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 :))