Digitisation – the boost you need to win in global business
Dec 02, 2019 Comments (0)
In our digital age, customers are playing a pivotal role across all industry sectors. Customer demands are rising and continue to shape markets and fuel globalisation.
Companies need to be prepared to deliver goods and services anywhere in the world, cheaply and without delay or hassle for the customer. But global trade is governed by stringent and frequently changing national and international regulations, and complex processes.
Take importing and exporting, where the challenge goes far beyond meeting regulatory requirements. Customs processes must be handled quickly, transparently, and at the lowest possible costs to meet customer demand and ensure productivity. Companies of different sizes are affected in different ways:
Start-ups may struggle to find the right partners for customs management and to implement the first digital customs management set-up.Medium-sized enterprises may find it tricky to integrate customs filing software into their existing ERP system landscape and/or to automate and replace email-based processes with established customs brokers.Multi-national corporations may struggle with overall transparency and the harmonisation of customs IT landscapes across various sites while efficiently managing frequent changes in their network and customs processes.
Recent global trade developments have highlighted the importance of digitising customs processes. Take Brexit: if the UK was to leave the Customs Union, trade with EU member states would be subject to import and export declarations. The resulting five-fold increase of customs declarations will require high-performing digital customs landscapes, both for government and businesses.
Other examples are trade wars and frequently changing trade relationships. Changes typically result in new import and export tariffs and new preferential treatments for goods from specific origins – all of which must be promptly reflected in daily supply chain processes.
Another area of constant change involves restricted party lists and various embargoes by different authorities across the globe. It is crucial to comply with these regulations in all national and international business transactions, e.g. screening your business partners. Based on the sheer volume of official lists and restrictions to comply with, it is virtually impossible to efficiently manage this task manually. A well-integrated digital global trade landscape empowers businesses to manage inevitable changes efficiently and compliantly while saving costs and meeting customer demand.
But many companies haven’t yet understood the importance of digital customs management. The global trade management study “Clear the track for Digital Customs Management”, published in 2018, found that only one third of surveyed companies prioritise the digitisation of customs processes over other business sectors.
And 63% of companies still communicate with their customs agents by e-mail and telephone – only 26% use modern IT interfaces. This is astonishing because automating and integrating customs broker collaboration can slash broker fees by up to 50% while also speeding up the process and significantly reducing risks and error-rates.
There are many other areas with economic impact and excellent return on investment in digital customs management, e.g. bonded warehouses, the smart use of simplified procedures, or automated product classification.
The current digitisation pressure on businesses in global markets is at an all-time high. Customers want online access to orders, faster deliveries, green options, and ease of returns. Data is increasingly expected to flow throughout the supply chain in real-time alongside physical goods or services. Competition is tough and regulatory requirements are on the rise. So investing in technology is crucial to ensure a business’s future success.
As a rule of thumb, businesses should start digitising in areas with high economic impact and good ROI. Customs management clearly fits the bill. The time for future-proofing your global trade is now.
Geoff Taylor is Managing Director of AEB in the UK and has been with the company since 2017. Together with his team, Geoff works closely with manufacturers and traders across industry sectors to understand the impact of market developments on global trade processes and what it takes to build efficient and flexible supply chains in the digital age to ensure future success.