Thank You!

Hi

Apologies for not blogging for around two weeks. Things have been pretty busy with work and personal life.

I recently attended a Thanksgiving dinner at a friends place. My friend said a prayer to thank for the things he had. It reminded me that I had many things to be thankful for this year. One of things I am thankful for is this blog and it's many readers. I started this blog as a fun project to express my ideas on Trade Compliance and Trade Compliance IT. I never imagined that approximately 2 months after starting this blog I would have approx 400 visits and around 150+ unique visitors. Some of you have contacted me expressing words of encouragements. Some of you have contacted me asking for advise. I am glad you contacted me. I am sure we will be richer by our associations. I want to thank you all who are reading from all over the world for the time you spend reading my blog and sending comments.

Please continue to send your comments (the pencil icon under each post) as this is what is keeping me going.

If you want to read new posts on my blog you can easily do so by creating a gmail account and subscribing to my blog. You can subscribe to my blog by using the subscribe to option on the right hand side margin. You should choose Google in the drop down. Once you go into Google reader you will see the posts on my blog.

Thank You again to you all for reading!

Trade Compliance IT Strategy

Hi
I have spent many years working in Strategic, Tactical and Operational roles in Trade Compliance IT. The interesting part is my previous jobs have need me to play all three roles. I attribute this to the low number of people with TC IT skills. Of late I have started becoming pretty tired of the operational (including production support) and the lower level tactical tasks. I strongly believe it's time for me to focus on a Strategic role. While I haven't found my dream job :0) I do want to put out my thoughts on TC IT strategy and prepare for it.

My approach to TC IT strategy is very simple.

Step 1: Start grouping your needs into buckets. Each bucket must be an aggregation of similar needs. For example, HS and ECCN classification would be in the same bucket.

Step 2: Break out your needs into short term, medium term and long term needs.

Step 3: Determine what functionality will help you meet your needs. Some areas to keep in mind are security, auditability and ease of use. There are many more.

Step 4: Determine ballpark transaction volumes for your needs. For example, you want to do ECCN classification. Then you may want to estimate how many sku's/products will need to be classified/reclassified in the next 1,5 and 10 years.

Step 4: Determine the solution that fits the needs in steps 3 and 4 in the short and medium run and can scale to the long term needs. Once you think of the solution this way you will not lose sight of scalability needs/requirements.

While looking at a solution there are some other factors that you need to keep in the back of your mind like Total Cost of Ownership, vendor stability/longevity, vendor partnership, software and master data quality.

Let me know your thoughts on other areas that I need to consider to come up with a good TC IT strategy. Let me also know if you have a TC IT strategist in your organization who works on long term solutions.

Cheers

Where is Oracle's GTM product?

Hi
Apologies for not blogging for two weeks. I have recently been moved from one company to another. Coupled with that, I have been asked to take care of a project in addition to my day job. This has forced me to put in long hours at work. As a result I haven't had any time to blog :(.

I received a comment from a Product Strategy Manager at Oracle saying that more information on Oracle GTM is publicly available from Oracle OpenWorld 2008. I must admit that I haven't had a chance to ever attend OpenWorld. I googled for presentations from OpenWorld and couldn't find anything useful. If you find some useful information on the web let me know and I will share.

Cheers

What functionality should we be looking for in Trade Compliance software?

Hi

One of the comments I received was around what functionality should be looked for in trade compliance software. I consider this a pretty wide/big topic which would fill several pages. Here are two of my publications from the last 3-5 years that touch on this area.

The first publication is on functionality for restricted party screening and can be found at:
http://www.supplychainbrain.com/archives/03.05.opinion.htm?adcode=30

The second publication is a recent one on surprises that may be encountered with Trade Compliance software and can be found at:

http://www.scdigest.com/assets/On_Target/08-04-21-1.php?cid=1625&ctype=content

Let me know your thoughts and questions.

Happy Reading :)

Who has the best TC software out there?

Hi
I am sure there are thousands of business users asking this question. I got a comment asking me which TC software has depth and real direction for a bunch of functionality.

I must admit I have sat on a few vendor selection committees for export compliance software and worked on RFP's and RFI's with some vendors. The Trade Compliance applications space has many players with different strengths and weaknesses. The applications also apply to many industries some of which have some very specialized needs. For example the software industry has needs for encryption export licensing while the high performance computing industry has computing power calculation needs (millions of theoretical operations per second) for exports. I will abstain from saying vendor x is good in this area and vendor y is good in another. Instead I will make some general comments.

