Pascale Bull, COO, Viadex
Know what you’re shipping, know the country, know the pitfalls
Technology creates a wonderful world of opportunity. It’s also a world fraught with risk, compliance complexities imposed by manufacturers and governments, volatile nations, currency differences, vendor restrictions, compatibility issues, and procurement challenges around consolidation. Global growth entails global risk. Business success depends on having one without the other.
For the UK head-quartered, globally dispersed business, realising the opportunities means navigating the risks. It can be a tough journey if you don’t have the multiplicity of in-house skills to bring to bear on smoothing the way. Ever heard of Murphy’s Law: “Anything that can go wrong will go wrong”? It’s an apt observation when it comes to getting the IT equipment to the place you need it to be, when you need it to be there.
A rapidly changing regulatory environment
There is a basic issue that a globally dispersed business needs to deal with when setting out to equip branch operations or datacentres in other countries. Buying in-country can lead to price disadvantage and long lead times and is administratively burdensome (adding to cost). On the other side of the coin confidently navigating the complexities of exporting from and importing to countries where a company has no detailed expertise relating to the procedures involved and the regulations to which it will have to pay heed is a risk.
It’s often the case that companies don’t even know precisely what it is they should know; lacking a comprehensive, up-to-date grasp of all that’s involved. ‘Up-to-date’ is an important consideration. At a detailed level, regulations and requirements have a habit of changing frequently, often without notice.
As an example, the lead-up to GDPR was discussed in the UK for over two years (adopted on 14 April 2016, GDPR became enforceable on 25 May 2018). That gives everyone a fair chance to prepare. Moving IT equipment around the world is not usually like that. Countries change their rules and duties often. Volatile countries change them even more often. Sometimes, with some changes, nobody informs anybody.
You have to be in the know to know. Practices such as pre paying taxes and providing documents before the goods arrive allow a pre-clearance process which expedites clearance or highlights any import paperwork anomalies quickly, reduces risk of pilferage, and eliminates storage costs. Even when you have the import-export scenario buttoned down you also have to consider the ins and outs of marine insurance; taking care of the unforeseen while your goods are in transit.
Global presence delivers local insight: 99 global projects per month
Viadex has been moving IT equipment around the world for nearly 20 years. There are few, if any markets where we don’t have both the expertise, and a well-developed network of contact – from local courier services to shipping agents – to perform efficient global IT supply chain projects. Our business is to confront and navigate risk for our clients every day, everywhere.
Over the last two years we have completed, on average, 99 global projects per month. We helped clients in six continents; 23 countries in Africa, 27 in Asia, 33 in Europe, 2 in Oceania, 2 in South America, and 3 in North America . We made sure that Murphy’s Law applied in none of these projects and where it looked as if it might, we forestalled it.
Making friends and influencing people
In the rare instances where we have not dealt within a certain country, we make it our business to find out how things work there and who and what we should know, to function effectively on our clients’ behalf; de-risking their global IT projects.
Through our network of hubs we have a local presence, on the ground international logistics experts, in South Africa, the UAE, the USA, Singapore, and the UK.
I mention all this because I want to offer here a summary of key risk areas any company needs to understand and be prepared for, and wanted to establish the credentials that Viadex have to be able to advise on the considerations that come into play in global IT supply chain activities; the activities you need to know about in order to smoothly and successfully equip overseas offices.
Getting it right from the start: Global IT project methodology
With every project we employ a repeatedly proven methodology to ensure that every detail is covered and foreseen. It’s a multi-layered process I’ll be revisiting in my forthcoming blog series around global IT projects but here are three core and pivotal de-risking processes:
- Categorising your goods
Import/export classification is among the principal risks; the start point for any project. “One consequence can be incorrect classifications is assigned to products”, states Thomson Reuters summary of ‘Import and Export Classification Risks”, “As a result a company may incorrectly use a free trade agreement, owe duty, or even experience civil/criminal liability to the country where their goods cross the border”.The article also points out that …”problems with ambiguity in product description, differing classifications among importing countries, and frequent changes in regulatory guidance in tariff codes are the largest classification challenges experienced by trade professionals globally”.IT equipment, and mobile phones (electronics, computers, telecommunications and ‘information security’ to name a few), are subject to strategic controls which affect any items that can be broadly categorised as ‘military and dual-use items’. Global regulation pertaining to such goods abounds; for example see The Wassener Arrangement. There are piles of such regulations to take into account.
- Analysing the Bill of Materials (BOM) to define permit & licence requirements
Viadex address these considerations through a comprehensive review of the BOM, with attention to technology containing encryption and wireless communication. If equipment falls under strategically controlled classifications, import and export licences and authorisations are then required. Such export licences may include Standard Individual Export Licences (SIELs), Open Individual Export Licences (OIELs), and Open General Export Licences (OGELs).
- Ensuring supply chain price and availability
In line with your objectives and operational/strategic priorities we review where best to buy the product. This process includes verifying availability to ensure timelines are adhered to, negotiating best prices based both on our global aggregate global buying power and your own consolidated purchases, resolving any currency implications and ensuring manufacturer compliance.
Passport to success
Whether your requirement is for strategic projects to consolidate supply on an ongoing basis, or one-off purchases purely of a ‘transactional’ nature, it’s essential to apply a consistently rigorous approach and painstaking attention to detail at every single step in every single country.
This is what Viadex offer; we take away the pain, and assume the risk on your behalf. If you do not have a registered entity to import or you have no feet on the ground, perhaps just datacentre presence, Viadex can act as importer of record. Payment flow is reviewed concurrently to ensure there are no conflicts due to exchange control.
What I’ve covered here provides just a flavour of the many disciplines we bring to bear, covering the infinite variety of things that can go wrong. Please get in touch if you want to find out how to reduce your global risk, optimise your investment in IT and focus on what you do best rather than taking a chance in unexplored territories. My email address is Pascale.Bull@viadex.com.