Stand-alone trade-compliance market "disappears"

By Beth Enslow, vice president of enterprise research, Aberdeen Group -- Logistics Management, 11/1/2005

BOSTON—Just as global trade management reached the "Top 5" priority list for most shippers, the stand-alone trade-compliance and documentation software market has virtually disappeared. In the past year, JPMorgan Chase, TradeBeam, and UPS have acquired import/export software vendors. And with Management Dynamics' Oct. 24 announcement that it had bought NextLinx, that market received what may have been its final blow.

A recent Aberdeen study found that more than two-thirds of the 233 companies polled planned to enhance their trade-compliance technology. In fact, 30 percent said they have current, budgeted projects.

For these companies, the disappearance of the stand-alone market may be a positive development. Global trade leaders have found that trade-compliance software delivers much higher value as an integrated, automated part of procure-to-pay and order-to-cash processes, rather than a disconnected "functional island." Some companies, moreover, are saving millions of dollars by using trade-compliance solutions to help them incorporate free-trade agreements into product design, sourcing, and distribution decisions.

Trade-compliance technology can now be purchased from three distinct groups: (1) suite vendors; (2) financial services providers, led by JPMorgan Chase Vastera; and (3) logistics service providers, led by UPS. These vendors are now integrating trade-compliance software into broader portfolios that support cross-functional trade processes. The result should be more value from trade-compliance technology projects, as well as technology that's increasingly accessible to mid-market companies via on-demand options.