Figure 1: A Reflection of Three forms of Export Cargo Reporting in ACS
Lisa Soon, Yi-Ping Phoebe Chen, Alan Underwood
School of Information Systems
Queensland University of Technology
GPO Box 2434 Brisbane 4001 Australia
{l.soon, p.chen, a.underwood}@qut.edu.au
This research investigates how virtual communities take place over the web starting with the present limited usage of web technologies in the export trade arena. While computer-mediated interactions have benefited the export trade community, can technologies be more innovatively used to reap the fullest advantages? Using case study methodology, this research investigates how technologies are used and can be better exploited in the export trade arena. We have produced architecture of virtual export trade communities depicting the constructive elements contributing to effective and successful virtual communities. The research also explores and explains the impacts of underlying potential parameters influencing the virtual communities in export trade. The areas for analysis include the inherent social, cultural, political and economical factors. The results of the case study indicate that virtual export trade communities will benefit enormously when the government and traders operate virtually within an effective architecture realizing the benefits, pitfalls and influencing parameters.
Various previous researchers have examined the existence, causes, driving forces, and the nature of the virtual computing environment. To the authors’ knowledge however there is not any previous research investigating a virtual community consisting of government-and-traders’ dealings using computing technologies in the virtual export trade arena.
This research reports a case study [33, 13, 15] piloted in the Australian Customs Service (ACS) to explore how technologies have been used for the export trade community. ACS was selected for the pilot study because it is the imperative government controlling point for export trade in Australia. The evaluation of evidence postulates that virtual communications lead to some phenomenal benefits. Having realized the potential benefits, we propose some constructive usage of technologies to form a more rewarding virtual export trade community. Such advantages are the elimination of geographical and social barriers, trading borders are made transparent, cost-reduction of work process and documentation through the adoption of technologies, increase in productivity, efficiency, effectiveness and accuracy of electronic transactions, and the strategic use of information for decision making and planning for export trading.
The research focus in this paper is on the usage of web technologies in the export trade arena forming an integral virtual community over the web. The research results will therefore be a beneficial contribution to the targeted community of people including the government authorities (e.g. Australian Customs Office, Government Permit Issuing Authorities on restricted and controlled goods) overseeing export trade, and the people involved in the export trade (such as the organizations with goods to export, the freight forwarders, the shipping companies, the airline carriers, consolidators and the customs agents).
The structure of this paper is as follows. Section two first of all evaluates the definitions of virtuality associated with societies, communities, organizations and so on. Section three presents a short summary of the history and emergence of varying technologies in Australian export trade over the past decades. Using case study methodology, we also explore the content and context of electronic export cargo declaration as a real-life phenomenon. With findings in section three, section four presents the architecture of virtual community work for export traders. Section five further investigates the social, cultural, political and economical elements as influencing parameters within the virtual export trade communities. Section six takes a further step to evaluate the benefits and pitfalls to the virtual communities as a result of the use of two technologies. Section seven shows the main findings as a model of innovative export trading activities in virtual communities. In concluding, section eight reports the results of the case study and depicts possible future research directions.
With advanced technologies in the information age or knowledge economy, communication is through the means of emails, teleconferencing, video conferencing and other types of electronic devices. Such technologies have unknowingly constructed some self-organizing virtual distributed communities with networks of mobile and fixed people. Communications takes place without physical interactions. With the advent of the Internet, there are many more opportunities for humans to communicate without geographical, temporal or spatial constraints.
Various researchers unequivocally define a virtual community as one where people from distributed geographical areas meet to interact with the aid of digital technology for some purposes [32, 22, 25, 16, 7, 21, 6, 20, 19, 24]. In this research, the virtual export trade communities that we focus on contain sub-groups of freight forwarders, consolidators, customs agents, customs brokers, carriers, shipping companies, and airline companies. The virtual communities are distributed export traders over places interacting non-physically between the government and traders and amongst traders. We define the virtual export trade communities as those using technologies for export cargo reporting and even for more versatile uses of technologies in future.
