Selling Compliance Automation

To win executive buy-in for a trade compliance automation initiative, Anritsu's Jane Solomon recommends building the business case on both hard- and soft-dollar savings


By Andrew K. Reese

As Jane Solomon sees it, automating trade compliance processes is just plain common sense. "I don't know how any company in the long run can afford not to automate to reduce their risk and their exposure to making errors," says Solomon, who is corporate trade compliance manager at the U.S. business of technology company Anritsu.

Fortunately for Solomon, a 19-year veteran with the company and an 18-and-a-half year veteran of trade compliance, Anritsu was an early adopter of technology to automate its export compliance processes, and the company continues to use a Web-based solution from TradeBeam to ensure that its high-tech products only get into the hands of authorized end users and only with the proper licensing. Solomon's recommendations for building the business case for the solution are instructive for other supply chain executives looking to invest in trade compliance automation.

The Compliance Risk

Export compliance has long been a concern for companies like Anritsu, which manufactures network test and measurement equipment for the communications and industrial markets. Many of the company's products fall into the "dual-use" category, with both civilian and potential military applications. U.S. regulations, enforced through the Bureau of Industry and Security (BIS), require Anritsu to screen customers, end users, end-uses and destination countries for these products. In some cases, products may not be authorized for sale to a particular end user, or for a particular end use, although more frequently the company must apply for a license to sell a specific product to a given customer or deliver to a certain country.

Penalties for shipping to a denied party or failing to put in place the proper license can be quite severe, and the government also can hand down fines for providing inaccurate documentation regarding shipments, considered a misrepresentation of fact. Ultimately, the U.S. government can restrict a company's ability to export goods, as exporting is considered a privilege rather than a right. For this reason, accurate screening is essential.

At Anritsu, screening orders is a multi-step process, with up to five different entities on each purchase order — including "build to," "ship to," "sold to" and "end user" — verified at the time of the order, in the event of any changes to the order, prior to shipment and following any delays in the shipment. In years past, in North America alone, as many as 30 people at Anritsu were involved in the tedious task of checking orders against more than a dozen lengthy lists of "denied" parties for potential restrictions or licensing issues. Solomon would periodically fax or e-mail updates to the list to the company's facilities around the world. That process became virtually unworkable after the terror attacks of 2001. "Prior to 9/11, those lists changed at most twice a year. After 9/11, the lists started to change on a daily basis," Solomon says. "And if you've ever looked at these lists, there are hundreds of thousands of names on them. It's just mind-boggling."

Automating the Process

As early as 2000, Anritsu moved to automate at least a portion of the screening process when it signed up to use a hosted solution offered by a company called Capstan, later acquired by Qiva, which itself was folded into TradeBeam in 2003. Solomon says that, while she was considering the different types of solutions available for trade compliance, her IT department strongly urged her to go with a Web-based application, which could be treated as a service (a variable, versus fixed, cost) and which could be more easily integrated both with Anritsu's internal processes and with whatever other software or enterprise resource planning (ERP) solution the company used.

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