WCO ICT Conference · Strategy Driven and Results Orientated 7 A comprehensive exercise to...

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E X P E R I E N C E | I N N O V A T I O N | D E L I V E R Y

WCO ICT Conference Developing IT Project Proposals

A Strategic Perspective

June 2016


Challenges Shaping Customs’ Context

2

INCREASING TRADE

VOLUMES

INCREASING

THREATS

TRADER

COMPLIANCE

SERVICE LEVELS

CAPACITY

BUILDING

REGULATORY /

LEGAL

CUSTOMS


Coordinated Processes

Embedded Security

Focused Resources

Innovative Technology

Knowledge Sharing and

Collaboration

Re-Architected Ports

Key Principles for Modernising Customs

3

CUSTOMS


E X P E R I E N C E | I N N O V A T I O N | D E L I V E R Y

4

Out of clutter, find simplicity.

From discord, find harmony.

In the middle of difficulty,

lies opportunity Albert Einstein


Realising the Value Proposition

5

Employ a comprehensive

methodology starting with a

diagnostic to establish a baseline

for business transformation.

This is followed by a progressive and

iterative process that involves:

1. Defining a future strategy;

2. The capacity to deliver; and,

3. Ensuring that innovation and

performance continuously

improves. CONTINUOUS IMPROVEMENT

Establish Baseline

Implement Programs & Initiatives

Build Delivery Vehicle


Strategy Driven and Results Orientated

6

SBS MODERNISATION LIFECYCLE

You cannot change what you don’t understand. Understanding a problem is the

first step to finding a solution…

Understand the context

Structured Approach

Rapid development and deployment methodology

Deliver stable, on the ground results.

DIAGNOSTIC

PILOT IMPLEMENT

STRATEGY & BLUEPRINT BUILD

SOLUTION DESIGN



7

A comprehensive exercise to establish the requisite data points that will inform and shape the future strategy,

innovations and programs

A structured framework toanalyse the domain of

Customs, Excise &Border Management

METHODOLOGY

Cloud-basedapplication to quicklymap capabilities and identify pain points

INNOVATIVE APP

A Compendium of world-class leading Customs& Excise practices and

modernisation principles

EXPERIENCE

PAIN POINTS

STRATEGY &PRIORITIES

QUICK WINS

BUSINESS SYSTEMS

CURRENTCAPABILITIES

TRANFORMATIONROADMAP

GAPS & OPPORTUNITIES

It provides answers to the following questions:

What is the organisation doing well (and not well)? Do the current structures support the future state?

What are the main pain points? How will success be measured?

What systems can be kept & which need to be replaced?

What are the key priorities and in what order should transformation initiatives be implemented?


Diagnostic Process

Insight into the state of

the agency versus the

outcomes it seeks

DIAGNOSTIQ Evaluate Analyse Report Improve

Evaluation and

mapping of the

Agency’s capabilities

Definition and quantification

of pertinent issues and

problems

A set of options to

address issues and

improve performance

A roadmap for

Modernization

Diagnostic provides:

• Context and Understanding

• Critical Strategic Direction

8

Cu 41

Customs 92.906

Ex 31

Excise 69.723

Ic 73

Customs & Excise ICT

180.95

Sw 92

Single Window 238.03

Dc 94

Customs Data Cube Analysis

[244]

Tf 44

Trade Facilitation

101.70


DiagnostIQ Customs Data Cube Analysis

9

DIQ Customs Data Cube Insights & Analysis

Establishing the DIQ Data Fact Base

Multi-dimension analysis

Correlation with additional data sources

Key Findings & insights for follow-up

Data Cube Analysis 3

Trade and port profiles

Heat Maps

Risk Management Perf.

