by Dean Gionis
With so many moving parts, global trade management (GTM) is a daunting task for compliance professionals in companies large and small. GTM software offers significant benefits. It can
- Increase profits.
- Reduce risk and the potential for fines.
- Expedite product delivery.
- Reduce costs.
- Improve visibility.
- Reduce delays.
- Free up company resources.
- Automatically alert users in different departments (sales, warehouse, purchasing, compliance, legal) of problems.
- Assist in making strategic supply chain decisions.
Despite its tremendous value, GTM software is still overlooked by many companies. Why?
- A false sense of security or being forced to do things manually – It is a misnomer to believe that an ERP system plus multiple spreadsheets is adequate for GTM. While some companies operate this way, they are missing out on tremendous value. Under their spreadsheet scenario, they are merely collecting data manually. With a single integrated GTM platform, companies can not only store data in a centralized database but also benefit from the automated reporting of serious exceptions and/or potential opportunities such as sourcing changes, free trade agreements, bill of material changes, special duty programs, denied party hits or discrepancies of reported values via comparisons of the purchase order, commercial invoice, 7501, vendor check and more.
- Fear and/or cost – The fear that the GTM software implementation will fail or the budget will be grossly exceeded.
- Lack of resources – The belief that the firm lacks the staff resources to devote to overseeing a GTM implementation or developing a justification that the C-suite will approve to designate the required funds.
So what is the secret to getting GTM in a cost-effective manner while ensuring a successful implementation? Here’s a low-risk/high-reward option to move to GTM software.
- Select a software provider whose core competency is GTM. Some corporate leaders aspire to the corporate ideal of “one-stop shopping” and either look to their existing vendors or (make sure you are sitting down for this one) try to develop a homegrown GTM solution. However, providers of general business software – or internal IT professionals – are not specialists in GTM. As a result, such pseudo-solutions do not work “out of the box.” They will need infinite customizations since there are no defined instructions to follow for development and implementation. The effort is essentially a science project.
Either approach commonly leads to millions of dollars wasted on efforts that are completed late – or not at all – and never truly perform all the required functions.
In contrast, true GTM vendors, like QuestaWeb, have one core competency 24 x 7 x 365: GTM software solutions. They can supply complete GTM software solutions with all the functionality and compliance content needed to quickly reap the benefits of automation. Choosing an established specialist will deliver a cost-effective solution, backed by a proven implementation process, and it will perform all the required functions out of the box.
- Identify the greatest area of need and phase in the needed functionality without a full-scale GTM implementation. Some providers offer GTM solutions in modules, which can be very advantageous. As an example, consider the importer that sources in several countries and uses several HTS chapters. That importer would need to quickly compare free trade agreements (FTAs) to determine the most cost-effective source of components or raw materials. Implementing a modular FTA solution is neither complex nor time consuming. And, the importer could implement the FTA solution now and add a full import compliance solution later.
Modular solutions provide the framework whereby it is possible to simply plug in an additional module that shares the same single database. Thus, the subsequent implementation – and associated learning curve – would be minimal. Other modular add-ons could easily address export compliance, denied party screening, global visibility, license determinations, self-filing and more.
Compliance professionals, for some reason, always face a hurdle that other departments don’t: Convincing C-level decision-makers that they need software just as much as finance, purchasing, manufacturing, sales, distribution and human resources. Our earlier blog “Getting the Green Light for a GTM System Acquisition” provides some strategies to use to garner executive approval. Once you get the green light, avoid the science project, go with a GTM specialist and employ the low-risk/high-reward option, especially if your company is not ready to embrace a full GTM solution today.