by Alison Weiss, March 2014
For multinational companies complying with complex laws and regulations to provide goods and services as quickly as possible across borders, the old saying “time is money” has never been truer. But a recent Ernst & Young report reveals that enterprises need to be ready for global trade to grow exponentially by 2020, when world trade in goods is expected to be valued at US$35 trillion—two and a half times the value of global trade in 2010. At the same time, world trade in services is expected to double to $6 trillion. Much of the growth is being driven by demand from China and India, as well as by cross-border trade between companies.
Users of Oracle’s Global Trade Management 6.3.3 automation platform can effectively manage this increase in demand by taking advantage of the new Oracle Global Trade Intelligence module to analyze historical data generated from automating the compliance and customs screening of transactions. This allows users to identify potential process improvements to enable better, faster global trade management decisions.
According to Rosalie Cmelak, director of Global Trade Management Product Strategy at Oracle, many multinational organizations have automated global trade management processes to make them more efficient. For example, automating compliance processes means that documentation is correct and will not delay shipments; automating customs management ensures that goods clear customs for the lowest cost. But until now, it has been very difficult to determine how trade-related transactions affect performance or finances. For example, if a sales order transaction is put on hold for compliance review, executives have been unable to pinpoint how shipments are held up because of the review process.
Because of the intuitive way Oracle Global Trade Intelligence is configured to work with Oracle Global Trade Management, it’s easy for business users to create reports and quickly get the insights into their global trade transactions they need to make more effective business decisions.
“Whether a multinational company with legal entities around the world is manufacturing, shipping, importing, or exporting, every minute counts,” says Cmelak. “If a trade transaction is reviewed for customs or compliance and information is not correct, delays can result in penalties or unhappy customers, or ultimately negatively impact profit margins.”
The Oracle Global Trade Intelligence module is built on Oracle Business Intelligence Enterprise Edition (OBIEE) and provides tools to analyze historical trade transactional data stored in a data warehouse. The module features an attractive user interface and has configurable dashboards that make it easy to create key global trade performance metrics for import and export transactions. Users can analyze performance data to determine specifically where bottlenecks are occurring due to customs and compliance screenings. They can analyze business targets, forecasts, and benchmarks to improve business decision-making or processes.
US $35 trillion
The expected value of world trade in goods by 2020. (Source: Ernst & Young Quarterly Report, April 2012)
In the past, most enterprises did not have staff members with the necessary skills to analyze historical global trade transactional data – the task was traditionally outsourced to costly third-party freight forwarders or customs brokers. Companies had to wait for reports, and then personnel had to spend more time analyzing the data. It was a cumbersome, manual process. In addition, since the information was managed by third parties, it was challenging to provide global visibility into analytical information in companies with operations in different locations.
Today, companies showing the greatest interest in global trade analytics are ones that must manage many transactions in highly regulated industries such as high technology, pharmaceuticals, oil and gas, and life sciences. These companies largely have already centralized and automated global trade management processes, and have ready access to high-quality historical transactional trade data.
“Companies can only start to get the value out of intelligence when they have meaningful trade data that they can trust,” says Cmelak. “Because of the intuitive way Oracle Global Trade Intelligence is configured to work with Oracle Global Trade Management, it’s easy for business users to create reports and quickly get the insights into their global trade transactions they need to make more effective business decisions.”
Alison Weiss is a frequent contributor to Profit.