ACS is a controlling point for import and export trade in Australia [1, 30]. For fact-finding with an intention to collect evidence, an empirical study was conducted in ACS.
The investigations concern what technologies and work processes have been put in place by the government and the export traders, and what events have been happening over the years. It is also to discover how export traders use technology and factors impacting on such virtual communities. In the empirical research, documentation in ACS is collected, a survey is carried out, and there are direct observations, participatory observations and interviews to provide evidence for postulations.
All Australian export traders have to declare any export cargo to ACS before the exportation. All goods to be exported out of Australia need an Export Clearance Number (ECN) from the ACS. Our research focuses on the relationship between the ACS and export traders. We will further evaluate how technologies impact the virtual export trade communities.
According to ACS officers, there are so far three cargo reporting methods. Before 1990, there was a paper-reporting method known as the Export Return Scheme (ERS). With ERS, export traders filled out forms for the ACS to process the application. Upon validating the furnished details and checking that the application fulfilled the export requirements, ACS then issued Export Clearance Numbers (ECNs). Traders applied for an ECN personally. Processing each paper document manually at ACS was however an arduous practice. In the beginning of the 90s, an electronic method evolved to supplement such reporting. This electronic reporting method using a traditional EDI (Electronic Data Interchange) network has reduced the paper work processes and sped up the processing ever since.
As shown in figure 1, we present three different stages of export cargo reporting to ACS; in the past, at present, and in future. The first box shows the use of a paper-based reporting system (ERS) in the past. The second box depicts the mixed mode of paper-based reporting and electronic reporting (uses the traditional EDI network with EXIT (EXport InTegration)) at present. The third box shows the same electronic reporting in the second box together with the Internet reporting method. ACS will conduct a trial run to test Internet reporting with the industries in April 2002. The paperwork system will be phased out in the future. To investigate further, we will examine the technical context and the practical content of the used technology.
Inevitably, export trade companies and individuals working anywhere, anytime using digital technologies are transforming toward the virtual society [19, 20, 24, 6]. We examine two types of technologies used in ACS with export traders. They are traditional EDI and web-EDI.
EDI is the exchange of documents in standardized electronic form [9, 23] between the ACS and export traders, directly from a trader's computer application to an application (EXIT) in ACS. As shown in figure 2, export traders have to subscribe to Tradegate for the use of their VAN (Value-Added Network) to connect through to ACS's VAN to perform electronic reporting. Besides the monthly subscription, the cost is also based on usage and time of the computer hardware and software. The costs borne upfront in the investment of EDI initially or in the short run is rather high for small businesses to do cargo declaration reporting.
Web-EDI makes use of Internet technology and is a beneficial form of electronic commerce [31, 18, 11]. Web-EDI needs to work with the basic traditional EDI technology through the use of Internet and the EDI network in order to reach a wider user community [26, 28]. Using on-line forms on a web site allows Internet user inputs to be mapped into an EDI translator and forwarded to the EDI-using ACS in a standardized format [29, 10]. In figure 3, we demonstrate each community of export traders connecting to the ACS application system through the use of the world wide web.
Figure 3: Internet reporting to ACS
ACS officers recognize the benefits of having Internet technology as an alternative cargo reporting method because the Internet is so popular nowadays. The existing users of the traditional EDI reporting method can keep the same reporting method. The new users can adopt the Internet reporting method. Internet reporting users must have an ABN (Australian Business Number), subscribe to the accredited Certification Authority and apply for an internal Customs Client ID number with ACS [5, 2, 3].
From the case study, we discovered that the virtual communities are however limited to using technologies for export cargo reporting purposes. We further investigated whether the virtual communities can form convergent meeting forums for sharing of ideas, beliefs and practice in order to unite people physically scattered with a sense of community and a common goal [22]. Finding the nature and content of virtual communities is the purpose of this research. We first of all develop a framework of virtual communities in the next section to begin our analysis. We will further analyze the influencing parameters, benefits and pitfalls existing in virtual export trading in sections five and six.
