Article 4: Port Community Systems and EDI in the future



Similar documents
ELECTRONIC INVOICE PRESENTMENT AND PAYMENT FOR THE OCEAN FREIGHT INDUSTRY

What you need to know when your customers and suppliers say it's time you started using EDI

Adoption, Approaches & Attitudes

Get Your Business Moving. In partnership with Nomis Connections

Beyond EDI: Leverage the cloud to improve electronic business transactions

The Advantages of Using ReadSoft DOCUMENTS For EDI

White Paper On Pilot Method Of ERP Implementation

IT Service Management

Lindiwe Mpindiwa Zimbabwe Revenue Authority Harare, Zimbabwe

SOFTWARE. CONSULTING. SOLUTIONS. Smart IT Solutions

Are you mixing with the wrong cloud? Building the right cloud strategy for your financial services organisation

Freight Transport Industry in India

Keeping your promises and deadlines

How to write a great CV

Perspectives on the knowledge-based society

Making the business case for C4RISK databasebased Operational Risk Management software

7 steps to choosing the right IT support company.

Magna IT EDI services. Supplier Implementation guideline for Electronic data interchange

Designing a point of purchase display (POP) that works for you

Shifting The Ticketing Paradigm

GAC International Moving Moving solutions for the Middle East, Indian Subcontinent and beyond

SOUTH EAST EUROPE TRANSNATIONAL CO-OPERATION PROGRAMME. Terms of reference

United Kingdom & Ireland

TOOLS FOR TEAM DEVELOPMENT: WHY VENDORS ARE FINALLY GETTING IT RIGHT

Transportation Management Systems Solutions:

BLENDSHORE A DYNAMIC AND FLEXIBLE OUTSOURCING STRATEGY

Moving to the Cloud? DIY VS. MANAGED HOSTING

GETTING IT RIGHT THE FIRST TIME

Enterprise Social Networks - The Seven Advantages

THE INTERNATIONAL MARITIME TRANSPORT & LOGISTICS CONFERENCE (MARLOG 2) SUSTAINABLE DEVELOPMENT OF SUEZ CANAL REGION MARCH 2013

On a mission to reduce traffic congestion for all

The Basics of Promoting and Marketing Online

Five Must-Know Steps for Freight Savings. Learn the five steps that the best consultants know and find your freight cost savings

#10. This paper was presented by Michael Behringer at JENC, the annual conference of TERENA (RARE), held in in May 1995 in Tel Aviv, Israel.

How To Use Fleetlink

Virtualization Changes Everything. WOC 2.0: The Era of Virtual WAN Optimization Controllers

Standard Bank. Case Study

HELPS PARTNERS GENERATE DEMAND IN THE NEW CLOUD ERA

Outsourcing. A Global Speech Networks Whitepaper

What s the REAL ROI of Video Conferencing? S. Ann Earon, Ph.D. President, Telemanagement Resources International Inc.

established expertise TT Club Forwarders Cargo insurance in three easy steps

Success Factors for Global Alignment and Targeting Platform. Pranav Lele

BPM: new architecture driven by Business Process Planning and Control (BPPC)

Table of contents. Performance testing in Agile environments. Deliver quality software in less time. Business white paper

The Advantages and Disadvantages of Electronic Data Interchange (EDI) For Railway Logistics

Is it time to audit your customs service provider?

KEY PERFORMANCE INDICATORS (KPIS): DEFINE AND ACT

Building a Business Case for Supply Chain Execution in the Cloud

Gaining Efficiencies Through LTL Outsourcing

Disaster recovery: Resilient cloud-based disaster recovery

Creating the Agile Supply Chain. Martin Christopher, Cranfield School of Management

Mexico Shipments Made Simple. Third-party logistics providers help streamline the U.S. Mexico cross-border process WHITE PAPER

THE ROI FROM SOFTWARE-AS-A- SERVICE (SAAS)

EDI-101 for those still contemplating an EDI initiative by: Bob Srdoch

EDI BROCHURE ELECTRONIC DATA INTERCHANGE WITH FORD. created by GSEC, Global Supplier Electronic Communications

Array Secure Mail Solution

Harness the power of data to drive marketing ROI

Measuring the Impact of Volunteering

Do not underestimate the value of your data think proactively about how you collect it, manage it and how you use it.

