Part III: Global trade technology adoption
This is the final of a three-part article on the three primary aspects to global trade in 2022.
The following is an excerpt from the 2022 edition of Global Trade report from global information agency Thomson Reuters:
“Given the increasing complexity of the international regulatory environment and the speed at which trade data must now be processed, it is no surprise that global trade technology is playing an increasingly important role for companies that import and export goods around the world.
What is surprising is how few companies have fully invested in trade technology, particularly automation. Considering how much more efficient and accurate such systems are, as well as the ancillary benefits that come from having a more granular understanding of, and control over, the entire supply chain, this lack of investment is troubling.”
Almost half the businesses worldwide are currently behind the curve or are in nascent stages of adoption of global trade management technologies. Of these, 12% are still relying on manual systems for logistics and trade management, according to a study by Thomson Reuters. Only about one-third of global businesses are currently in the process of adopting automation-based technologies for global trade functions.
While it is true that the transition from manual to automated technologies (either partially or completely digitalised) is often the most tedious and labour-intensive part of the transformation process, the key aspect to remember is that not the entire process needs to happen at once. Thomson Reuters writes:
“For example, it is possible to automate a function like denied party screening using separate software modules that don’t require digitalization across the entire enterprise. Such options allow companies a great deal of flexibility in how they go about adopting and integrating new technologies into their existing systems.”
About one-third of global businesses are currently satisfied with the position they are currently in and see no scope for immediate change.
How far a firm is in the digitalisation of its trade management systems depends on a varied range of factors – analysing the needs and goals of the firm in minimising risk and maximising efficiency. The other key factor in this regard is the extent to which a company actually wants to leverage its trade data to gain a competitive market advantage.
At the cutting edge of technological innovation, for example, AI and blockchain technologies may soon offer firms newer ways to manage global trade functions – in gathering and processing data for strategic business intelligence. Currently, though, only about one in five are exploring this scope.
A little over half the firms globally continue to rely on partially integrated systems that don’t yet give them full visibility across the firm’s geographies and business units. Thomson Reuters writes, ”almost one-fifth (19%) are still operating in highly siloed environments with disparate systems for each region and/or business unit, severely limiting their ability to share, compare, and analyse their business’s trade data.”
One of the major advantages of automating trade functions using a third-party provider is to ensure the product is adequately supported and changes in trade classifications and regulations are automatic as well. Only one in five are currently using automated third-party intelligence to keep them up to date with compliance requirements.
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