Trader Analysis

Commodity Analysis

Profiles & Baseline Stats 2

Identify System landscape & Data Sources

Acquire, Profile, Assess Data Quality, Cleanse, Transform & Augment Data

Cleanse & Prepare 1

Fact Base Understanding the Agency’s performance baseline

Strategic Insights Supports key decision making and strategy development

Business Intelligence Key trends and findings relevant to the Agency across domains of risk, operations and systems

OUTPUTS

Tra

der


10

Provides a comprehensive data analysis of agency performance

TRADE PROFILE | PORT PROFILES | PROCESSING TURN AROUND TIMES| STAFF THROUGH PUT | INTERVENTIONS | INSPECTION YIELDS | INTEGRITY MEASURES

Benchmarks

Strategic insights and a fact base

Operational measures and KPI’s

Opportunities for improvement

Inform development

Capability Benchmark

Output from DiagnostIQ

Basic

Basic

Basic

Basic

Basic Basic

Advanced

Advanced

Advanced

Advanced

Advanced

Advanced

Leading Leading LeadingLeading

Leading

0%

25%

50%

75%

100%

Strategy

Management

Risk

Management

ICT Ops.Enforcement

Customs

Ops.Enforcement

Tax

Org Management

Basic Advanced Leading

SP

RE

AD

OF

CA

PA

BIL

ITY

RA

TIN

GS

IT & Automation – – – – – –

Risk Management – – – – –

Integrity Controls – – – – –

Key Performance

Indicators– – – – – –

Customs Control - – – – – –

Knowledge & Training – – – –

Key Issues /

Comments

§ Limited view of entities as measure of risk

§ Entity risk is not part of declaration risk scoring

§ Entity risk is very relevant in Customs, e.g., smuggling, “Ghost” Exports

§ Transit control system is basic and can be easily circumvented

§ Transit risk (-$$$) is typically very common in relevant benchmarks

§ Current system embodies “Gatekeeper” mentality is 100% paper based and 100% control based

§ Provides Customs a false sense of “control”

§ Paper based “controls”

§ Risk engine is simple rules based and “hit rate” volume is too high and yield is too low

§ Few analytical tools for assessment (e.g., valuation data base)

§ High potential to embody culture of collusive corruption (-$$$)

§ Inland clearance sites rely on few inspections.

§ Agent chooses inspector based on current paradigm

§ Land borders?

§ Paper based, dependent on broker processing even for no/low risk.

§ Customs specific knowledge is lacking.

§ Poor appreciation for the difference between Customs and tax audits.

§ Merging audit functions and systems needs to be done carefully.

Possible Solutions§ Analyses of

registration data for currency and accuracy against transactions history.

§ FurtherSegmentation of trader base to inform risk management.

§ Data Analyses required to estimate extent of problem.

§ Strengthen transit controls and inspections via transit system and risk engine?

§ Risk based or even random document checks

§ Review risk engine functionality and governance.

§ Begin establishment of Customs risk knowledge base.

§ Assembly line approach to desk processing

§ Everyone can make system changes not monitored/audited.

§ §

Entity Management

Cargo Management

Declaration Processing

Risk Assessment Inspections Release AuditCore Customs Process



11

Trader Management

Declaration Processing

Inspection Management

Risk Management

Risk Indicators:

Score: 68

Type: Counterfeit

Intervention: Tailboard & Sample

Solution Concepts

STRATEGYBusiness Processes & Procedures

PROCESS & POLICYFunctional Specifications

TECHNOLOGYCapability Requirements

PEOPLE

Resource Distribution across

Customs Process LifecycleSystems Designs

Systems ArchitectureRegistration Targeting

Cargo Control

Declare Assessment Inspect Audit

Multiple

Registrations

Paper Doc Checks

Paper Based

Registrations

Manual

Reporting

Data

Capture

Errors

System Work

Around

Manual Acquittal

of Manifests

Manual

KPI tracking

Paper-based audit

selection

Value-Adding Effort

Core Functions/Processes

Re

so

urc

e D

istr

ibu

tio

n

Filing Paper

Manual

workflow

A sound solution blueprint must include all components to ensure benefits are realised.

LEGISLATION



12

START MONTH 3 MONTH 6 MONTH 9 MONTH 12 MONTH 15 MONTH 18

INITIATIVE PRIORITISATION &

TIMELINE

ASSUMPTIONSUnderpinning project benefits, sequencing and dependencies

DEPENDENCIESInter-dependencies between activities that determine sequencies– to be monitored and managed

EFFORT ESTIMATEUnderpinning project benefits, sequencing and dependencies

3.5321.5

50

75

100

25

0.5 YRS1 2.5

External (70%)

Customs (30%)

Total (100%)

RESOURCE UTILISATION

PROGRAMME TIMELINEGannt Chart Visually see dependencies between activities to identify and manage the modernisation critical path