I have found that Trade Compliance software aren't always good at both technology and functionality. Functionality depends on master data and code/programs. When I say technology I mean the basic building blocks that make the software work like architecture, tools etc.. While looking for vendors good ground work needs to be done on what the expectations are in terms of technology and functionality. Here are a few examples:

Technology: What's the expectation on application uptime and scalability?
Must the application be able to do screening of millions of customers against an addition to the restricted parties list? How quickly must the process complete? Must the application be able to do other screening at the same time? How quickly must it respond?

Functionality: Must license exceptions be automatically assigned? Must licenses received from the governments and created in the app be automatically incremented and decremented? What should be the false positive rate for Restricted Party Screening results?

If you plan to use a Service Oriented Architecture/Software as a Service/Application Service Provider vendor add on requirements on data security, service level, data queueing, response time etc...

In summary, go through vendor selection. Go in prepared with your requirements and scoring criteria. Make sure you cover both the technology and functionality aspects. If you are looking for a list of vendors let me know and I will send you links of publications by research houses of some of the major vendors in the fray. Choose carefully?

Please note, I do not have interest in the stock of any of the vendors, nor do I have any vested interest in any of them.

Cheers

Where is Oracle's GTM solution?

Hi

I got a comment asking where Oracle was with it's GTM solution. The last I heard they would be releasing it sometime next year. Maybe mid next year. As far as what they will deliver I think one of the Aberdeen reports describes their roadmap. Let me know if you don't find it. As far as integrating the GTM solution with the e-business suite, I surely would hope and expect them to integrate it. I am sure this would attract a lot of customers and revenue :).

Have any of you heard or read more about the Oracle GTM solution. I for one am excited as it expands my career prospects :).

Cheers

Opportunities in Trade Compliance IT

Hi

A student at a Masters program in IT contacted me about job opportunities in TC IT. Here's my advise to those who plan to find a job in Trade Compliance IT. TC IT jobs aren't easy to find. With a vast majority of trade compliance work being done manually opportunities for IT specialists opportunities are few as compared to business/operations job. The exception is positions for SAP GTS. A majority of SAP GTS positions I have encountered are consulting positions. When Oracle comes out with it's GTM product next year the opportunities should double :).

Most of the 'best of breed' vendors and ERP companies have product manager, developers, architect and implementation specialist positions . If you are lucky you may find a position with them. I have seen employees move from one vendor to another so you may decent prospects once you get into one. I think there are more best of breed vendors on the east coast as compared to the west coast. Barring consultant positions, the other positions are generally local.

If you want to work for a big company's in house TC IT you will need to specialize in the software they use. Generally growth opportunities are limited. The highest you can aspire to get to is lead or manager. You will have to cover more bases (e.g. logistics, order management etc..) to climb up the ladder to get to a Director level position. Generally, there aren't architect level positions for TC IT with large companies.

I hope this gives you all and general sense of the opportunities. Have you had a different experience? Let me know your thoughts.

Cheers

Responses to the 2nd comment I received on my blog

Hi

Apologies for not blogging for a week. I am a member of Linkedin and decided to spread the word on my blog a few days ago. As a result I received some new readers and one interesting comment. I have copied and pasted below as the comments are hidden under each post.

Here's the comment:

"you should educate yourself on the difference between ERP companies and Best of Breed 3rd party companies... ERP companies get the most attention as they have the most money and the larger number of customers, but often their solutions lack depth and real direction as they tend to focus on broad strokes versus focused speciality. In the world of global trade software, speciality and realtime knowledge of what is going on in the marketplace is as yet not the domain of ERP providers, although their marketing people will say otherwise.

GTM and TMS applications are merging for sure, but what impact do you think the current credit crunch will have on Global Trade and outsourcing?"

First of all I would like to thank the reader for the comment.

Here is my response: When you refer to Best of Breed 3rd party companies I think you are referring to the first movers in the Trade Compliance applications space who have built a good amount of expertise in the space. While ERP companies, i.e. the big vendors, may be relative newcomers to the space, as you rightly pointed out, they do have more money. In addition to the money they have more experience building scalable software for large enterprises (read fortune 500). I do believe the ERP companies have a slight edge on the architecture side. I can't comment on functionality as I have worked mostly with a Best of Breed provider of Trade Compliance software. If the ERP companies are really behind in terms of functionality/data content I do think the business users will force them to quickly come up to speed. If they don't they will switch to Best of Breed companies. As we all know Trade Compliance users are a demanding lot :). It will be an interesting race to watch.