The fact-finding from the case study provides us with a picture of three essential components comprising government, technology and trading organizations in virtual export trade communities. We illustrate the architecture of the virtual export trade communities in Figure 4. The structure emphasizes the internal factors hidden in government, technologies and organizations contributing to any effective virtual community. In the case study, we discovered that technology enables communication and interactions amongst virtual members. The technical content covered in section three is represented by the dark shaded oval in figure 4.
The outer circle represents the virtual export trade communities. In the top inner oval, we demonstrate that the government must have full control over the trading activities. The government monitors through enforcing legal control, setting government policies in relevant government departments, implementing rules and policies in trading and evaluating trading environments in export trading. However, legal control, policies, implementation and evaluations are all subject to the changes and improvements as real-life situations change from time to time.
The middle shaded oval encompassing four smaller ovals depicts the employment of technologies in export cargo reporting. We emphasize employing technologies in trading for the traders and government to reap the profound positive advantages. Technologies evolve from time to time due to technological advancement. It is through beliefs of associated benefits that traders and government will trust and adopt any form of technology. Adoption however needs the education and training of traders and government staff to effectively use technology (ironing out techno-phobia). Such wise selective use of technology essentially forms a technological backbone in the virtual communities.
The bottom oval further explains the need factors in trading for the entire architecture to work holistically as a successful virtual community (albeit with virtual sub-communities). There should be political, technological, business, legal and procedural know-how in export trade and cargo reporting. The political know-how makes traders commit to cooperate with the government. The technological know-how allows traders to engage technologies for increased productivity. The business know-how facilitates viable business operations. The legal know-how ensures trading and reporting is done within legal domains. The procedural know-how irons out the nitty-gritty reporting errors (e.g. avoid penalty on fraudulent cargo reporting). The procedural know-how also prevents any unnecessary delay for declaration approval.
In addition to operating within architecture, there should be considerations over some influencing parameters as external factors. In figure 5, seven factors impacting on the virtual export trade communities are presented. They are government laws, environment, economy, political issues, social acceptance, enforcing technologies, and virtual culture.
In table 1, we further analyze parameters impacting on the virtual export trade.
| Influencing Parameters | Analysis |
| Government laws |
|
| Environment |
|
| Economy |
|
| Political issues |
|
| Social Acceptance |
|
| EnforcingTechnologies |
|
| Virtual Culture |
|
Table 1: Influencing Parameters over the Virtual Export Trade
On the whole, the performance of virtual communities is subject to influencing parameters as external factors just like that in any real communities. The hypothesis derived from the analysis is that virtual communities can operate successfully if members are aware of and monitor the influencing parameters impacting on the functionality of the communities.
In addition, our case study findings also posit that export traders and
government must also be aware of the benefits and pitfalls of the technologies.
Various previous researchers have confirmed the benefits of EDI and web-EDI. The upside of EDI in the long run is the increased efficiency, improved transaction accuracy, faster transfer of data, far fewer errors, less time wasted on exception-handling, more stream-lined business process, improved managerial control, reduced inventory levels/cost, faster cycle times, flexible response in producing orders, and the possibility for strategic repositioning of the firm [8, 14, 27, 9, 18]. The use of web-EDI is less costly as the Internet can provide lower network service charges, larger size of user group and have increased revenue, shorter cycle times, lower inventories and more timely, comprehensive information about users and business operations and more available network services [11, 17, 12, 4, 23]. Questions of advantages and disadvantages of using the two types of technologies were posed to the ACS employees. From such interview findings, we produce Table 2 to show the general attributes of the two inter-networking technologies and their associated benefits and pitfalls associated.
