company’s past and current experience in utilizing
software to capture deals, manage positions and risks, account for your business, and analyze and report activities.
Whether your most recent experience prior to implementing a new CTRM solution was the use of spreadsheets, a custom
developed solution or another vendor product, many of the changes in terms of costs and benefits can be reasonably
measured and used to calculate an ROI for your latest software investment.
Return on Investment = (Benefits - Costs) / Costs

10. CTRM Value Survey and Analysis
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COSTS
Initial license fees or incremental ongoing service or
rental fees vs. the similar costs of replaced system
License fees for add-on modules or ancillary
software such as database solutions
Support & Maintenance costs – incremental vendor
S&M contract cost and internal staff vs. similar
costs of replaced system
Additional fees – escrow for source code etc., if
higher than replaced system
Estimated procurement costs (cost of personnel,
facilities and equipment involved in the
identification, testing, and contracting of the
software)
Implementation costs including both internal and
external costs related to human and technical
resources for data conversion, training, integration,
and testing
Costs associated with parallel testing/usage during
UAT.
Periodic upgrade project costs
Internal hardware costs including maintenance –
live, test and other environments
Operational issue costs as a result of software
deficiencies – if any
Work around costs (man hours, software, custom
development) – if any
Cost of on-going or periodic training
BENEFITS
Value of reduced headcount costs across business process or possibly switch from direct full-time
internal staff costs to variable, on-demand external headcount costs via use of third party
consultants
Reduced operational risked via saved penalties and fees as a result of reduced errors in areas such
as scheduling, Invoicing and payments
Reduced cost of credit and credit facilities due to better management of both cash and credit –
this is on both sides in offering and receiving optimal collateral to support actual trading needs
Reduced FX costs due to better management of FX and reduced need for FX conversion
Ability to optimize trading data costs – i.e. consolidate and reduce Bloomberg, Reuters, and other
data feed requirements?
Improved Market Risk Management – improved hedge performance, improved decision making,
etc., yielding improvements in P/L, MtM, and cash management and reduced exposure to
negative credit events such as margin calls.
Improved counterparty relationships as a result of more timely confirmation and settlement –
improved market reputation will reduce costs of finding and negotiating agreements with
counterparties
Reduced technical and business maintenance and workaround costs vs. replaced system
Improved identification of trading opportunities resulting in better results
Improved visibility into current performance reduces management and external (banks,
shareholders) anxiety which in turn has an impact on capital requirements and staffing.
Improved ability to forecast business performance potentially reducing capital requirements and
improving stock performance
Improved auditability and controls reduces chance of compliance issues and decreases costs of an
audit.
Improved tracking of payment terms and slow payments resulting in faster cash collection or
trading decisions – i.e. no trade, buy only etc.
Marginal ability to attract better quality staff
Benefits and Costs to be Considered When Calculating ROI

11. CTRM Value Survey and Analysis
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About Commodity Technology Advisory llc
Commodity Technology Advisory is the leading analyst organization covering the Energy and Commodity Trading and Risk
Management (E/CTRM) technology markets. We provide invaluable insights, backed by primary research and years 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. The company is led by Co-Managing
Directors Patrick Reames (USA) and Dr. Gary M. Vasey (Europe), who collectively have more than 60-years of experience in
the energy and commodities industry.
Commodity Technology Advisory
19901 Southwest Freeway, Suite 140
Sugar Land TX 77479
+1 281 207 5412 (USA)
+420 775 718 112 (Europe)
www.comtechadvisory.com

12. CTRM Value Survey and Analysis
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About Allegro Development
Allegro is a global leader in energy trading and risk management solutions for power and gas utilities, refiners, producers,
traders and commodity consumers. With more than 29 years of deep industry expertise, Allegro’s enterprise platform drives
profitability and efficiency across front, middle and back offices, while managing the complex supply chain associated with
physical commodities.
Allegro provides customers with agile solutions to manage risk across natural gas, power, coal, crude oil, petroleum
products, emissions and other commodity markets, allowing decision makers to hedge and execute with confidence.
Headquartered in Dallas, Texas, Allegro has offices in Calgary, Houston, London, Singapore, Sydney and Zurich, along with a
global network of partners.
www.allegrodev.com