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Way forward to data ecosystem through Data Culture in Digital Transformation of SL Customs

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Scaling up customs digital transformation by embracing a data culture and building a data ecosystem:
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Each year World Customs Organization (WCO) and its member countries celebrate World Customs day on January 26, by paying attention to a timely theme.

Sri Lanka Customs we also celebrate this valuable event and this year with the participation of Prime Minister Mahinda Rajapaksa on an invitation of the Director-General of Customs (SLC) Rtd. Major General G. V. Ravipriya.

Role of Customs andchallenges posed

Customs administrations around the world are responsible for implementing a broad range of government policies in areas as diverse as revenue collection, trade and traveler compliance, protection of society including anti-terrorism, cultural heritage, intellectual property, collection of statistics and environmental protection.

Effective customs administrations are expected to ensure that duties and taxes are collected as prescribed by the legislation, and to do so in the most efficient way and in a manner that is as free as possible from corruption and political influence .

A common characteristic of Customs work is the high volume of transactions and the impossibility of checking all of them. Customs administrations, therefore, face the challenge of facilitating the movement of legitimate passengers and cargo by applying appropriate controls to detect Customs fraud and other offenses while keeping their paramount responsibility to ensure revenue collection and safeguard safety and security, to stimulate economic growth.

Way forward to data ecosystem through Data Culture in Digital Transformation of SL CustomsCustoms services, find themselves increasingly under pressure from national governments and international organizations to address these competing interests such as, a balance between facilitation and control within the framework of laws, regulations, and procedures which globally recognized.

Due to the C-19 pandemic situation faced by countries all over the world, most of the government entities such as customs, private sector organizations were almost limited their functions and services offered to the public without remedies.

However, Sri Lanka Customs (SLC) is proud to announce that she had provided her service, aligned with the government expectations, to provide essential needs such as food items, medicines, and pandemic reliefs without interruption of the trade flow.

Within the pandemic season, most of the consignments imported as emergency reliefs and Medicines and devices imports were given priority treatments /Fast Track facility for the legitimate regular importers who were having good track reports.

SLC achieves designated revenue target

On the other hand, SLC achieved their designated revenue target with a minimum workforce while adhering the health guideline issued by the authorities concerned to work at home.

Even though all the Customs staff helped to be a reality of this hard task, the secret behind this success was the adequate policies and procedures adopted to overcome this crisis under the patronage of visionary leadership. Certainly, the digital agenda must be dictated by the top political and bureaucratic leadership.

Also, it is necessary to emphasize knowledge development, customer-centricity, digital skills, digital security, Artificial Intelligence (AI) application, and e- government to intensify digitalization in the customs service.

Taking a queue from the political leadership, customs leadership also recognized the role of technology in improving operational efficiency and achieving organizational outcomes, including enhanced service delivery. Public service leadership must also convince the public service at large that the change to digital models of governance is the way forward if the public service is to keep abreast and stay relevant with the times.

Key principle

Risk management powered by automatization is the key principle used to concur this critical situation. An intelligence-led risk-based approach has been used for process re- engineering to facilitate legitimate trade while imposing the appropriate level of control measures to suppress organized fraudulent activities of unscrupulous traders.

Since 1993, some of the Sri Lanka Customs (SLC) functions were declared open as automated, such as CusDec processing in the Long room Via AsyCuda System, but not much applied for other functions such as cargo control and cargo examination, etc. But now we can proudly say that almost all functions were automated and the “Single Window” concept, engineered the Co- ordinated Border management (CBM) with other regulatory agencies.

Actually, SLC has been transforming into a Data-Driven Organization from the Data-Informed Organization which helps to uplift her performance indexes such as reduced clearance time, Trade Cost, and increased revenue.

“To meet its mission, a Customs administration must effectively integrate modern practices and processes with ICT driven Customs management systems”. (Luc De Wulf and Gerard McLinden, World Bank, 2005).

Based on observation, information technology, automation, and advanced techniques are important in the support of Customs procedures and operations in the current international trading environment. Various factors which force Customs administrations to take reforms is the advent of new technology, the serious risks posed by emerging threats such as radiation, unscrupulous criminals involved in the production of fake and counterfeit products and the global economic shocks, the piracy problem in the region as well as environmental issues related to climate change.

Digitalization processes

During the digitalization processes, it is imperative for Customs to benefit from strong political will and support for digital projects.

They can leverage new technologies and innovations to boost their digital transformation and streamline foreign trade logistics to improve competitiveness and bolster the countries ́ economic growth. The image of customs is currently undergoing a massive change.

More and more countries as well as Sri Lanka are digitalizing their customs systems, both processes, and procedures in equal measure. By shining the spotlight on the opportunities brought by digital transformation, the pandemic has put customs authorities and their response capacities to the test. The urgent need to clear the critical goods needed to respond to the health emergency while keeping regular trade flows moving forced authorities to transition to digital customs systems almost overnight.

