confidential – for internal distribution only background & business justification for building...

Confidential – For internal distribution only

Background & Business Justification for

building

International Trade Documentation Management

(ITDM) capabilities in Oracle


Agenda• ITDM Solutions

– Functional Scope– Need for a Software solution– Oracle - Current fit & Challenges– Strategy for adding these solutions

• Background of Products available in India– IVL– Chenab– Others

• Next steps, suggestions


Complexities of International Trade ManagementMany factors impact efficient trade—inventory, late shipments, transaction costs, supply chain breakdowns and duplications are just a few…

BrokerCommerceState Dept

Bank Domestic CarrierBank

Forwarder

Exporter

Domestic Carrier

Importer

Global Supply Chain

Customs

International Carrier

– Legacy systems– Very limited updates– Point solutions by country– Automate 40—50% of

transaction– No web capabilities– No central reporting– High maintenance costs– No interoperability standards– No integration efficiencies

– Manually intensive – Inconsistent border crossings– Excess safety stock– Poor cycle times– High international DSOs– Inability to leverage trade

programs– Multiple brokers/ freight

forwarders by country– Lack of trade skills– Lack of information– Overhead of financial shipping

documents to facilitate payment

– Rely on multiple brokers for compliance

– Insufficient in-house trade expertise

– Poor trade business processes– Inability to leverage trade

programs– Significant Customs delays– Regulatory updates late, if at all– High legal costs– Regulatory penalties– High percentage of discrepant

documents creating costs and delays

Information Technology Operations Compliance

5


What is International Trade Documentation Management?

Documentation and Controls that needs Documentation and Controls that needs to be tracked, monitored and complied by to be tracked, monitored and complied by an Organization as per various an Organization as per various International Trade, Taxation and Banking International Trade, Taxation and Banking Rules that can be Country, Regional and Rules that can be Country, Regional and International Trade Zone specific and also International Trade Zone specific and also generic in nature across the worldgeneric in nature across the world


Functional Scope of ITDMPOPO ASNASN GoodsGoods

ClearanceClearanceLiabilityLiability

A/CA/C PaymentPayment

QuoteQuote SOSO DeliveryDelivery BillingBilling CollectionCollection

LCLC

PackingPackingCreditCredit LCLC

DutyDutyPlanningPlanning

ClearingClearingInstructnsInstructns

Bill ofBill ofentryentry

DocsDocsnegotiationnegotiation

ContainerContainerTrackingTracking

DocumentnDocumentnSetSet

ImpImpLicenceLicence

DocumentnDocumentnSet PlanngSet Planng

EERRPP

II

TT

DD

EERRPP

MM


Details of RequirementsExports Documents for Exports Import Utilities

1) Enquiry Tracking. 2) Quotation Generation. 3) Order Confirmation. 4) Order Schedules tracking 5) Delivery (work) order 6) Pre-shipment Invoice. 7) Quality Inspection 8) Post-shipment Invoice. 9) Samples Tracking 10) Rejections & Replacements 11) Export ChargesTracking 12) Excise bond & BlockTransfer

13) Excise Invoice 14) Rebate tracking 15) Insurance credit tracking 16) Consignment Exports

Export Finance1) FIRC , ETX2) LC Management.3) LC Discounting4) Forward Cover5) Bill of exchange and Bank

Certificates6) Realization of Bill of

Exchange.7) EFC account management8) Packing Credit9) FDBP (Discounting)10) Agent Commission

Tracking.11) ECGC

1) Proforma Invoice 2) Order Confirmation 3) Delevery Instruction 4) Pre-shipment Invoice. 5) Pre-ship. Packing List. 6) Shipping Instruction. 7) SDF / GR Form. 8) Insurance certificate 9) Sample Invoice 10) Post-shipment Invoice. 11) Post-ship. Packing List. 12) Certificate of origin. 13) GSP. 14) Excise invoice 15) ARE1 16) Proof Of Exports 17) CT1 18) Bank Certificate. 19) Bill of Exchange. 20) Shipping Advice. 21) Bill of Exchange. 22) Letter to bank fornegotiation.