What will be the impact of credit crunch on Global Trade and outsourcing? Well I want to throw out a disclaimer before I put out my thoughts. I am not an economist or banker so take my prediction with a grain of salt as they may not turn out be true. I think the credit crunch will make credit more expensive and more difficult to find. So long as there are customers who are willing to absorb the higher costs or the seller finds smarter ways to keep the sales price down I don't think global trade will be impacted. If customers are too scared/worried to buy perhaps global trade will be impacted in the short term.

Cheers

Global Trade Compliance - An IT Analysis - Part 3

Page 13 - 'GTC lags behind other GTM functions in the use of information technology: 64% of all companies in this study report having mostly manual trade compliance practices with disparate automation efforts for certain processes reported by many respondents'
No wonder TC business jobs outnumber TC IT jobs a hundred to 1 :).

Page 14 - 'Companies with automated processes for restricted party screening are 30% more likely to report zero government fines for non-compliance'
Finally restricted party screening is in the limelight!

26% of exporters and 14% of importers have automation in License Determination and Management. Does this mean that they have automated assignment of license exceptions and special licenses obtained from export regulatory authorities? There isn't info on the probability of reducing government fines from such automation.

'Due to the early stage adoption of GTC technology solutions compared to other supply chain applications, there is almost no definite lead in performance among companies using different solution types'
I think the author should have clarified in her opening statement that her analysis was specific to import compliance. On demand software for third party GTM solution providers may be as popular as ERP modules with best in class companies. It doesn't follow that they are equally scalable and provide as much data security. Consider this:
1) An ERP solution resides within a company's firewall where there is full security for a company's pricing and customer/supplier data
2) An ERP solution is specific to a company. So long as the foundation was laid well it can be scaled to the company's needs. On the other hand an on demand software provides services to many companies. It remains to be seen how it will scale to the growth needs of all companies.

I don't see a similar analysis by the author for export compliance.

This concludes my IT Analysis of the Aberdeen Report: Global Trade Compliance Priorities in 2008. It is available at:
http://www.aberdeen.com/summary/report/benchmark/4636-RA-global-trade-compliance.asp

Please note: Aberdeen did not provide me with a free copy of the report and I am not promoting it :).

Cheers

Global Trade Compliance Priorities - An IT Analysis - Part 2

Continuing my analysis of the Aberdeen report:
Page 8 - 'Trade Compliance departments are beginning to behave more strategically, their increased responsibility driven by growing company operations and lack of understanding from other departments'
I hope Trade Compliance departments start including IT counterparts early on in strategy planning and implementation sessions. IT team members can help define strategy that reduces the total cost of ownership of applications and also spread the word around within IT and business groups so that Trade Compliance needs aren't ignored. I really do think Trade Compliance IT needs a spot at the strategy tables, otherwise companies will end up with a hodge podge of disparate systems that increase the total cost of ownership.

Page 11 -
46% of best in class companies have automated doc exchange with forwarders/3 PL's for export and/or import
58% of best in class perform automated restricted party screening for exports and 32% for imports
37% of best in class perform automated export license determination and management
58% of best in class have automated access to trade related content
26% of best in class have access to analytics tools for export/import transactions - reports, statistics, scenario analysis etc..

Best in class companies are the the top 20% of the companies. If they themselves have a limited level of automation then there seems to be a lot of potential for automation in the future. I hope this means a lot of opportunity for fellow Trade Compliance IT professionals.

(to be continued)

Global Trade Compliance Priorities - An IT analysis - Part 1

Hi

I recently read Aberdeen's research titled Global Trade Compliance Priorities in 2008. I found the research interesting and it left me with questions in some areas.

Here's my analysis:

Page 7 - Best in class companies have 4.6% of international orders executed with Trade Compliance errors. Whoa! What errors? Since when did Trade Compliance departments admit errors publicly :). 4.6% seems way too high. I would like to know if the errors were caused due to human oversight or application/system malfunction.

Page 8 - Best in Class PACE (Pressures, Actions, Capabilities and use of technology) framework
The framework mentions that 26% of best in class companies have in house developed software for imports and 31% for exports. I'm wondering who provides the master data for these software. Is it an external vendor. What is the size of the IT team that maintains the software. I would be glad to sign up if they have a spot :0) as it sounds like a position with a lot of job security :0).
The best in class companies leverage trade compliance software from an ERP company or third party GTM solution provider. I don't quiet understand the difference between an ERP company and a thirs party GTM solution provider. I wondering if only the big guys such as Oracle and SAP are considered ERP companies? To me anyone who provides ERP software that can be implemented in house is an ERP company.