Advancing EDI: Leverage The Cloud to Improve Electronic Business Transactions

Sage One Accounts Extra

Global Transaction Banking Survey 2012

10 steps to the Cloud for SMBs Introduction to Cloud computing. Ask the Experts. Making Business Work Better Online

MARKET RESEARCH OVERVIEW

SUCCESS FACTORS IN SELECTING THE RIGHT TICKETING SYSTEM

The Case for a New CRM Solution

White Paper. Shipping and return as marketing tools for B2C e-commerce

GREEN IT: THE GLOBAL BENCHMARK

Quadrant Security Group White Paper

The State of Forklift Automation: Are We There Yet?

Critical success factors of effective security management: a survey of Vietnamese maritime transport service providers

Improving Ed-Tech Purchasing

Georgian Trade Exchange (GTX) December 21, 2011

12 Proven Principles for Process Improvement & Organizational Success

Singapore as the global wealth hub of the future?

State Street Global Markets: Fund Connect

EDI outsourcing: The evolution to B2B managed services

The Evolution of CDMA Mobile Device Testing

NASSCOM. Copyright 2014

Navigating the big data challenge

U.S. Small Business Administration Ron Johnson Interview with Paula Murphy. Ron Johnson: In Part III of our series, Where Will Your

Cloud Backup & Cloud Disaster Recovery

13. Project Management and the Australian Bureau of Statistics: Doing What Works

Why Do Software Selection Projects Fail?

Your complete guide to Cloud Computing

Project Management & Software Development Methodology

An Introduction to Unicorn

The partnership has also led to a joint library catalogue between Suffolk and Cambridgeshire.

6 Steps to Marketing. yourself as a contractor. a 6 step guide to marketing your services to agencies and end clients...

The CLM Platform from STAR

Customs Procedures and Functioning of Container Freight Stations and Ports

See what cloud can do for you.

HousingWorks ( Boston, MA

Prescriptive Analytics. A business guide

Moving Service Management to SaaS Key Challenges and How Nimsoft Service Desk Helps Address Them

PRINCE2 strengthens your projects governance

Lower costs, greater flexibility. Electronic Data Interchange (EDI): Optimisation of business processes through data exchange

THE GREAT IGNORED 43% 182 million. The premium path to purchase. Understanding the premium mindset. What this means for advertisers

Transcription:

Making EDI Work in India Stephen Vincent Page 1 of 7 Making EDI Work in India A series of articles by Stephen Vincent*, from the EU-India Maritime Transport Project. In the final article of this series, Stephen looks at opportunities to integrate together the different systems involved in implementing EDI, and actions needed now and in the future. *Note: This article has been written with financial assistance from the European Commission. The views expressed herein are those of the author and therefore in no way reflect the official opinion of the European Commission. Article 4: Port Community Systems and EDI in the future Looking to the future In the first three articles of this series I have covered the basic principles of EDI. Today, in my final article of this series, I am going to look at the potential for setting up an integrated port community system in India, and also the actions needed now and in the future for India to get increased benefits from the use if EDI. Adding value and improving efficiency First, I want to emphasise that in the first three articles of this series I have been able to present all of the main principles of implementing EDI without any mention of the need for an EDI service provider or a port community system. At my first meeting with the port community two years ago, the lack of a suitable EDI service provider was raised as one of the major obstacles in implementing EDI. It should now be clear that the basic elements of the container message scenario described in the previous articles are being implemented successfully without waiting for such a service provider. So, a port community system, and the EDI service provider that would provide it, is not an essential requirement for using EDI. A port community system is all about adding value and improving efficiency, making everything easier, faster, and more cost effective. There is no need to wait for an EDI service provider. But an EDI service provider could provide many benefits to the port community, and if properly set up could reduce costs and simplify EDI communications. An integrated approach the Port Community System In Europe, where Electronic Data Interchange (EDI) has been in use for over twenty years, a further stage of the evolution of EDI solutions has taken place with the

