For more information about Luxoft, visit www.luxoft.com www.luxoft.com/financial-services/
case study 26.09.2012
Commodity Value Chain Service Solution Summary The system is used daily by traders in the global agribusiness company for commodity contracts trading and risk management.
uu Client: One of the largest global agribusiness and food company uu Business Area: Trading, Risk Management Front Office, Middle Office, Back Office uu Asset Classes: Commodities uu Technology Set: J2EE, IBM WebSphere, Oracle, TIBCO, Struts, Hibernate, AJAX, Web-FOCUS uu Integration: ERP system (SAP), Market data provider uu User Profile: Traders (400+ users) uu Geography: Worldwide uu Relationships Status: Ongoing, T&M uu Services Provided: Full cycle: business analysis, development, QA, maintenance with production support uu Team Size: 9 team members uu Duration: 3+ years
Business Challenge The world’s largest commodity trading company was beginning the development of a significant internal software solution that would provide for the management of commodity trading contracts throughout the life cycle of the contract. The client required support for trade execution, marking to market futures values, risk management, and reporting. Purchasing and Sales were separate departments in different locations. The system was to be customized for the unique needs of each department.
Luxoft Delivered Solution Luxoft successfully joined the international team to create the system, providing analysis, development, testing and maintenance services. The delivered solution covered multiple financial instruments including swaps and swaptions (Barrier, Asian, Digital, European Strip). Tight integration with existing systems (i.e., SAP, SunGard Trading) provided managing and monitoring functionality in the finance and goods flow. Continuous, up-to-date market data from the Chicago Board of Trade (CBOT) with feeds every 30 minutes via SunGard services along with a flexible architecture gave the middleand back-offices an unfailing source of critical data for the highest returns. The developed platform was divided into the following systems: 1. Trading Execution and Management System The application enables execution of the full life cycle of commodity contracts and supports the pricing for the contracts. The solution provides flat, provisional, premium and frame pricing for futures contracts. The pricing is based on the current quotes from Chicago Board of Trading and includes support for the multiple currencies. The execution of the contracts covers commodities delivery and payments processing. The following strategies for delivery are supported: inventory, delivery, string, circle and washout. The solution for the contract settlement supports various financial transactions such as settlement, equity liquidation and memo, as well as the generation of invoices. Final invoicing is completed in an external solution in the SAP application. Luxoft - Case Study
02
Document management within the supported areas of the business was also provided. 2. Market Data System The application tracks the market price of commodities and provides the workflows for contract pricing based on origin, commodity type, market, quality, and currency. It includes functionality for the management of estimated expenses based on commodity type, quality, party location, origin, and expense type.
3. Mark to Market System This data transformation system consolidates information from the Trading Execution and Management System and the Market Data System and prepares it for further processing in the Managed Reporting Environment. 4. Managed Reporting Environment The system compiles comprehensive contract execution reports for business users and senior executives. 5. Finance Risk Management The system maintains the registry of deals, tracks their financial risks, and produces statistical information reports.
Luxoft - Case Study
03
Benefits Luxoft has successfully delivered the systems on schedule and within the budget. The implemented solution fully meets the client’s business needs and objectives. The developed platform enables the client to effectively trade commodities covering all stages of the contract life cycle, as well as to manage the risks associated with them.
Customer Feedback Detailed feedback is available on request.
Luxoft - Case Study
04
About luxoft
Luxoft, a principal subsidiary of IBS Group, is a provider of advanced application and software engineering outsourcing services for global and regional enterprises. Luxoft builds partnerships with its clients, such as Boeing, IBM, Deutsche Bank, UBS, Harman, Avaya, Alstom, and Sabre, based on the culture of engineering excellence, innovation, and deep domain expertise. Luxoft offers international delivery capability through its network of state-of-the-art delivery centers in North America, Eastern Europe, and Asia. Luxoft`s customers benefit from the right mix of technology skills, industry knowledge, proprietary processes and methodologies, and a choice of engagement models. For more information about Luxoft, visit www.luxoft.com www.luxoft.com/financial-services/
Š 2012 Luxoft