Executive Briefings

Global Trade Management: Mitigate Supply Chain Risk with GTM Software

Analyst Insight: The global trade management software market is in constant flux, but the risk mitigation benefits provided by the vendors are unmistakable. Vendors offer solutions across logistics, compliance, and finance, and spending on GTM software remains one of the few bright spots with 53 percent of respondents from our recent survey stating they are going to increase spending on GTM.

As supply chains become more global and more complex, the need for software and services to help manage the process will continue to increase. Even when a supply chain is heavily outsourced, companies need to maintain control with a layer of visibility. GTM software can help manage the process and mitigate the risk that comes with managing multiple logistics partners, filing the correct documents, and making sure money is flowing through the system correctly. Global supply chains are typically longer than domestic supply chains, they have more third-party touch points, use more transportation modes, and have more documentation requirements. Each of these aspects introduces additional risk. In the end, it doesn't matter who carries the goods or files the paperwork, the brand owner is ultimately held responsible.

In a recent survey of 160 global trade professionals, we found that 53 percent of respondents cited they would be increasing their spending on global trade management software. Even taking into account the self-fulfilling aspects of asking global trade professionals about global trade spending, this level of enthusiasm is significant. Some of the main reasons cited for increasing spending included: improve coordination of GTM functions internally, meet government mandates, meet security requirements, protect the brand, and control various costs.

This is happening in an environment where overall spending on supply chain applications, and most enterprise applications in general, is decreasing. AMR Research projects that the overall market size for supply chain management will have decreased 4 percent to 8 percent by the end of 2009.

The Outlook

It looks promising for GTM software and services. While the GTM software landscape is in a state of constant evolution because of mergers and acquisitions, buyers are showing a growing confidence that current and emerging software solutions focused on integrating trading partners mitigates risk. And they're spending the money to prove it.

As supply chains become more global and more complex, the need for software and services to help manage the process will continue to increase. Even when a supply chain is heavily outsourced, companies need to maintain control with a layer of visibility. GTM software can help manage the process and mitigate the risk that comes with managing multiple logistics partners, filing the correct documents, and making sure money is flowing through the system correctly. Global supply chains are typically longer than domestic supply chains, they have more third-party touch points, use more transportation modes, and have more documentation requirements. Each of these aspects introduces additional risk. In the end, it doesn't matter who carries the goods or files the paperwork, the brand owner is ultimately held responsible.

In a recent survey of 160 global trade professionals, we found that 53 percent of respondents cited they would be increasing their spending on global trade management software. Even taking into account the self-fulfilling aspects of asking global trade professionals about global trade spending, this level of enthusiasm is significant. Some of the main reasons cited for increasing spending included: improve coordination of GTM functions internally, meet government mandates, meet security requirements, protect the brand, and control various costs.

This is happening in an environment where overall spending on supply chain applications, and most enterprise applications in general, is decreasing. AMR Research projects that the overall market size for supply chain management will have decreased 4 percent to 8 percent by the end of 2009.

The Outlook

It looks promising for GTM software and services. While the GTM software landscape is in a state of constant evolution because of mergers and acquisitions, buyers are showing a growing confidence that current and emerging software solutions focused on integrating trading partners mitigates risk. And they're spending the money to prove it.