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Mar.7, 2016

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104 THE JOURNAL OF COMMERCE SUBJECT OF THE REPORT SPECIAL REPORT MARCH 7.2016 3PL REPORT: INNOVATIONS IN TECHNOLOGY SPECIAL REPORT SUPPLY CHAIN LINKS Jerry Peck IT'S SAFE TO say that most every- one has heard the word "cloud" used in connection with at least some aspect of supply chain tech- nology. But while most may have heard the term, it's also safe to say that many wouldn't be able to fully explain exactly what it is, how it works or, for bonus points, where the term "cloud computing " originated. If you find yourself in this group, don't feel bad because you're certainly not alone. A s for or ig i n s (a nd t h is required some digging), I found a most appropriate article entitled "Who coined the term 'Cloud Computing '?" (The Business Technology Forum, Oct. 31, 2011), which reported that the term "cloud" can be traced to the 1990s where it was generally used as a metaphor to describe the Inter- net. "Telecom networks were already referred to as the cloud (and) in engineering drawings, a cloud represented the network." With regard to "cloud com- puting," the article traces its beginnings to the same period, specifically a 1996 business plan co- written by NetCentric and Compaq Computer, which "not only exten- sively uses the phrase 'cloud computing,' but also describes in accurate terms many of the ideas sweeping the Internet today." Wik ipedia def ines cloud computing as "a kind of Internet- based computing where shared resources, data and information are provided to computers and other devices on-demand." In the business software community, this concept has been around for a while under the term "Software as a Solution," or SaaS. Under an SaaS model, the service provider not only hosts the software on its servers — thus eliminating the costs associated with purchasing the software and any additional hardware to run it — but they also manage software updates and maintenance. Think of it as a kind of car lease where the user gets the full use of the vehicle, plus scheduled maintenance, all for a monthly payment that is considerably lower than the initial purchase price of a car. This is essentially the model for cloud computing. I recently attended Oracle's "Modern Supply Chain Experi- ence 2016," in San Jose, California. From the opening keynote address to the closing remarks of this three-day event, the message was clear in that Oracle's transition to cloud computing has begun. I was especially anxious to hear if Global Trade Management would be mentioned, given it's a critical, yet often neglected, link in inter- national supply chains. I didn't need to wait long. As if reading my thoughts, the opening address included special recognition to GTM as being a critical component of supply chain optimization and how it was quickly gaining trac- tion with cloud implementations. This was important to hear for two reasons. First, corporate supply chain professionals also are being exposed to the impor - tance of incorporating trade compliance controls as part-and- parcel of the global supply chain blueprint, and could help socialize that requirement internally. Sec- ond, within the cloud model, the cost to acquire this control now becomes much more affordable. This could be a true game changer, considering I've wit- nessed many trade and customs departments get tossed around like hot potatoes, never attaining adequate executive sponsorship or budget. Forget about asking for additional head count, let alone the funds for a supporting system. Those observations appear to be supported within a recent KPMG report, "2015 Global Trade Ma nagement St udy," wh ich polled 450 trade professionals in 11 countries. With regard to sup- porting systems, the study found that approximately two-thirds of the respondents who weren't using a GTM system cited the lack of budget and/or executive support as primary obstacles. For defense-related compa- nies, a previous obstacle they faced in taking advantage of a cloud solu- tion was that SaaS hubs may be located around the globe, so stor- ing data on these servers would violate regulatory restrictions on exporting controlled data an docu- ments outside of the U.S. This past June, however, in recognition of the cost benefits associated with cloud computing, the U.S. depart- ments of Commerce and State published proposed, updated rules that would clear the path for these companies as well. It wasn't long ago that trade compliance managers who asked for GTM systems would be dis- missed as having their "heads in a cloud." How ironic that is today. It's exactly where you need to be. JOC Jerry Peck is a GTM systems integration and Trade & Customs specialist with Hitachi Consulting. Based in Dallas, he can be contacted at 469-400-5402 or at GTM IN THE CLOUD

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