Of course, many companies can be overly focused on "what they do" and fail to take into account the total picture — a very shortsighted approach. When a product database is introduced — and spreadsheets eliminated — compliance personnel gain an overall view of products, pricing, compliance requirements and documentation. Information is power, and visibility brings both new business options and management control.
Few recognize the significance of achieving management control via a product database. Reliance on customs brokers and freight forwarders has given them a false sense of security. However, the U.S. Customs' Importer Security Filing (ISF) program, also known as "10+2," is bringing the issue of management control to the forefront and illustrating the dangers of relying on others to compile documentation on your behalf without the benefit of a product database. Recently, an electronics firm that had its third-party logistics provider (3PL) prepare its ISF filings decided to transition to an ISF technology driven by a compliance product database. When the system went live, the software identified over 300 errors in the ISF documentation for the very first day's shipments. It was not the fault of the 3PL preparing the ISFs; it was the information the firm furnished to the 3PL.
In this case — as is the case in many organizations — multiple independent parties furnish the input needed to prepare ISFs, increasing the margin for error. A product database limits opportunities for mistakes by validating input against a central database. As Customs moves toward strict enforcement of ISF, many companies likely are going to experience real problems. They are relying on the proliferation of ISF offerings currently flooding the marketplace that operate with a quasi-product database or, worse, an independent product database.
Four Criteria for GTM Solutions
So what should you look for in a solution? Whether purchasing a product database or a full-blown GTM system, the first thing any firm should look for is a vendor that (1) specializes in GTM and (2) holds Automated Broker Interface (ABI) certification or ABI connection (go here for a vendor list). This certification means that the firm's technology is qualified in some cases to file import data electronically with Customs or be updated electronically from Customs. ABI expedites product movement and release through electronic transmission, validation, confirmation and correction of entry summaries; it also allows electronic payment. Moreover, ABI vendors have access to ABI messaging that keeps parties informed of the most current status information and advises them of any outstanding issues. Most important of all, ABI certification means that the content fueling your GTM technology is as up-to-date as possible.
Second, consider looking for a firm that offers its solution both as licensed software (purchased and placed behind your firewall) and as a software-as-a-service (SaaS) offering. Firms that have truly Web-based software should be able to offer both deployment options simultaneously. If a firm cannot give you both deployments, you may be purchasing older technology that really isn't Web-based but rather is "disguised" to look as though it is. True global trade management means you want your vendors, freight forwarders, brokers and others to be able to access and use the system over the Internet from wherever they are located in the world.
If you do opt to go the SaaS route, research both your costs and how they are assessed (per transaction?). Find out what provisions exist should your provider go out of business. Most vendors say they will provide your data in that event, but will you have the application to actually use your data? If you can't mine the data, simply having the file is meaningless.
Third, look for certifications. If you have a certain ERP system, check whether the GTM vendor's software has been certified for integration with that ERP system or has interfaced with similar systems.
Fourth, look for GTM solutions that are totally integrated and allow you to phase in implementation over time. For example, today a firm's most pressing need might be to acquire a compliance product database. Six months down the road, however, the company may want to prepare its own ISFs and self-file. A year from now the firm might want to have a site designated as a Foreign Trade Zone. Does the vendor have all those fully integrated modules available to plug into that centralized compliance database? Firms should only have to integrate one time, even though their business needs will grow and change over time.