RESOURCE UTILISATIONAssigned teams, available capacity and utilisation for transformation activities

PROGRAMME COST MNGT.Estimate of initiative costing as input for budget management and control



13

Business

Operations

Business

Capabilities

IT

Applications

IT

Integration

Platform

KPIs for each part of the value chain

Data model

Business object map

Detailed process map and data flow

Business capabilities & data

Target application and integration architecture

Business value chain

Product developmentProduct development Marketing and salesMarketing and sales Policy issuancePolicy issuance Policy servicingPolicy servicing Claims managementClaims management1 2 3 4 5

§ Product development

§ Product analysis

§ Marketing/CRM

§ Channel management

§ Sales

• Information collection

and check

• Authorization/exception

management

• Quotation/negotiation

• Risk assessment,

coverage, underwriting,

pricing

• Policy issuance

• Group life and other

special products

(specific to life)

• Customer information

requests on existing

policies (e.g., call center,

Web)

• Changes in existing

policies (data and

conditions)

• Policy termination (by

customers and by

insurer)

• Collections and

payments

• Renewals (specific to

P&C)

• Notification and contact

• Segmentation and

assignment

• Investigation and loss

assessment

• Negotiation and settlement

• Litigation

• Recovery (specific to P&C)

• Coordination with external

legal counsel and other

experts

Support value chain

IT: IT architecture management; applications development and maintenance; infrastructure management, and data centers 6 IT: IT architecture management; applications development and maintenance; infrastructure management, and data centers IT: IT architecture management; applications development and maintenance; infrastructure management, and data centers 6

Basic support services: postage and logistics, facility management7 Basic support services: postage and logistics, facility managementBasic support services: postage and logistics, facility management7

8 Other support services

8.1

Investment management/asset management

Setup of mandateand allocation

Management of client assets

Settlement and

transaction administration

AccountingDefinition of client mandate

Asset-based reporting8.1

Investment management/asset management

Setup of mandateand allocation

Management of client assets

Settlement and


AccountingDefinition of client mandate

Asset-based reporting

Setup of mandateand allocationSetup of mandateand allocation

Management of client assetsManagement of client assets

Settlement and


Settlement and


AccountingAccountingDefinition of client mandateDefinition of client mandate

Asset-based reportingAsset-based reporting

Risk management

8.2 Risk measurement Risk reporting Risk managementRisk identification

Risk management

8.2 Risk measurementRisk measurement Risk reportingRisk reporting Risk managementRisk managementRisk identificationRisk identification

Others: CEO office; supply chain management; HR; communication; finance/controlling/accounting/treasury/tax8.3 Others: CEO office; supply chain management; HR; communication; finance/controlling/accounting/treasury/taxOthers: CEO office; supply chain management; HR; communication; finance/controlling/accounting/treasury/tax8.3

Organization x Value chain

Functional domain map

Application domain map



14

AEO

One Stop Border

SingleWindow

Track and Trace

Crowd Sourcing

Cloud Computing

Big Data

PROCESS PEOPLE

LEGAL TECHNOLOGY



15

PROCESS PEOPLE LEGAL TECHNOLOGY

STRATEGY


Strategy Checklist

16

Informed by facts and aligned with values

Clearly defined and unambiguous

Realistic

Understood at all levels

Inspire action

Implementable

Measurable

Sustainable


Sovereign Border Solution is a boutique consultancy that brings together real-world experience, progressive thinking and proprietary tools and methodologies to deliver tangible results for our clients.

Strategy & Advice

We serve as objective advisors to clients in both the public and private sectors, including Governments, private solution providers and system vendors and NGOs.

Knowledge & Expertise

Our staff brings deep domain

knowledge in the field of

Customs, Excise and Border

Control, combined with leading-

edge business management

and information technology

expertise.

Leading Tools & Methdologies

Together with our proprietary

tools and methodologies, we

deliver strategic analysis that

drives the optimization or

modernization of operations,

systems and procedures.

MANAGEMENT CONSULTING FOR CUSTOMS, EXCISE & BORDER MANAGEMENT

Ziyaad Butler Director: Business Strategy

Tel: +27 21 702 4554

[email protected]

www.sbordersolutions.com

mailto:[email protected]

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