Oracle's introduces Landed Cost Management Module

Hi
Oracle has come up with a module for Landed Cost Management. Landed Cost Management is one are of Global Trade that is considered on the cutting edge as it can help reduce costs and has a better value proposition to management than the standard pitch of risk minimization.

Here' the link I found online for the product's datasheet:
http://www.oracle.com/applications/scm/oracle-landed-cost-management-data-sheet.pdf

It remains to be seen how this product will integrate with Oracle GTM. I hope all Global Trade related modules are managed under the same umbrella to maximize synergies and to enable modules to work well together.

Let me know if you end up implementing this module about how well it is serving your needs.

Cheers

Oracle's Global Trade Management Product -5

Hi
Here's an update on Oracle's Global Trade Management product. The product will be released in the second half of the year. The date is still to be decided.

I will keep you posted if I hear more info on the date or the functionality that will be made available in this product.

Cheers

Export compliance business models and related it solutions

Hi
I'd like to discuss business models in Export Compliance.
I have come across three models.
Model 1: Physical exports: This model involves an order life cycle that is typically between 1 day to up to a few months. The shipment of product needs to be accompanied with documents such as the commercial invoice that need to have export licensing data on it. If the customers are repeat customers it would make sense to retain the latest restricted party list (RPL) screening results and also history. Since the order life cycle is a few days there is some breathing room for manual intervention to resolve RPL and export licensing issues.

Model 2: Online downloads: The second model is for products that don't need to be physically shipped. Example, online downloads. This model involves an order life cycle which ranges from a few seconds to a few minutes. Since the product doesn't need to be shipped there generally isn't a need for shipping documents. The customers aren't generally repeat customers and therefore their RPL results may not need to be reused and a history for the customer may not need to be retained. Since the order life cycle is a few minutes there is very little time for manual intervention to resolve RPL and export licensing issues. This model may have higher volumes that the first model.

Model 3: Site access: Export compliance screening may be required when customers, vendors and other persons access a company's facility. The life cycle of the transaction is a matter of seconds as the person is waiting to enter the building/facility. The person may not be a repeat visitor so the RPL screening results may not need to be retained. The history may also not need to be retained. Since the life cycle of the transaction is very short there may be little room for manual intervention to resolve issues. The volume of transactions in this model will vary based on the number of visitors.

Please add a comment if you are aware of another model.

Now moving to the applications that support these models. Let's say your company uses more than one model and your volumes/projected volumes are large.It makes absolutely good sense to have two applications/instances of an application support the two models. The only exception being the needs for model Model 2 and Model 3 may potentially be combined into one. I think having one application that satisfies the needs for Model 1 and Model 2 isn't the best course of action.

Let me know your thoughts/comments.
Cheers

Oracle's Global Trade Management Product -4

Hi
I am hearing the Oracle GTM product will be released in August 2009. I am still trying to get my hands on the presentation made in Open World 2008. I will keep you posted.

Cheers

Cool Tools 1 - Export Compliance Dashboard

Hi
I am starting a new category in my blog called cool tools. Whenever I find a tool or product that I find interesting and useful I will share.
I was on the export compliance training institute website and found the export compliance dashboard: http://learnexportcompliance.com/dashboard/index.php.
It's a cool tool you can download for free be providing some personal information.
The dashboard lets a trade compliance specialist look up EAR, ITAR, OFAC regulations, denied party lists etc.. from one single spot.
The tool can be periodically updated using the check for updates button on the dashboard. The result of this action tells you if you have the latest regs or you need to download a new version.

I thought this was a cool tool. Did you?

Cheers

SAAS/ASP vs In House implementation

Every company that wants to implement a Trade Compliance application is trying to decide if it wants to implement an standalone version behind it's own firewall or use a software as a service
vendor or Application Service Provider vendor to host a solution outside it's firewall. I am sure this is even more relevant today with companies trying to be as cost conscious as possible. There is potentially a trade off between cost and risk. Here are some major areas to consider while making this decision:

1) How large are your volumes? If you are a medium/large company that has many millions of transactions a year it may make sense to look more closely at the in house solution. This is
because your fixed costs of hardware, software and support personnel will diminish as volumes
increase. I believe the sliding scale pricing model that ASP/SAAS vendors provide can prove to be more expensive than an in house implementation.

2) How many applications does your company run in house? If your company runs many applications then the support personnel you hire can be leveraged for your in house TC application. They will have experience in the physical architecture that your company prefers and assuming your TC application has a similar architecture they will be able to easily support it and keep it up to corporate standards.

3) How specialized are your requirements? If your TC requirements are very specialized it is possible the vendor will need to write a lot of custom code to support it. In this case it may make sense to take a closer look at an in house implementation. This will enable better control of the code and may also help in easy modification of it as there will be less reliance on vendor resources. Also if you are in a rapidly changing compliance requirement that requires you to change custom code it may make sense to have your implementation in house and have
a few dedicated in house resources rather than trying to bank on vendor resources.

4) How protective are you about your data? TC transaction data can have sensitive customer and pricing information. Regardless of the physical and electronic security your ASP/SAAS vendor may provide I think a corporate firewall and corporate physical security can be better monitored and remedied. Better safe than sorry!

5) Will my old data be readily available? Once the volume of transaction data becomes high some of the data may be archived to help improve with performance of the application. While working with an ASP/SAAS provider you must be comfortable that the data which will be archived will be readily available for viewing and reporting be it for an internal or external audit.

I hope this post gives you a good framework to make a decision between SAAS and in house implementations.

Cheers

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

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 :)

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 :))

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

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