Cross-border trade is a complex, multi-faceted process that is essential for the success of large and even medium sized enterprises. In order to balance and manage all the logistics, regulations and finances related to importing and exporting goods, companies employ Global Trade Management (GTM) solutions. These solutions help streamline and automate business processes, and enable businesses to determine the total cost of their trade activities. The trade management process helps increase productivity, allows real-time access to different supply chain components, and increases visibility across the entire organization.
The GTM software market is growing steadily, with a CAGR of 10.92 percent from 2013-2018. The market leader is currently SAP AG, which offers a software solution known as SAP GTS. The software helps control costs, reduce trade penalties and fines, and clear all inbound and outbound customs easily. It also automates and streamlines trade processes for improved international operations and compliance.
TechNavio analysts have compiled some factors affecting growth in the market.
Driver: Investment in Domestic Supply Chain
Increased investment in domestic supply chains by companies around the globe is driving the market for trade management solutions. The domestic supply chain coordinates business functions within an organization with a focus on integrating supply and demand management in the same country. In addition, it involves tracking and coordination the flow of components from the source to the final destination and helps to identify the appropriate freight costs of the domestic supply chain. According to a recent survey, 69 percent of organizations use trade management software to identify freight costs and understand the total costs involved in the domestic supply chain.
Challenge: High Cost of Implementation
As much as these systems are essential for managing anywhere-to-anywhere business transactions, one of the major challenges faced by enterprises in this market is the high cost of implementation. The price of trade management software includes the cost of licensing, system design and customization, implementation, training, maintenance, and upgrades. After purchasing the license for trade management software, enterprises need an expert to properly implement it. Additionally, integrating these applications with existing operational processes of the enterprise can be very challenging at times. Therefore, given the possibility of issues with the integration of the software with existing systems, organizations are not always willing to incur the high initial cost for the implementation of these applications.
Trend: Increasing Number of Mergers and Acquisitions
The GTM Software market is growing and changing, and much of this growth is thanks to mergers and acquisitions, specifically smaller companies being acquired by larger companies like Oracle, SAP and Amber Road. For instance, market leaders GT Nexus Inc. and TradeCard merged in January 2013. Another leader in the market, Amber Road Inc., acquired EasyCargo Systems, a provider of trade management solutions, in September 2013. In addition, Kewill Technologies acquired Four Soft Ltd., a major vendor in the GTM Software market, in October 2013.
For more insights, view our Global Trade Management Software Market 2014-2018 report.
