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Intrinsic trade compliance issues with SMEs

We often hear about the trade compliance issues with small and medium enterprises (SMEs) more frequently as compared to the larger organizations. Small companies are impounded with many challenges attributed to their limited trade management staff and tight budgets. In spite of their small size, there is no exemption from compliance requirement for these SMEs. The cost of non-compliance for these enterprises is very high since it may result in loss of privilege to export or import, financial loss, and disruption in the supply chain.

Challenges

Some basic challenges that these enterprises face are of the following nature:

·         Lack of know-how in trade compliance due to lack of experience

·         Failure to ramp up for the export compliance requirements of highly regulated products when they expand their product lines from products of low regulatory controls

·         Absence of senior trade compliance leadership

·         Not being aware of export / import procedures

·         Lack of trade compliance charter and in-house training program

·         Untimely fulfillment of trade documentation

·         Dependence on third-party vendors such as freight forwarders and customs brokers for trade compliance-related activities

Mitigation

To mitigate these teething or persistent trade compliance issues, these enterprises need a simple but comprehensive in-house program that ensures the following:

Hiring an experienced trade professional to design, plan, and implement a trade compliance program from a domestic or international trade perspective

1)      Concisely written trade compliance policies and periodic reviews that enable the staff to understand about the day-to-day compliance activities and take the best decision when faced with difficult situations

2)      Product classification and the applicable regulations knowledge, including duty deferment / subsidies and trade agreement benefits

3)      Government authorizations / permits requirement for export / import of products and their maintenance to reap the short / long term benefits

4)      Periodic audits and refresher training programs

5)      Informed pricing and investment decisions for sourcing the product considering regulatory requirement and free trade agreement benefits or duty reduction program evaluation

6)      Appropriate monitoring and enforcing of compliance program

7)       Preparation of systematic trade compliance mechanism to overcome trade challenges by implementing a global trade management system as per the available and allocated budget

How Oracle GTM can help SMEs to become trade compliant?

In the newer world of cloud-based compliance, systems may offer a solution that fits these SMEs needs, but the foremost and important thing is to get senior management to understand the importance of a trade compliance management program. The manageable fee structure of cloud software allows small and medium companies to make smaller upfront investments (such as license fee, annual maintenance fees, hardware procurement, etc.) and avail all the benefits of the software. These cloud implementations are usually faster than the on-premise ones. Oracle Global Trade Management (GTM) cloud-based software addresses almost all trade compliance related needs of an SME at an affordable cost.

Using Oracle GTM's cloud-based application will lead to a trade-compliant atmosphere within the company for less than a few hundred dollars a month. Cloud-deployed Oracle GTM is a multi-tenant version of the on-premise Oracle Transportation Management (OTM) where Oracle hosts the software and handles all the routine maintenance and upgrades of the system giving ample return on investment (ROI) against total cost of ownership (TCO) without any security concerns.

To know more on GTM Solutions, please meet us at the Infosys Booth during the OTM SIG APAC 2016 Conference (Singapore) and our experts shall be delighted to explain the details.

Written by: Ravikiran Narayan Khobragade and Mohammad Haider Talat

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