Making EDI Work in India Stephen Vincent Page 2 of 7 development of port community systems. Similar solutions have also evolved in other countries. The principle is quite simple. EDI involves exchanging messages between many different parties, sometimes sending the same message to several different organisations. These data exchanges may use different data formats and data transmission methods, all adding to the complexity of exchanging information. A port community system simplifies all of this. At first sight, the solution seems fairly obvious. Why not just have a single EDI service provider for the whole port community, as shown in the diagram. Each member of the port community then only has to sort out one interface, their own interface with the EDI service provider. The service provider then takes responsibility for forwarding each message to other members of the port community, as appropriate. Port Community System Port Authority Container Terminal(s) Container Freight Stations EDI Service Provider Customs Shipping Lines & Agents Banks Custom House Agents Solutions of this type have existed in Europe for years, why has this not happened in India? There has been lots of talk about this in India, many presentations and discussions about the benefits of this approach, even several years of localised pilot trials, but still nothing is operational yet. Customs have made some important steps in this direction, but Customs only covers part of the whole EDI picture, as has been illustrated in my previous articles. Shipping agents have to exchange information with many other parties, as well as Customs. One of the major obstacles to implementing a port community system in India is the cost of setting up and running such a system. Case studies in Europe and elsewhere talk of systems costing millions of dollars and taking two years or more to set up!

Making EDI Work in India Stephen Vincent Page 3 of 7 In Europe the savings in time and effort can easily justify such expenditure. Time is expensive in Europe, pay rates are sufficiently high that any significant saving in time and effort can be quantified and used to justify investment in such systems. In India, the situation is very different. Computer hardware costs just the same as in Europe, but pay rates are much lower. It doesn t cost much in India for a messenger to travel from Mumbai to JNPT at Nhava Sheva carrying paper forms or a diskette, and then to wait all day to collect other papers to take back. The potential savings in the cost of people s time are not nearly as significant as in Europe. There are other advantages which result from implementing a port community system apart from savings in labour costs, but these are more difficult to quantify. With the spectacular growth in container traffic currently taking place in India, everyone could be much better prepared to handle the rapidly increasing volume of associated communications. Service to customers can be improved with more efficient handling of shipments, and with more sophisticated EDI it will become easier to implement more advanced and integrated freight handling and logistics solutions in the future. Revenue models who pays for what? So, the key to implementing a port community system is to work out how everything will be paid for. In different international ports, different solutions have been found. In Europe, for instance at Felixstowe or Bremen, the port community save enough money by using the port community system that the members of the port community themselves have paid to develop and operate the system. Other major ports, for instance Singapore, see the port community system as essential to making the port competitive, hence the port authority has set up and run the system. In India, there needs to be some agreement on the revenue model that will apply before a port community system is set up. Will the government, or the ports, pay to set up and run the system, just as they already provide the physical infrastructure of most ports? Or should the system users, the port community, pay for the system, and if so on what basis should payments be made? Should there be an annual fee, based on the size of the organisation using the system, or should there be a transaction charge on every single data transmission? Without some clarity on what payments will be expected from members of the port community, and whether they will be prepared to pay, it is difficult to move forward. Commercial services development and competition Next, let s look at the potential for EDI service providers in India. One advantage of developing systems later than other countries is the opportunity to observe what had been done elsewhere and then to develop new solutions more appropriate for India. It is important to realise that solutions from other countries cannot simply be re-used without

Making EDI Work in India Stephen Vincent Page 4 of 7 modification in India, there are too many differences in procedures and responsibilities. There is no standard port community system solution. Existing port community systems in other countries are generally each centred around a particular port. Developing a system for Indian ports today, it would be more appropriate to look at all of the ports in India; the solutions needed at all ports are similar, and economies from developing a single system should reduce costs. It is well worth observing the Customs model of the ICEGATE system, with a single gateway interface on the Internet in Delhi for the whole country which then forwards messages to the relevant Custom House. This was described in my second article. The danger, though, is that a monopoly develops, and it becomes difficult to get proper competitive pricing of services for customers. I have been a little concerned since I have been in India that some potential service providers may seek to get approval at high levels to operate such a monopoly, in the hope that they can make good profits from a captive market. Hopefully, if this danger is understood it can be avoided. If such a monopoly is considered, the means of ensuring proper transparency in how costs and profits are determined must be acceptable to all members of the port community. Some possible models for organising and paying for a port community system are outlined in the table. Examples of models Advantages Disadvantages Port community system, paid - Straightforward to set up. - Costs difficult to control. for by government or ports. - Benefits without costs should - May not be designed from Port community system, set up by government but paid for by users. Port community system set up and run by system users. Free competition between several commercial service providers encourage widespread use. the user point of view. - Straightforward to set up. - Costs difficult to control. - May not be designed from the user point of view. - Difficult to ensure transparency in determining charges. - User resistance because of costs. - Designed by the users for the users. - Commercial pressure to get the system and pricing right. - Commercial enterprises may be prepared to provide initial investment against later returns. - Port community needs to get together and invest. - May take time to organise and set up. - Will take time to agree how it should be done. - Will only implement services which will make profits. - Will require regulation to ensure quality of service. There is certainly a great opportunity to set up a port community system in India, but great care is needed to ensure that it really will be to the benefit of all of the users of EDI. As soon as there is any talk of requiring everyone to use a particular system, there will be well justified concerns about over pricing and inadequate service. In an ideal situation,

