Global Trade Hits Home at MegaResistCap-Part II: A Little Knowledge Goes a Long Way

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When we left Jim, it was 7 pm, Sunday night. Jim, director of IT at MegaResistCap, had received a message from his CIO. The company’s legal counsel wanted to know if their systems were able to support the company operating as a “deemed exporter.” (See Part I of this series.)

Jim knew he needed to work his magic and offer a solution or at least a direction to management—that’s why they paid him the big bucks. He put himself on a schedule for the evening:

1) Research, 7–9 pm;
2) Proposed solution steps outline, 9–11 pm.

It was also part of his position to stay on top of the latest industry directions, but he had lost touch over the last year and a half during the ERP rollout.

Jim started googling “deemed exporter regulations.” The US BIS Web site was informative but like all government Web sites, it was filled with acronyms, regulations, subregulations, and references that led to other government agencies that Jim thought only existed in spy novels. The not-so-subtle references also pointed out that the fines assessed for single civil violation can result in a $250,000 (USD) civil fine or twice the amount of the transaction. Criminal violations carry a penalty of up to $1 million (USD) per violation and imprisonment for up to 20 years!

The clock was ticking. It well past 9 pm and Jim hadn’t started looking at software solutions, but he realized it was critical to do the background research before proceeding with any solution recommendations. He also reviewed the ERP implementation contract and realized that MegaResistCap’s ERP implementation didn’t include global trade management (GTM) software functionality. His ERP vendor did provide for some functionality such as Restricted Party Screening, Product Classification, and Export Docs, but this was an additional module that wasn’t included in the original purchase.

It was now 10 pm and time for another cup of coffee. Jim didn’t have specific solutions, but what he did know by now was that full compliance to BIS regulations required extensions of the ERP solution’s supply chain management (SCM) functionality to support GTM. He took a break and decided to turn on the Giants/Dodgers game—Tim Lincecum, the Giants starting pitcher, was getting blown out again so he went back to work glad that he hadn’t missed anything.

Now Jim started looking into GTM solutions. He ended up spending more than 2 hours reviewing the tier-1 ERPs, the company’s own ERP solution, and other marketing collateral on best-of-breed solutions. But, after all the work, he found himself lost in the best way to summarize the GTM market and solutions that could meet his company’s requirements.

Also, the company’s ERP selection occurred more than 2 years ago. Government regulations and the company’s needs had changed significantly since then. His head was spinning—it was 12:30 am, hundreds of links, and nothing but ads . . . Wait, what’s this, “TEC 2012 Supply Chain Management Buyer’s Guide,” with a special report on GTM. He spent about 15 minutes reading the guide and breathed a sigh of relief. He’s finally found a trusted source he could use to move ahead with the next steps in what would be another do-or-die project in the life of an IT manager.

Jim realized he needed to initiate a formal project with key business stakeholder involvement to move ahead successfully. He wasn’t sure that his view would be echoed by senior management, but at least he was comfortable with his reply to Mike.


From: Jim
Sent: Sunday, 1:18 AM
To: Mike
Subject: RE: FWD: Congrats, you are now deemed an exporter

Hi Mike,

Sorry to not get back to you sooner, but I wanted to make sure we are on the same page in our response to Legal. In short, the business and technical implications of meeting the US Bureau of Industry and Security regulations regarding “deemed exporters” go beyond the current capabilities of our ERP installation. To support these regulations, we will need advanced Global Trade Management (GTM) software capabilities. This is not to say that we can’t extend our current investment to support the requirements, but we need to review both short-term and long-term strategic needs in our supply chain including GTM before proceeding with system changes. 

On the technology side, we do have a number of options. Please open up the attached link for more background on these solutions:

I recommend we put together a corporate project that will be managed by our project management office (MegaPMO), including all the appropriate stakeholders from HR, Shipping/Receiving, Finance, Legal, and IT, that will decide on how best to proceed. Please get back to me with your recommendations.


Jim clicked “Send” and dreamed of the days when “you’ve got mail” was romantic . . .

This concludes Part II of our series. In the posts to follow, we’ll walk through the solution selection, implementation, and subsequent benefits of GTM to MegaResistCap.
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