A white paper by Thomson Reuters Onesource – Valuing global trade automation – looks at why companies should invest in technology for global trade processes and how to convince senior executives that the benefits will outweigh the initial costs.
According to the authors of the report, EY's Todd R. Smith and Mary Breede from Thomson Reuters, most trade compliance departments are “riddled with time-consuming, error-prone manual processes, including import and export documentation, origin determination for preference programs, and classification processes”, all of which can “lead to shipping delays, compliance violations, and poor visibility”. However, they make the point that global trade interfaces directly or indirectly with many other corporate functions, including sourcing & procurement, warehouse management, sales, logistics, customers as well as payables and receivables within finance. Automated global trade processes can mitigate risk, while enabling the business to work more smoothly.
The report sets out several reasons for automating global trade, associated with benefits to risk, cost and value. The table below sets out some of the reasons, which include improved data that enhances risk management, better management of customs fees, duties and taxes, and better alignment with business objectives.
Getting executive buy-in
Getting business leaders and other stakeholders on side by underlining how global trade automation will help them work towards organisation-wide goals is also important. The authors write: “Whether you are making the business case to your CEO or IT Director, it is critical to “speak their language” and connect global trade automation to their top goals.”
Another crucial factor is to be aware of the difference between companies that do and those that don't. This table gives a comparison:
The authors also suggest taking a step approach to investing in global trade automation. They outline the following steps:
- reviewing the existing global trade processes;
- envisage the future state of the goals you wish to realise;
- quantify in detail the costs and the benefits;
- agree upon the relevant use cases; and
- develop a formal ROI and business case.
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