Making EDI Work in India Stephen Vincent Page 5 of 7 port community members will have a choice, and making use of the port community system must have commercial benefits to every user of the system which outweigh using EDI without the assistance of the port community EDI service provider. Strategy, leadership, teamwork and maintaining standards Over the past three years, the EU-India Maritime Transport Project has been working to assist with the implementation of EDI in India. As I have mentioned before, the problems with implementing EDI are more in management and leadership than in the technicalities of how EDI works. The role of the EU project in the implementation of EDI, particularly over the past two years, has been mainly as a facilitator of progress; bringing people together to address problems more rapidly, organising meetings, and improving communication about what is happening. The EU project has also developed implementation guides for UN/EDIFACT messages, to assist in their implementation, and these will need to be maintained and updated in the future. The EU project will end this month, at the end of December 2003, and it is essential that the momentum is maintained, and coordination continues. I would like to make an appeal for all members of the port community to work together and take responsibility for maintaining progress rather than assuming that someone else will take care of things. From the support that the EU project has received, I know that all of the key players want EDI implemented, and I hope that they will support such activities as far as they can. I would also suggest that all possibilities must be considered when looking for solutions. When looking for expertise to discuss and implement EDI solutions, the private ports and container terminal operators may also be able to contribute constructive suggestions, with their extensive experience of port operations in other countries. When considering the membership of any committees or discussion groups, it is essential to include the best expertise available, wherever it comes from. Driving changes forward a customer focus I would make a suggestion that progress should be driven more directly by the customers for EDI. The EDI core working group at JNPT, with operational level representatives from the shipping agents (MANSA), the shipping lines (CSLA), the Custom House agents (BCHAA), Customs, JNPT, NSICT and the CFSs has proved an excellent forum for resolving issues and driving progress forward. In particular, suggestions for improvements have come from the port users, the shipping agents, shipping lines and Custom House agents. Bombay Chamber has also played a positive role in supporting activities and encouraging progress. An appropriate forum must continue to operate, and leadership is needed to ensure that progress does occur.

Making EDI Work in India Stephen Vincent Page 6 of 7 Next steps actions needed now and in the future I would like to conclude this article by summarising a number of the most important actions which need to be addressed to accelerate the implementation of EDI. Party/Topic Customs The port and container terminals Standards EDI service provider Port users Leadership Action needed 1. Complete implementation of the ICEGATE Internet gateway. 2. Review Customs procedures, together with the port community, to minimise paperwork and achieve the full benefits of EDI. 1. JNPT to implement software for CALIND, COPRAR and COARRI UN/EDIFACT messages as soon as possible. 2. Shipping agents to implement UN/EDIFACT interfaces with their inhouse systems. UN/EDIFACT standards and implementation guides need to be maintained and updated at national level for all ports. An objective assessment must be made of whether a port community system with an EDI service provider is needed in India, and if it is needed an appropriate organisational model and revenue model must be agreed. A single EDI users association or support group is needed to promote the full implementation and effective use of EDI in India. Appropriate leadership must be decided to ensure that progress continues and is coordinated effectively. EDI can work in India, let s make it happen! I hope that this series of articles has been useful. The key message is that there is absolutely no reason why India should not get the full benefits of EDI, just the same as many ports and countries in Europe, all that is required is a little determination, practical

Making EDI Work in India Stephen Vincent Page 7 of 7 insight and coordination. I hope that members of the port community will respond positively to this challenge! A few words of thanks I would like to express my thanks to all of the members of the port community who have assisted me and other members of the EU project team while we have been working in Mumbai. There are many people at JNPT, Customs, and in the port community members of MANSA, CSLA and BCHAA who have provided extensive support to our activities, without whom our work would not have been possible.