The advantages of a best in class company are quantified as:
a) annual trade compliance costs (include software, labor, fines etc..) is 0.5% less than the industry average
b) government fines are 1.8% less than industry average
Finally, we have some numbers to prove that trade compliance isn't a necessary evil and when a good trade compliance program is implemented with proper backing form IT it does lead to costs savings and lower fines. I would think the lower the fines the less likely the loss of export privileges etc..

(more to follow in my next post :))

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Thanks for reading my blog! Thanks to Google Analytics, I can see you are spread around the world. I see representation from North and South America, Europe and Asia. It reinforces the idea that Trade Compliance is truly global. I am looking forward to readers from Africa and Australia soon. Did I miss out out on any other continents?

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I have many ideas in my head which you may not want to read about. Your comments are important to me.

Thanks

Global Trade IT Strategy anyone?

Hi

The article in supply chain digest titled "Global Logistics News: Technology Enablement in Global Logistics and Trade Management Remains Well Behind Growth in Global Sourcing" touched a raw nerve:

http://www.scdigest.com/assets/On_Target/08-08-20-1.php?cid=1865

The article talks about how IT initiative in Global Trade are reactionary. I entirely agree. I would be surprised if the approach changes. Why? Here are some reasons:

a) IT is considered as a cost center and isn't considered a strategic partner. Trade Compliance/Global Trade IT gets lumped into the same bucket. Often operations/business folks want to control IT strategy. I think it needs to be a partnership.

b) There aren't enough Global Trade/Trade Compliance IT professionals around to provide the right kind of vision and direction. Global Trade IT is a relatively new area. The number of professionals with the right knowledge and skills to work on a roadmap is limited. Even if they have the vision they may be constrained by my comment in a).

Let's hope company's start taking Global Trade IT initiatives more seriously and start getting the right IT people together to work on roadmaps.

Cheers

Oracle Global Trade Management Product -3

Hi

A few years ago I worked with a guy who was very smart and had worked a lot with SAP's Foreign Trade module. He mentioned he had been offered a position on SAP's Global Trade Solution team in the Bay Area, California and had declined it. He mentioned that the team was 50-10o people with experience in Trade Compliance business and IT. I hear Oracle is using a team acquired from G-Log. Will they be able to give SAP and other big players such as Vastera, Management Dynamics etc.. a run for their money? I will be watching. Will you?

Cheers

Oracle's Global Trade Management Product - 2

Hi

According to an article on logistismgmt.com GTM software will grow pretty fast and Oracle comnig out with it's new product will contribute to this growth.

"Some of that growth will be driven by Oracle’s move into the space, says Ian Hobkirk, former senior analyst of supply chain execution at the Aberdeen Group. Already armed with a world-class TMS, the vendor is “really putting a lot of horsepower into building a GTM solution,” adds Hobkirk. “Shippers want to go to one source for their TMS and GTM, and right now there’s no one out there offering that in an effective manner.”

http://www.logisticsmgmt.com/article/CA6567772.html

I would like to see the product to believe it's capabilities :).

Oracle's Global Trade Management product

Hi

I am sure a lot of you know that Oracle is working on it's GTM product. Considering that Oracle and SAP are the two big ERP vendors, I think that Oracle is way behind in the GTM space as SAP came out with it's GTS product 4-6 years ago.

The last I read was an Aberdeen report that said Oracle was working on it's GTM product:

http://www.aberdeen.com/summary/report/market_alert/MA_OracleGT_BE_3883.asp

I can't find anymore information online.

Any idea when the first version will be out? Do you think they will be able to give SAP and other big vendors such as Vastera and Management Dynamics a run for their money. If yes, within how many years of launching? Let me know your thoughts :)

Added some of my favorite links

Hi

I wanted to add something to my blog which would tickle your brain. I have added some of my favorite sites for reading up on Trade Compliance. Which ones are yours?

Hello fellow Trade Compliance professionals!

Hello Friends

I am excited to start writing this blog. My goal is to share my thoughts and opinions on happenings in the Trade Compliance and Trade Compliance IT world. I am looking forward to your responses and exchange of ideas. I am confident that it will help all us of enrich ourselves.

Cheers