By: Arthur Hall
Submitted: 2010-06-21 10:03:09 | Word Count: 977
Numerical strength of American companies expanding business operations on global scales are increasing in the recent years. Consequential to such growth of global trade has given rise to comparable huge demands for such products and services that are basically aimed at providing assistance in the import and export operations carried out by the companies. It is not surprising to find that most of the companies have turned technologies as fast solutions for the gaining of global trade expertise.
A growing trend among such companies is over dependence on computer technology and therefore, software. However, those depending solely on technologies and software without taking into consideration the humanitarian and psychological aspects might come up with huge disappointments on multiple occasions. “The fact is that technology can be an indispensable tool for global trade operations. But in order to reduce the risks and maximize the rewards associated with global trade, software is not enough.” (Source: Jeff Guettler – Reducing the Risks of Global Trade: Software is not enough.)
It does not mean that technologies are bad or deficient in themselves. Fact remains that any global trade technology whether it can help with supply chain managements, transaction managements, logistics, or any such other process, needs to be installed, customized, managed as well as updated. Effectiveness of the technologies used depends largely on the quality of the data entered as well as interpreted. Experts have to ensure the information as detailed and accurate. Several factors need to be taken into consideration in use of risk management software uses. For instance, they require understanding the following aspects quite clearly.
• Materials that are used for designing and manufacturing the products.
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• The ultimate use of the products and their end objectives.
• Marketing of the products and the methods to be adopted for profitable marketing.
• Customers’ impression about the product. Howe they view it.
Apart from the above, the companies are also required to program the software including the detailed information about the entire supply chain. This should include the -
• Location where it originates and the current rules, regulations, and procedures followed in such country.
• Detailed background about the manufacturer company.
• Current standing of such company with the United States customs.
• The way the goods would be transported and arrive at the destination.
Role of the manager cannot be undermined. Once the program gets designed, someone should be there to manage it. One of the major problems in global trade operations is that laws and regulations tend to change almost at regular intervals and it is necessary that someone takes care of managing them effectively. It requires a good deal of expertise both about the legislations and the way global trade operates so that there is no wrong interpretation of the rules and warning flags are waved as and when required.
“Over the last few years, a new industry has emerged specifically to meet the growing demand for expert assistance with global trade operations. End-to-end global trade management service providers (e2e GTMs) can offer expertise related to the full spectrum of global trade processes.” (Source: Jeff Guettler – Reducing the Risks of Global Trade: Software is not enough) Since they are importers themselves, these e22 GTMS employ the most advanced and sophisticated technologies in their own global trade operations and at the same time they help their clients by sharing these tools with them. In result the clients benefit by getting the tools without having to purchase them. At the same time the practice also dispenses with the requirements of learning, upgrading or managing the technology at their end. Normal practice for the GTMs is that they depute their own expert team that enters and updates all data for the global trade operations of the client. In the process they maintain all the system accurately while interpreting the information that the system provides.
What is the importance of the GTM in the entire episode? “Perhaps more importantly, an e2e GTM can identify and address many issues technology cannot even tackle. Because these partners have conducted international trading for years, they can help locate sourcing and manufacturing, suggest best practices to improve existing operations, and lend their clout and global reputation to assist in negotiations with worldwide trade partners.” (Source: Jeff Guettler – Reducing the Risks of Global Trade: Software is not enough)
A major advantage of obtaining GTM services is that they limit the risk factors quite considerably. Having global networks as well as localized operation knowledge required for conducting business on global scale they take title for transactions and arrange settlement of payments and leverage the international connections. GTMs could significantly simplify the entire process thereby considerably limiting the risk factors for the clients that they would have otherwise been facing. Companies expanding their business transactions overseas on global scale have to deal with increased complexities that are inherent in the process of global trade operations. Of course technologies will come up handy in providing assistance but one should clearly appreciate that technologies are tools and it requires expertise to operate them effectively. In every aspect including customization, updating, interpretation as well as management, technology plays a major role. Technology is the means and not the end in itself. One should clearly appreciate the way the technologies can be utilized and put to work.
Some of the companies consider developing internal expertise the answer to the problem. Others feel it is expedient outsourcing the operations or at least the important part of it. They consider such outsourcing to be faster and smarter solution for their global trade operation related problems. However the unique feature of the situation is that either way software alone cannot be the solution. Human expertise is the essence of success in global trade operations and making the right choice will enable the company to grow with success as big as possible in the world.
