New Age Global Trade Management Systems
A Comparative Analysis of Traditional GTMs vs. SaaS GTMs
Global Trade Management (GTM) systems are crucial for businesses engaged in international trade, ensuring compliance with ever-changing regulations and optimizing logistics. Traditional GTM systems, like SAP GTS, Thomson Reuter’s One Source Global Trade solutions, Oracle’s GTM Cloud and E2Open, have long been the backbone of global trade operations, but a new era of Software as a Service (SaaS) GTM solutions, exemplified by companies like KYG Trade and Workseer, are transforming the landscape. This blog post aims to educate on the key differences between traditional GTM systems and modern SaaS GTM solutions, highlighting the benefits and advancements that the latter brings to the table.
Traditional GTM Systems: Market Leaders (mentioned above) as Examples
Legacy Architecture
Traditional GTM systems typically operate on a legacy architecture that can be complex and difficult to update. These systems often require significant on-premise infrastructure and extensive IT support to maintain.
Manual Processes and Integration Challenges
Traditional systems often rely heavily on manual processes for data entry and compliance checks. Many critical trade compliance needs are not incorporated and must be supplemented with manual or minimally automated processes. For instance, while HTS codes may be stored, the reasoning and source behind the codes is not. Integration with other systems can be cumbersome, requiring custom code and significant IT resources. These are resources that are typically out of reach of trade compliance teams.
Limited Flexibility
The rigidity of traditional GTM systems can be a drawback in the fast-paced world of global trade. These systems are often less adaptable to new regulations or changing business needs, leading to potential compliance risks and operational inefficiencies.
High Costs and Long Implementation Times
The costs associated with implementing and maintaining traditional GTM systems can be high. Additionally, the implementation phase can be lengthy, often taking months or even years to fully deploy and integrate. In the current case of SAP 11.0 users having to upgrade to SAP S/4 HANA to get software support, the decision to upgrade is virtually mandatory. Or users are faced with migrating from SAP to another provider.
Static Compliance Updates
Compliance updates in traditional GTM systems are often slow, requiring manual intervention and updates. This can lead to delays in responding to new regulations, increasing the risk of non-compliance. In this environment, tariff code updates might be manually conducted annually vs. being automated and reviewed daily, weekly or monthly.
The New Age of SaaS GTM: KYG Trade as an Example
Cloud-Based Architecture
New Age GTMs operate on a cloud-based architecture, offering scalability and flexibility that traditional systems cannot match. This modern infrastructure allows for rapid updates and seamless integration with other cloud-based services.
AI-Powered Automation
One of the standout features of New Age GTMs is their use of artificial intelligence (AI) to automate many of the manual processes associated with global trade management. AI automation that also has a human-in-the-loop feature like KYG Trade, further complies with the regulatory requirement for an importer to act with “reasonable care.” This includes HTS and ECN classification, free trade agreement qualification, forced labor compliance, and AI-assisted regulatory research, significantly reducing the time and effort required from human operators.
Enhanced Flexibility and Customization
SaaS GTM solutions offer unparalleled flexibility and customization. However, most customization can be accomplished through configurations that are controlled by the user. Thus, the IT implementation and maintenance costs can be significantly lower than traditional systems. The platform can be easily configured to meet the specific needs of a business, whether it's adapting to new trade regulations or integrating with existing enterprise systems through APIs.
Cost-Effective and Quick Deployment
The SaaS model reduces the need for significant upfront investment in infrastructure. They can be deployed rapidly, often within weeks, compared to the lengthy implementation times of traditional systems. They can also be implemented in phases and that phased in approach does not increase the cost. This is the “walk before we run” model. The quick deployment means businesses can start realizing the benefits sooner.
Real-Time Compliance Updates
Using integrations to dedicated content providers, KYG Trade offers real-time updates to compliance regulations, ensuring that businesses always have the latest information. For example, KYG’s integration with Descartes CustomsInfo provides a daily stream of updates which are available to the user in real time. This dynamic approach minimizes the risk of non-compliance and allows businesses to respond swiftly to regulatory changes.
Comprehensive and Integrated Features
KYG Trade provides a comprehensive suite of features that address the entire spectrum of global trade management. This includes HTS classification, country of origin determination, export control number management, license requirements, admissibility checks, and more. The platform also supports advanced functionalities like AI-assisted supplier documentation solicitation, ESG scoring, and supply chain mapping.
Key Comparisons
Infrastructure and Maintenance
Traditional GTM: Requires significant on-premise infrastructure and ongoing IT support.
SaaS GTM: Cloud-based with minimal infrastructure needs and automated updates.
Automation and Efficiency
Traditional GTM: Heavily reliant on manual processes.
SaaS GTM: AI-powered automation streamlines processes and enhances efficiency.
Flexibility and Adaptability
Traditional GTM: Rigid and less adaptable to change.
SaaS GTM: Highly flexible, easily customizable, and quick to adapt to new regulations.
Cost and Deployment Time
Traditional GTM: High costs and long deployment times.
SaaS GTM: Cost-effective with rapid deployment.
Compliance Management
Traditional GTM: Static updates with potential delays.
SaaS GTM: Real-time updates ensuring continuous compliance.
User Experience
Traditional GTM: Often complex and user-unfriendly interfaces.
SaaS GTM: Intuitive and user-friendly interfaces with enhanced user experience.
Conclusion
The evolution from traditional GTM systems to modern SaaS solutions represents a significant leap forward in global trade management. Businesses adopting SaaS GTM platforms can benefit from greater flexibility, enhanced automation, real-time compliance updates, and cost efficiencies. As global trade continues to grow in complexity, leveraging advanced technologies and modern platforms will be essential for businesses to stay competitive and compliant in the international market.
By understanding the differences between traditional and new-age GTM systems, businesses can make informed decisions that align with their strategic goals and operational needs. Newcomers to the GTM market stand at the forefront of this transformation, offering a comprehensive, AI-powered, and flexible solution that meets the demands of today's global trade environment.