|
Technology
|
Attributes
|
Benefits
|
Pitfalls
|
|---|---|---|---|
| VAN EDI | Speed | Higher transfer rate of data for document processing. | |
| |
Cost | |
Higher investment / subscription / usage costs |
| |
Security | Absolutely secure in closed-end proprietary network | |
| |
Manpower | Less labour work | |
| |
Inventory | Reduction in amount/cost | |
| |
Transaction Accuracy | Much more accurate(Low error rate) | |
| |
Ease of Use | Moderately easy to learn | |
| |
Exception-handling | Less time spent | |
| |
Document Standards | Two standards are reached(UN/EDIFACT, ANSI X12) | Conform to a specific EDI standards |
| |
Managerial Control | Strategic use of information for decision making | |
| Web-EDI | Speed | High transfer rate | |
| |
Cost | Lower investment, subscription and usage cost | |
| |
Security | Secure with government Gatekeeper Public Key Infrastructure (using digital signature and certification authorities) | Users must have ABN, Customs Client ID, and adopt PKI. |
| |
Manpower | Minimal labour work | |
| |
Inventory | Great reduction level/cost | |
| |
Transaction Accuracy | Much more accurate | |
| |
Ease of Use | Easy to learn | Have to learn to use a new technology |
| |
Exception-handling | Much less time spent | |
| |
Document Standards | Agreement must be reached | Conform to a specific XML/EDI standard |
| |
Managerial Control | Strategic use of information for decision making | |
Table 2: Benefits and Pitfalls Analysis
The details in this table were developed based on facts collected from ACS officers. After analyzing table 2, there are more benefits than pitfalls discovered using the two inter-networking technologies to perform export cargo reporting. The results of this further analysis show that the computer-mediated business information exchange does have many more pros than cons. As such virtual export trade communities is strongly encouraged to explore variations of activities (e.g. email bulletin if not used yet) in the use of technologies for more rewarding communication and trading activities.
Should various forms of technology be used, there should also be costs and benefits analysis on them. Analysis helps the government and traders to weigh the pros and cons of using the technologies. They will then implement technologies definitely of great values and are contributive to the success of trading and communication.
Using the findings from the above analyses in sections 4,5 and 6, we illustrate the structure of innovative export trade activities in virtual communities in Figure 6.
In figure 6, the two ovals indicate that virtual communities adopt architecture and are subject to the seven influencing parameters we discussed in this paper. However, other than using technologies for cargo reporting (in the right box), virtual communities can use technologies for other trading activities (left box). Such activities make use of various forms of technology for information dissemination, better communication and electronic face-to-face interactions other than just fulfilling the reporting tasks. For example,
An emphasis should be placed on ongoing costs and benefits analysis to evaluate the benefits of forms of technologies used from time to time. By and large, virtual communities should operate within an effective architecture monitoring the influencing parameters and re-evaluating the benefits and pitfalls from time to time. The virtual export trade communities will therefore have their activity scope widened and enhanced, enjoying one-to-many or many-to-many other than the initial one-to-one interactions.
Having provided a bird-eye's view on the export cargo reporting in the Australian export arena, this paper investigates the technologies and practical activities taking place in the real-life situations. This research develops architecture of virtual communities. It also examines the potential parameters affecting the performance of the virtual communities of export traders. The investigation leads to a costs and benefits. The evaluation results, showing more strength than weakness of the virtual export trade activities, encourage better use of technologies for more valuable services to benefit the virtual communities.
The key findings are that various forms of technologies should be carefully evaluated and selected to accommodate social and export trading needs. The numerous pragmatic social and trading activities form the practical content of activities in the virtual communities. The benefits will proliferate as a result of making full use of the available technologies. The innovative use of technology will eventually reap a rich harvest over human communications, trading relationships, business profits, and creation of knowledge for business viability. Virtual community will therefore transform such benefits into business success.
In our research, there will be a new scope of work if the dissemination of information and communications expand to that between the exporters and their prospective vendors.