Stacy Diève, Strategic Trade Manager, Global Tax and Customs, Cisco Systems International, on why digital transformation requires access to robust data infrastructure and data management
Supply chain efficiency has always been important to international trade but widespread shortages in components for producing household electronics, cars, and machinery have made this a mainstream concern in recent years.
For businesses, holding less stock is always an attractive option. It reduces the cost of storage space, lessens waste through faster turnaround, and improves cash-flow. However, it also makes companies of all sizes reliant on global supply chain efficiency. Delays can mean running out of stock, resulting in lost productivity, risks to critical infrastructure, and potential loss of customers.
Predictability in inventory management is only possible because of supply chain efficiency, which relies on digitising as many processes as possible along its many links, from remote supplier to end-consumer. Replacing manual border procedures, including handwritten signatures and paper-based declarations, streamlines the movement of goods while also limiting subjectivity in their treatment, removing a significant obstacle to trade.
Digitalisation is also key in enabling developing countries and LDCs to meet their World Trade Organization (WTO) Trade Facilitation Agreement (TFA) commitments in full. For example, Article 7 on the release and clearance of goods requires the adoption of pre-arrival processing. Realistically, prior submission of necessary documentation is only possible digitally. The article also mandates electronic payment for customs duties, taxes, fees, and charges.
Similarly, Article 10 commits countries to accepting electronic documentation required for import, export, and transit formalities and the establishment of a single window, enabling traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single electronic platform to the relevant authorities or agencies.
When it comes to optimising supply chains, trade facilitation and digitalisation are inextricably linked. Digital processes mean more predictable trade, but their deployment is only possible when governments are committed to change.
Importance of Trust
In this regard, investment in infrastructure should be considered among the last pieces in the puzzle. Prior to implementation, there must be a trade-enabling regulatory environment and trust in infrastructure and protocols. A switch to e-certification entails electronic data transmission, involving intra-governmental co-operation and cooperation between public and private sectors for data collection and sharing.
The global nature of the supply chain makes it in everyone’s best interests for developing countries and least developed countries (LDCs) to embrace digital transformation. Access to robust data infrastructure and data management is vital in making this happen.
To optimise procedures, a viable digitalisation strategy must include data architecture that keeps pace with evolving internet functionalities: accessible, high-speed connectivity; transparency in what data is measuring and how it is being organised, managed, and communicated; and data security/privacy.
Security Contingency Planning
A recent survey conducted by Cisco found that only 15% of organisations have contingency planning for a security breach and many Global Alliance for Trade Facilitation (Alliance) projects have expressed fears over how their data will be managed as an obstacle to transitioning from paper-based processes. As more data and applications move to the Cloud, such security and privacy concerns will become even greater.
Alliance projects show the importance of public private sector engagement as a pre-requisite for successful digitalisation, building the necessary trust required in handling sometimes sensitive information. Greater cross-sectoral transparency provides solid foundations for optimal digital deployment. Alliance projects also demonstrate the importance of change management and ongoing engagement in ensuring the sustainability of digitalisation efforts after go-live.
- Stacy Diève, Strategic Trade Manager, Global Tax and Customs, Cisco Systems International