Middle East businesses urged to integrate physical and financial supply chains

'Unless these companies move to dedicated online document transfer platforms, they will not only lose money but also find themselves part of a business community that refuses to shake off traditional ideas of doing business,' added Rifai.
Bolero Middle East & North Africa, is a joint venture between Eastern Networks, the Dubai-based IT solution developer and integrator, and Bolero International, the global company that provides secure electronic document transfer systems for global trade.

'A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. To stay competitive, enlightened companies have strived to achieve greater coordination and collaboration among supply chain partners in an approach called supply chain integration. Information technology and the Internet play a key role in furthering the goals of this integration,' said Rifai.

Two supply chains exist in virtually all forms of commerce - the physical supply chain and the financial supply chain. Financial products and information are used throughout the physical transaction process. Emerging financial products such as online trade financing and letters of credit are helping companies speed up the process and reduce the cost of facilitating international trade.

Traditionally, international trade has learnt to live with financial, logistic and time inadequacies, costing the business world hundreds of billions of dollars every year. According to a United Nations study, adoption of online document transfer procedures will save the international trading community an estimated $620 billion per year, over 10 per cent of the $6,000 billion value of world trade.

Leading the way in this relatively new area of empowering businesses to exchange trade documents electronically is Bolero.net, the only internationally recognized platform enabling secure electronic exchange of documents. Founded in 1998, Bolero.net is a global initiative to create a secure, open system to exchange trading documents electronically. A key benefit of Bolero.net is its codification of a standard legal framework, accepted by all trading parties, effective across 192 countries, since without a standard legal framework, attempts to make significant improvements in efficiency will achieve no purpose - as has been proven by competitors who have failed.

'Forward-looking global corporations whose operations span countries and continents have been quick to move to online systems when it comes to transferring trade documents, having suffered long enough logistically and financially. Importers, exporters, freight forwarders, port authorities, ship agents, customs agencies and financial institutions are increasingly adopting the online transfer routes and have gone on record to say that the days of paper documents are over,' said Rifai.

'Bolero.net is waiving out traditional inadequacies of international trade by elevating the world trade onto the Internet, through enabling documents and data to be exchanged online between all parties in the trade chain,' added Rifai. 'Bolero.net exceeds the comfort level that businesses currently have while conducting trade transactions by paper.

Businesses in the Middle East have been slow in reaping the benefits of electronic trade due to their reluctance to embrace emerging technologies like Bolero.net, which are rapidly changing from being an option to becoming essential in a world where speed and efficiency carry a high premium. On the international level, the online transfer of trade documents has become a byword, because it makes trade easier to execute, lowers transaction costs, reduces inventory cycles and cuts administrative charges.'

Bolero.net is not a payment system, but a platform for a shared, open system i.e. one that works on all computer systems, by which businesses can exchange legal trade documents and data via the Internet. It acts as a neutral party to ensure secure delivery and receipt of information and provides a legal structure that binds all parties. Bolero has created a legal framework which companies have to agree to before they can join. Once they are connected, all the necessary paperwork for an international trade deal can pass through the bolero.net system, which includes digital signatures, an authentication and non-repudiation mechanism which confirms who has sent and received certain documents during the transaction.

The bolero.net service includes a title registry, which allows the ownership of goods to be transferred online while maintaining a legal status. The title registry provides the electronic equivalent of a bill of lading, a certificate giving details of goods shipped, the ship on which the goods are consigned and the names of the consignor and consignee. Because bills of lading are documents of title conferring ownership to the buyer, they can be transferred to a bank for settlement of a letter of credit. The bolero.net platform enables this process to be done in one hour, compared to 10 days required in the offline world.

Barry Morse, CEO of bolero.net summed up the platform's mission when he said, 'Despite many efforts to change traditional ways, paper still rules international trade. The challenge before bolero was to remove that paper, so that we could create an environment that is more efficient and less fraught with security risks, and design a streamlined process where the goods can be delivered much quicker and the costs can be dramatically reduced for all players in the game.'

Businesses are looking to release the capital float that is tied up in inefficient international trade processes and, to succeed, they need to improve their financial logistics. This demands that they collaborate across supply chains internationally. The investment to develop the solution has already been made and early adopters have blazed the bolero.net trail.

The last word is best left to a report published by Gartner's Research & Advisory Services which has projected that bolero.net will become the major player in, and the most widely adopted secure transaction network for, electronic international trade by 2006.