GTM and the C-suite

Compliance professionals need to come armed with an airtight case for GTM automation investment

By: Wayne Slossberg
Photo: Prasit Rodphan /
   For years, I have talked about the need for companies to embrace technology for global trade management (GTM) and compliance. Although there’s been an uptick in use among medium to large companies, technology adoption still is not occurring at a quick enough pace.
   Let’s face it, importing and exporting become more complex every day, and the associated regulations are daunting. Companies send compliance personnel to conferences to attend workshops and lectures to learn. But when they come back to the office, they return to the same old tools: computers, spreadsheets and content that may or may not be current and complete. C-level executives still don’t understand the need for GTM technology and the positive impact it can have on operations and the bottom line.
   They gladly approve the purchase of lower-cost pieces of technology – none of which are integrated – or they look to ERP system providers to build GTM systems at significant cost when GTM specialists already offer outstanding GTM systems at a reasonable cost.
   A recent example comes to mind. I did two presentations for a large global corporation. The company managed trade compliance with multiple systems, each separate and apart from the others. At the first demo, the compliance personnel were nothing short of amazed. They didn’t realize that all of their global information could be at their fingertips in a single database – or that every action they needed to manage could be handled by one system. The staff immediately recognized the value. However, convincing management was a daunting task. Why is it that these otherwise progressive C-level executives who are running a global empire cannot recognize the value GTM technology brings?

   What Is the Value of GTM Technology? GTM technology puts a company in control of its business, its operations and its trade-related functions. GTM limits surprises when it comes to manufacturing and product movement. A company not only controls the information flow but also sees all the details related to its global supply chain in a single place. A user can correct issues before they reach problem status, minimize error occurrence and quickly move to correct unavoidable ones. On top of that, companies can employ business analytics for data-driven decision making.
   More specifically, companies can:

   • Make informed sourcing decisions using detailed information that reflects current conditions, especially logistics availability.
   • Know where goods are at all times and anticipate and circumvent delays before they happen.
   • Identify C-TPAT participants and enhance speed to market.
   • Save on Merchandise Processing Fees and entries and defer duty by establishing and operating a Foreign Trade Zone.
   • Manufacture in a Foreign Trade Zone and minimize duties due to reverse tariff.
   • Assure all vendors and products are compliant.
   • Comply with all the regulatory provisions currently in effect.
   • Maintain all compliance-related information in one place, including products, pricing, sourcing decisions, harmonized tariff codes, vendors, denied party screenings and more. Even if a company is sourcing the same product in 10 different countries and must address 10 different sets of compliance requirements, it is all in one database and updated in real time.
   • Generate all the required documentation automatically, and do real-time updates if circumstances or information changes.
   • Manage own entries to the extent desired.
   • Manage by exception, as the technology applies rules and regulations consistently. Only exceptions – items that fall outside of the parameters established – require human intervention.
   • Qualify products in order to take advantage of hundreds of free trade agreements around the world.
• Be more accurate and avoid fines, penalties and focused assessments.
• Possess complete audit trails of every trade-related decision or action taken.
• Handle focused assessments more cost effectively by having all of your documentation easily accessible in a central locale.

   What GTM Technology Should I Acquire? First and foremost, I would advise companies to look to a GTM specialist. There are many vendors in the marketplace, and each has a unique product offering and business model.
   Second, a company should never base its technology decisions on what its competitors are doing or have done. Find the best technology for your individual company. Conduct due diligence and assure the technology is current, includes the functionality you need and can be deployed cost effectively using a method that works with your operations.
   Third, remember that a chosen GTM vendor need not be the largest company in the space. Understand that a specialist, which might be smaller, can be more responsive and offer more personalized service and support. Size doesn’t matter when it comes to the best vendor.
   Of course, budget is always a primary factor in every technology acquisition decision. Many vendors are aware of this fact and offer single modules or starter packages that a company can grow with as budget increases or further needs arise.

   Changing the C-Level Mindset. Often, the key to changing the C-level mindset is not listing benefits but learning to speak the language that the C-level understands. In fact, Beth Pride, president of BPE Global, and I did a webinar on this very topic last September. Some of the recommendations included:

   • Measure operational costs today and then identify and quantify the ROI to be gained by implementing a GTM solution. That way, the technology request will include a strong rationale whereby the allocation of funds makes financial sense.
   • Don’t rely on a vendor’s ROI estimates. Consider engaging a financial analyst who understands these costs in their entirety. Identify the “spend” between internal headcount, external outsourcing of headcount and investment in a GTM system. There will be a point at which investment in a GTM system is not only justified, but also a common-sense decision. Typical ROI sources include: increased duty avoidance, decreased taxes, lower inventory carrying costs, reduced headcount, shorter cycle time and increased sales.
   • Tie the GTM project to another internal project that a company executive is championing. For example, if there is a cost-cutting initiative underway, delineate the duty avoidance opportunities technology can bring and make these savings a cornerstone of the overall initiative.
   • Consider bandwidth as a justification. If an acquisition is pending, for example, the timing might be right to make the case that staff won’t be able to scale to support the new acquisition without automation.
   • Assess technology’s impact on the sales cycle. A shorter cycle is a potent argument.

There will be a point at which investment in a GTM system is not only justified, but also a common-sense decision.

   In the final analysis, it will be the job of the compliance specialists who desperately need the technology to identify the particular justification that will resonate with their C-level. While a listing of benefits can be helpful, savings in terms of time, money and human resources, efficiencies in terms of better meeting corporate goals, and cost avoidances, such as fines and penalties, will be the language executives understand best.

Wayne Slossberg is senior vice president of GTM software provider QuestaWeb.