Trade Compliance teams often deal with complexity stemming from shifting trade regulations, tariffs, internal requests, and the sheer volume of basic tasks.
Chief Product Officer
Too often we hear from Trade Compliance professionals that they are constantly challenged by their job. Trade Compliance teams are often understaffed and deal with complexity stemming from shifting trade regulations and tariffs, internal requests, and the sheer volume of basic tasks. Trade compliance professionals take their work very seriously and want to do a good job. But, given the nature of their work, most would say that their job is highly complex. So, this begs the question:
Is Simplicity in Trade Compliance Achievable?
In short, the answer is yes, simplicity in Trade Compliance is achievable. But, in order to understand how we get to simplicity, we must first understand why Trade Compliance is so challenging and labor intensive.
There are 5 causes of complexity in Trade Compliance:
A common theme as a cause for trade compliance complexity is that information is all over the place and difficult or time-consuming to get. The lack of a centralized information repository requires effort and time to retrieve the necessary information from multiple systems. The source of the information can be stored on systems that are internal to the enterprise or external supplier and service provider systems. The lack of centralized data “sucks” time. Storing information in disparate solutions increases the level of stress because too often it is impossible to get the information when it is needed, in formats that are meaningful, and with a level of accuracy that inspires confidence.
Poor synchronization of information.
Too often information is available in non-relational formats i.e. Excel or .csv files. In these formats, the data is not synchronized or standardized. Poor synchronization and standardization of data means manual intervention (time-consuming and error-prone) is necessary to ensure validation and accuracy. And that still does not address the fact that the information is not stored centrally (cause #1) and therefore not easily accessible.
There is little or no system support to identify and flag information that is incorrect or inconsistent with the source information. Examples include:
products arriving at the port of entry without proper description or classification;
samples arriving without purchase orders from accounts that are not on the system;
quantities declared on the ASN not agreeing with what is ordered or received;
the value for duty, units of measure, or other elements of the customs entry or PGA filing may be incorrect.
This is not an exhaustive list, but you get the point. Auditing and validating information and making changes, as and when necessary, requires manual oversight and management. Dealing with information inconsistency and related problems frequently and repeatedly requires spending a lot of time on non-value added activities. Most importantly, the inability to properly validate or audit because of the time required means greater compliance risk to the company, increased costs, and possibly fines.
Limited Reporting and Analysis.
Getting the right information together to prepare trade compliance-related reports is difficult and time-consuming. If the information is not centralized it needs to be gathered from ACE and other sources and put into spreadsheets so that it can be reported upon. In addition to the time element, there is the risk of inconsistency in reporting due to the unstructured nature of the information. The level of frustration and interest focused around reporting is really quite remarkable.
Complexity is not only in the specific tasks but also in the volume of work.
The task required to execute trade compliance are many, well understood and documented. And, while there is software that supports specific Trade Compliance tasks (i.e. DPS, HTS Classifications, License Determination, FTA COO determination, etc.) the solutions are usually stand alone and not synchronized. One of the root causes of trade compliance complexity lies in the sheer volume of information that is necessary to support Trade Compliance, the ability to access the information easily and to use it productively. Trade compliance is complex because the level of detail required and the volume of information necessary. The detail and volume necessary to manage trade compliance are compounded by the lack of an over-arching capability to aggregate the information and manage it in an accessible, meaningful, and useful way.
6 Steps to Simplifying Trade Compliance:
Use solutions that connect all the dots in your Trade Compliance universe.
There are platforms that enable information to be aggregated and centralized and enhanced to support the requirements and processes of your Trade Compliance team. The platform needs to link content solutions such as Denied Party Screening, HTS/Schedule, FTA determination, License determination, etc. as well as transactional information from suppliers, customers and service providers. It is not the ease of accomplishing any one task that creates simplicity for the Trade Compliance professional, it is the connection and data flow between the various point solutions and enterprise systems.
Articulate the requirements and processes you have today and how you would like the future to look.
Your wish-list should encompass current requirements and future wants so that you can find the solution that can flex and grow with you. Part of this requirements definition is to understand the value that a solution should deliver so you can properly evaluate the solution. You might not have the ability or bandwidth to do this on your own and need help. If so, a good solutions provider will help walk you through this activity.
Find a solution provider that makes the transition easy.
A good solution provider will listen, guide and support you through the transition period and service you throughout the duration of your relationship. This means finding a solution provider that understands that your business processes are unique and can configure their solution to your needs, both from a validation and process perspective.
Preach the importance of simplified Trade Compliance.
Make sure your boss and other stakeholders in the company understand how simplified Trade Compliance processes ensure that they get the information they need to support and streamline their work.
Make sure that you are NEVER locked into any long-term contracts.
There is no good reason that any company or person should be locked into a solution provider for an extended period of time (greater than 1 year), and it is not in your organization’s best interest. Find a great solution provider that needs to earn your loyalty each and every day.
The User Interface/User Experience (UI/UX) enables access to the right information.
The UI/UX is truly a differentiator and a major determinant as to how simple your trade compliance can be. The UI/UX is what provides the ability to manage master data and synchronize it with all the necessary process activity that streamlines the work and the workflow. A well-designed trade compliance UI/UX guides the user through the trade compliance processes ensuring that master data is comprehensive and complete, that processes are integrated so that manual entry and redundancy are eliminated, and that information is available in real-time.
Achieving simplicity in Trade Compliance isn’t difficult. Advances in technology and the internet have enabled software providers to develop solutions specifically with trade compliance simplicity as an objective. New solutions take a holistic approach to the area of trade compliance, which is radically different from the functional approach taken by traditional vendors.Traditional vendors focus on functional competence instead of the user experience. The holistic approach has a strong focus on process design and control that results in streamlined workflow and effort. The holistic design builds all the required functionality into the UI/UX so that processes and data management are greatly simplified.Simplifying trade compliance requires the integration of deep functional support with a well designed UI/UX allowing the trade compliance professional to reach their full potential from both a personal and organizational perspective.