23) Declarations (Hazardous ,And export benefits)Exports Benefits

1) Advance Licence2) DEPB3) DFRC4) EPCG5) Drawback6) Deemed Exports Benefits

1) Indent 2) Enquiry to Vendor/Indentor. 3) Quotation Tracking. 4) Quotation Comparison 5) Purchase Order. 6) Application For LC 7) LC bank limits tracking 8) LC tracking 9) Shipping Advice 10) Acceptance of shipment 11) Clearing Instruction 12) Receipt (Bill of Entry)/Rejection

13) Insurance Inpection. 14) Custom Duty Tracking. 15) Benefit Licences utilisation. 16) Bond Warehouse. 17) Goods Transfer. 18) Invoice Tracking. 19) Payments to Suppliers. 20) Discrepancy in receipt ofconsignment and invoicereceived from supplier.

21) Consignment movements. 22) Import Charges (Freight,Insurance,Clearing, etc. )Tracking

23) High Seas Sale / Purchase 24) Ex Bond sale.

1. LC Check List

2. Order Activity Planner

3. Pending Work.

4. Alarm System.

5. Logistic Plan for Export

6. Track and Trace

7. Order wise Cost analysis

8. Scanned Documentstracking

9. All documents can beconverted in to microsoftword / PDFformats.Document control

10. Freight Master

11. Barcoding & Labelling

12. User management

13. Help

14. Easy Database Backup


Need for a Software Solution for ITDM

ITDM

The Statutory Angle:The Statutory Angle:- Easy Compliance Easy Compliance - Easy Audit Easy Audit - Linked to Transactions Linked to Transactions - Mandates by Statutes forMandates by Statutes for““soft filing” of docs thrusoft filing” of docs thruGatewaysGateways

The IT Angle:The IT Angle:- Online- approvals for docs Online- approvals for docs - Reduce Manual efforts Reduce Manual efforts - Integrated systems Integrated systems

The Supply chain Angle:The Supply chain Angle:- Documentation providesDocumentation provides

crucial links across SCcrucial links across SC- Transactional validationsTransactional validations- Logistics coordination Logistics coordination - End-to-end visibility End-to-end visibility

The Finance Angle:The Finance Angle:- SSC requirementsSSC requirements - Taxation impact Taxation impact - Risk Management Risk Management


Types of requirements• Documentation (Reports, Returns)

– Eg : Bill of Entry, Insurance Policy

• Transactional (extended processes)– Eg:Customs Duty calculation, Insurance claims mgmt

• Checklists (Information Mgmt)– Eg: Checklist for Insurance claims, Checklist for

Export Order


Current situation in Oracle (India)

PartnerPartnerSolutionSolution


Challenges around the current scenario• Challenges for Oracle

– Business Practices issues when quoting for a tender for ‘single vendor’ solution

– Integration challenges– At the mercy of the few niche players

• Challenges for customer– Increased TCO– Key irritant remains a gap in ERP solution– Forced to work with multiple vendors– Technology / version certifications for integration at

the time of upgrade


Justification for building ITDM capabilities in Oracle• Better Solution

– Increasing demand from customers for addressing the key gap

– Organizations are becoming global and the need for ITDM to be part of ERP is becoming common

– Can enhance our SCM, Logistics & Financials solution capabilities

• Sales Potential– Partner solution costs around USD45K* when Oracle does a

deal of USD100K…can help reduce Oracle TCO– Can be a priced product and provide additional revenue to

Oracle– Can help to go one-step above SAP since it is a key gap in

SAP too*Charged by Partners in India, product + implementation*Charged by Partners in India, product + implementation


Growth in Export & Import volumes projected in India• India moving towards capital

account convertibility which is expected to push imports & forex spending

• India's share in world exports from the current 0.82 per cent to nearly 2 per cent by 2010

• In the last three years, Exports have been growing in excess of 20 per cent

• Govt of India has introduced web based online system of filing import & export applications


