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An Expert's View about Wholesale Trade in the United States

Last updated: 9 Feb 2012

International trade is presently a 12.5 trillion dollar industry experiencing an automation revolution comparable to the revolution of the 1970s and 1980s that automated corporate financial functions using Enterprise Resource Planning (ERP) systems. The six most common reasons cited for the ERP revolution are: (1) need for a common platform (2) process improvement (3) data visibility (4) reduced operating cost (5) increased customer responsiveness, and (6) improved strategic decision making. Companies implementing trade management automation may expect similar results. A successful GTM implementation will optimize operational efficiencies, maximize automation, strip every unnecessary cost from current cross?border processes, and deliver a positive return on investment (ROI).

Join  the  Global  Trade  Management  (GTM)  Revolution:    Four  Success  Factors   create  On-­?Time,  Under-­?Budget  Implementations   By  Matt  Gersper     International   trade   is   presently   a   12.5   trillion   dollar   industry   experiencing   an   automation   revolution   comparable   to   the   revolution   of   the   1970s   and   1980s   that   automated   corporate   financial   functions   using   Enterprise   Resource   Planning   (ERP)   systems.   The   six   most   common   reasons   cited   for   the   ERP   revolution   are:   (1)   need   for   a   common   platform   (2)   process   improvement   (3)   data   visibility   (4)   reduced   operating   cost   (5)   increased   customer   responsiveness,   and   (6)   improved   strategic   decision   making.   Companies   implementing   trade   management   automation   may   expect   similar   results.   A   successful   GTM   implementation   will                                                                                                                                                               optimize   operational   efficiencies,   maximize   automation,   strip   every   unnecessary   cost   from   current  cross-­?border  processes,  and  return  a  deliver  a  positive  return  on  investment  (ROI).     Problem   Purchasing   a   GTM   solution   is   a   serious   corporate   decision.     The   price   tag   for   GTM   software   alone  can  reach  between  $250,000  and  $1,000,000  or  more.    In  addition,  implementation  costs   are   frequently   two   to   three   times   the   software   cost.   Expenditures   of   this   magnitude   often   require  high-­?level   approval  with   an  executive   signing   the  purchase   contract.  When   corporate   executives  spend  this  kind  of  money,  they  typically  have  gigantic  expectations  for  operational   improvement.       Here   are   four   historical   problems   that   create   obstacles  to  success  and  erode  the  ROI   for   companies  implementing  GTM:     1. Expectations   that   a   GTM  will   solve   every   problem   and   challenge   in   all   business   units   around  the  world.  A  never-­?ending  or  unrealistic  list  of  requirements  leads  to  budget  and   time  overruns,  unmet  expectations,  and  angry  bosses     2. Lack  of  a  clearly  defined  scope.  What  is  the  project  expected  to  accomplish?  When  will   various  milestones  be   achieved?  How  much  will   the  project   cost?  Who   is   the  project   leader   and   what   authority   does   he   or   she   have?  Who   is   on   the   team?  What   is   each   person?s   role   and   expected   time   commitment?   Ambiguity   and   vagueness   lead   to   individual   interpretations,   wasted   efforts   born   from   good   intentions   and   unintended   consequences   that   create   budget   and   time   overruns,   unmet   expectations,   and   angry   bosses     3. Adding  avoidable  complexity.  Companies   implementing  GTM  systems  for  the  first  time   often   add   unnecessary   steps   and   make   common,   but   preventable   errors   that   create   budget  and  time  overruns,  unmet  expectations,  and  angry  bosses   4. Failure  to  integrate  the  GTM  project  to  the  overall  enterprise.    The  lack  of  organizational   and   process   integration  misses   opportunities   to   identify   redundant   or   needless  work,   fails   to   eliminate   unnecessary   costs   in   the   business,   and   leaves   potential   synergies   unfulfilled       It   is   important   to   define   realistic   business   objectives,   establish   achievable   expectations   and   clearly   define   the   project   scope.   Furthermore,   a   clear   vision   and   plan   for   both   people   and   process   integration   will   maximize   efficiencies,   create   the   greatest   automation   possible,   and   eliminate  every  unnecessary  cost.       Solution   Multi-­?national  companies  seeking  to  maximize  the  ROI  of  expenditures  made  in  IT  systems  and   the   overall   effectiveness   of   cross-­?border   business   processes   should   select   partners   that   specialize   in   the   four   success   factors  of  GTM,   providing   the   experience,   resources,   and   team   effort  to  deliver  on-­?time  and  on-­?budget  implementation.     Four  Success  Factors  of  GTM:     1. Current,   accurate,   and   digitized   country-­?specific  trade  data  (content)  including   harmonized   tariff   schedules   (HTS)   for   every   country  with  up-­?to-­?date   duties   and   taxes,   importing  and  exporting  regulations  for  every  country,  global  sanctioned  party  lists,  etc.   2. Company-­?specific  business  data  (content)  with  HTS  classifications  assigned  to  each  item,   for   every   country,   with   supportive   rulings   and   other   documentation   stored   with   the   item  to  meet  the  customs  requirements  of  countries  around  the  world     3. Applications  designed  to  automate  import  and  export   transactional   processes   on   a   global  scale.    GTM  applications  can  provide  automated  connectivity  of  all  parties  of  an   international  supply  chain     4. Integration   expertise  and  experience  to  effectively  integrate  enterprise-­?wide  content   and   processes   to   maximize   a   company?s   ROI   from   its   investment   in   IT   systems   and   enterprise  applications       Conclusion   Content,  connectivity,  and  compliance  are  critical  to   international  trade  process  optimization.   More  than  ever  before,  governments  around  the  world  are  requiring   importers  and  exporters   to  file  import  and  export  documentation  electronically  which  means  global  trade  content  must   be  reliable,  digital,  and  integrated  in  GTM  and  other  enterprise  systems.    Compliance  requires   accurate   content,   delivered   to   the   right  place  at  the  right  time.    Any  compliance  failure  can   cause  supply  chain  interruptions  and  stall  the  movement  of  goods.     Companies   successfully   implementing   GTM   can   expect   significant   operational   gains,   comparable   to   gains   achieved   through   their   ERP   implementations   of   the   1970s   and   1980s.   Assembling  a   team  of   trusted  partners   that   specialize   in   the   four   success   factors  of  GTM  will   maximize   efficiencies,   create   the   greatest   automation   possible,   and   strip   every   unnecessary   cost  from  current  cross-­?border  processes.    Leveraging  best-­?in-­?class  country  trade  data,  state-­?of-­? the-­?art   business   data   management   and   GTM   integration   expertise   can   help   multi-­?national    companies  maximize   the  ROI  of  expenditures  made   in  GTM  and   IT   systems  and  optimize   the   effectiveness  of  cross-­?border  business  processes.     On-­?demand  Webinar,  60  minutes  [http://webinars.emergys.com/Picture  Perfect  Integration.wmv]         Matt  Gersper  (mattgersper@gdmllc.com),  founder  and  president  of  Global  Data  Mining  and  co-­? owner   of   CUSTOMS   Info,   has   over   20   years   of   experience   optimizing   processes   and   helping   customers  turn  unorganized  data  into  information  that  managers  and  executives  can  leverage   to  improve  performance.    
Posted: 17 May 2011, last updated 9 February 2012

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