Greater collaboration among stakeholders should be engendered to ensure rapid and effective solutions for citizen needs, using digital technology. Given rapid advancements in digital technology, department should invest in up skilling their leaders and employees in information and communication technology (ICT) skills if they want to see their Digital transformation agenda through. In the era of cloud computing, Big Data, artificial intelligence, and smartphones, Information and Communication Technology (ICT) is redefining the trading landscape and business processes of the public sector, as well as of Customs and other border agencies.

By focusing on Digitalization, the Customs community are aspired to further develop digital solutions and services, making life easier for the trading community, other border agencies, and Customs officers, and to further adopt enabling technologies, such as the use of big data, the Cloud among others, to help increase operational performance, and to facilitate the reinvention of the way of doing business.

As a result of hard work undergone by the dedicated staff of SLC –ICT Directorate, the subsystems of an automated system such as Import declaration processing system, Export declaration processing system which would allow customers to submit the data relevant for a declaration directly to customs authorities and calculate the duties with no additional effort.

The customs process itself is simplified at the same time. Further to that Risk management system, and Enforcement system, containerized cargo scanning process are also implemented in SLC properly. The optimization, automation, and digitization of customs and border processes are among the areas that new technologies address. These factors are the cornerstones of modernization and lay the groundwork for generating the high-quality data needed to implement robust and effective risk management systems. We can define digital transformation in customs as the integration of digital technology into all areas of the customs administration resulting in fundamental changes to how the department operates and how they deliver value to stakeholders.

Elevating profitability

Digital transformation might be around improving customer experience, reducing friction by operational agility, increasing productivity, or elevating profitability with the umbrellas of culture and leadership, workforce enablement and Digital technology integration. Regardless of the volume of the workload, actions require the alignment of the people, process, training, innovation and the technology .But the technology is not the enabler it’s a differentiator.

Way forward to data ecosystem through Data Culture in Digital Transformation of SL CustomsWhether using new or traditional technologies, the key to digital transformation is re-envisioning and driving change in how the department operates. That’s a management and people challenge, not just a technology one (Center for Digital Business and Capgemini Consulting).

There are four types of digital transformation, such as Process Transformation, Business Model Transformation, Domain Transformation and Cultural transformation. For the operational processes, by process digitalization, performance improvement and new features could be added.

In case of worker enablement, they can work anywhere anytime having broader and faster communication and knowledge sharing ability. Performance management could be easy by way of operational transparency and data driven decision making process. Other benefits of Digital transformation are, Drive data based insights, Encourage cross departmental collaboration, Level up agility and encourage innovation and Update skill sets and acquire knowledge.

The most frequently used digital transformation technologies are Mobile, Cloud computing, Internet of Things (IoT), Artificial Intelligence (AI) and Machine learning and also the Robotics, Augmented and virtual Reality.

AI and Big Data

AI and Big Data are the foundation for smart technologies and business analytics In order to understand the exiting picture of the Digital Transformation of the Customs

Administration, it is necessary to discuss the Digital Development Trend of the Customs Administration in the Post-Pandemic Era, The Optimized Future of Customs Digitalization, and The Challenges and Reflections on the Digital Transformation of Customs Administration. (Digital Transformation of Customs Administration — Driving Intelligence, which was jointly written by Zhou and other industry experts).

Terminologies For a better understanding of terminologies used in this topic, it is better to be conversant with the definitions of the same.

Data culture is the collective behaviors and beliefs of people who value data as a strategic asset, practice, and encourage the use of data to improve decision making. A data-informed culture collects data as and when they require it and usually present data as snapshots in time. A data- driven culture can be defined as the organization’s commitment to making decisions, solving problems, and creating plans based on data and analytics. It leads better decisions and accurate predictions rather than ad-hoc solutions. The organization is data-driven when they are actively collecting data in order to make better decisions. They rely on advanced analytics which can show trends, outliers and help to understand anticipating Needs, mitigating risk & fraud promptly.

A data ecosystem is a collection of infrastructure, analytics, and applications used to capture and analyze data.

Data ecosystems

Data ecosystems provide organizations with data that they rely on to understand their customers and to make better strategic, tactical and operational decisions. Actually they are interconnected sets of services in a single integrated experience having emerged across a range of industries, from financial services which are not limited to a single sector, indeed, many transcend multiple sectors.

Also, the term data ecosystem refers to the programming languages, packages, algorithms, cloud-computing services, and general infrastructure an organization uses to collect, store, analyze, and leverage data. Simply put, a data ecosystem is a platform that combines data from numerous providers and builds value through the usage of processed data.

A successful ecosystem balances two priorities such as Building economies of scale by attracting participants through lower barriers to entry while generating clear customer benefits and dependencies beyond the core product to establish high exit barriers over the long term and the second one is cultivating a collaboration network that motivates a large number of parties with similar interests (such as trading community and customs willing to minimize the clearance time ) to join forces and pursue similar objectives.

One of the key benefits of the ecosystem comes from the participation of multiple categories of players (such as traders, logistic providers, customs brokers, and customs).

Data analytics is the broad field of using data and tools to make business decisions. Data analysis, a subset of data analytics, refers to specific actions. Algorithms are the series of steps or rules to be followed to solve a problem Automation- Automation describes a wide range of technologies.

Thursday, January 20, 2022 – 01:00











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