Developments in International Trade Documentation Requirements• WTO is working on systematic rationalization of procedures

and documentation for international trade (UN ECE definition)– GATT Article VIII focuses on the need to minimize the incidence

and complexity of import/export formalities and to decrease and simplify import/export documentation requirements

– Members of a Customs Union (CU) to adopt same standards, including specifications, terminologies, and definitions, inspection, sampling, and test methods, for border clearance of agriculture and food products

– All forms and documentation requirements relating to import clearance should be uniform for all members of a CU

• International standardization can help define common terminologies & documentation requirements in ERP software, including building standard interfaces for report filing etc.,


Market potential for EXIM add-ons in India

• Additional revenue of atleast USD500K p.a (USD20K X 25 deals) in the first year

• On average 20% of all CMRL deals and 80% of all large CMRL deals have a requirement of EXIM add-ons

• Good potential to up-sell to existing customers (400+)


Strategy for building the ITDM capabilities

• Fresh Development• Acquire Partner product


Options for Acquisitions in India

• IVL India Pvt ltd (http://www.ivlind.com/)

• Chenab Information Technologies Pvt Ltd (http://www.chenab.com/)


Background of IVL India Pvt Ltd• Promoted by SEI Gmbh, Germany. The shares have been fully

acquired by Sunil Gupta, the current promoter/MD of IVL• Has two entities – IVL India Pvt Ltd & OptiBiz Technologies• Has offices in US as well• Heavy SAP shop – developed India Localisation for SAP and

other add-on solutions as well• Started engaging with Oracle in 2001, migrated the same SAP

add-on design of ITDM to Oracle Apps along with integration• Group Turnover is expected around USD 5-7 million (to be

confirmed)• Based in Trivandrum IT Park, Kerala, India • Have a customer base of about 120, including about 5

customers who have bought their Export-Import-Insurance add-ons for Oracle Ebusiness suite


Solutions available from IVL• SAP Products & Services

– Offshore Product Development & App Maintenance– Netweaver Services– ABAP Performance Tuning– Basis consulting– OptiVAT (Add-on for SAP for VAT reporting)– Proactivate (Add-on for SAP for Alerts)– Reward (Add-on for SAP for employee incentive mgmt)– Optitrade (Add-on for SAP for Export, Import & Insurance)– EF Manager (Add-on for SAP for Employee Provident Fund)– Optitest (Test Management services for SAP)

• Optitrade - Add-on for Oracle for Export,Import & Insurance


Background info about OptiTrade for Oracle

• Built on Oracle Technology, with look and feel like Oracle Apps R11i

• Integration with Oracle R11i (OCS was involved for providing inputs on integration)

• Components of OptiTrade– Export– Import– Insurance


Background info about Chenab Information Technologies Pvt Ltd• An ISO 9001:2000 company• Add-on solutions have been integrated to SAP, Oracle

11i and BAAN• Won awards from Central Govt for their R&D Centre• Based in Mumbai, India• Have offices in US and UK• Details of turnover not available, but expected to be

around USD5million• About 3 customers for the Export Management System

add-on for Oracle• Oracle ISV Partner


Solutions available from Chenab


Chenab’s Export Management System

• Built on Oracle DB & Oracle Apps Server• Integrated with Oracle Apps• Addresses Export & Import functionality


Comparison of IVL & Chenab

IVL ChenabOracle Technology enabled? Yes YesIntegration with Oracle Yes Yes# of Oracle Customers 5 3Look & feel like Oracle Apps Yes No

Functionality scope

Import, Export & Insurance

Import & Export

Cost (Product + Implementation) USD 50K USD 40K


Other Players in India

http://www.eximon.com/


Suggested Next Steps• Evaluate need for ITDM

– DEV Product Strategy (Lou)– APAC Product Strategy (Matt)

• Decision on Develop Vs Acquire• If decided on acquisition

– Short list products• IVL or Chenab should be seriously considered

– Evaluate technical & functional fit • Other teams that can support from India

– Customer Care– IDC, India Localisation teams