| 4. In which ways is the initiative creative and innovative?
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Dubai Customs (DC) knew the importance of this key strategic initiative and prepared an end-to-end road map for the implementation. The initiative was logically divided into three main phases spanning over a period of three years from year 2009 to year 2011.
The first phase, also called discovery phase, started with thedemand outline and documented the problems and challenges of all the stakeholders. After the problem analysis, the team initiated the study of current situation analysis in 2009. This activity involved the gap analysis with respect to the recommendations from WCO, stakeholders’ requirements and the practices in place within the organization. A comprehensive study of the WCO Columbus Report was carried out that helped in the preparation of a gap analysis report. An elaborated set of business requirements specifications were formulated in the light of WCO Columbus Program Report recommendations and the gap analysis report that involved the details on the requirements for people, process and technology capability enhancement. DC used the Balanced Scorecard approach to identify the goals and objectives of this initiative.
While developing the strategy for this initiative, DC closely analyzed the strategies of the other government entities and Dubai Strategic Plan 2015. This helped DC ensuring that this system is horizontally aligned with the other government strategies and fulfills their security and risk management requirements. At the same time, the other government entities were engaged to obtain their requirements and expectations from the system. In order to ensure the vertical integration, the systems and practices related to Customs clearance within DC were also studied and documented to include in the scope of the initiative.
Before embarking upon building the system, a proof of concept was conducted by developing the stop gap solution to integrate with the Mirsal (DC customized Customs Declaration System) that helped a lot in identifying the key findings to fine tune the business requirements specifications. Also a detailed study was conducted to determine if the organization wanted to build the system in-house or procure from the market. It was decided to build the system in-house as no single vendor was able to deliver the functionality required by DC.
During the second phase, also called Design, Build & Test, the solution was completely designed and developed in-house with the help of professionals following mature internal methodologies including project management methodology, demand management methodology, enterprise architecture framework, change management methodology and quality control for development, design and testing to ensure a quality product. The training plans for the Risk Engine users were also prepared in collaboration with the HR Department. As part of the rollout of the solutions, a comprehensive change management campaign was designed and executed which involved series of user training sessions with the stakeholders who were impacted and ensuring that the message is loud and clear to adopt the new practices for better risk identification and mitigation. This exercise acted as the most important component for smooth transition of the new solution.
The third and the final phase, also called Rollout, involved the final rollout of the solution and deployment in the production environment and forming the support teams to help end-users from the intelligence and compliance business departments. The solution was finally handed over to the IT operations team and the intelligence business team after the stabilization period. In order to improve the system functionality, effectiveness and adoption, a feedback and improvement process was implemented that helped in continuous improvement of the system in line with industry best practices and guidelines. A snapshot of the implementation road map is also attached.
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| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
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This initiative had major impact the way Dubai Customs (DC) operated, employees worked and customers interacted with Dubai Customs. Stakeholders at all levels within and outside DC were engaged before, during and after the implementation of the Risk Engine by using DC Stakeholder Management Methodology. All stakeholders were involved through the annual and semi-annual customer surveys, quarterly brainstorming sessions, monthly focus groups and DC Consultative Council meetings. All the DC stakeholders were categorized into five broad categories.
The DC Internal Employees consisted of the Customs Intelligence, Post Clearance Audit, Inspection & Investigation, Valuation, Tariff and Origin, Customs Declaration Management and Legal & Intellectual Property Rights. The engagement of the representatives from all these business functions was required as the service delivery process was going to be impacted.
As DC is the part of a number of international organizations, it was important to engage those organizations to ensure that DC maintains its competitive advantage globally. Some of the most important international organizations included World Customs Organization (WCO), Regional Intelligence Liaison Office (RILO), Interpol and Other Regional and International Customs Organizations.
As this initiative was going to engage the local government agencies, it was important to engage them and discover their needs and requirements. Some of the most important local government entities included Federal Customs Authority, Dubai Police Department, Ministry of Environment, Chamber of Commerce, Dubai Municipality and Health Department.
The entire Risk Engine was developed to facilitate the trade movement for the business community. It was vital to engage the customers and find out more about their needs. Some of the customers included Shipping Agents, Courier Companies, Importers, Exporters and Brokers. As no organization can operate without collaboration and partnerships with other organizations, DC also engaged financial institutions, Smart Government, Dubai Trade and DP World for the implementation of this initiative.
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| 6. How was the strategy implemented and what resources were mobilized?
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Dubai Customs (DC) Risk Engine is the state of the art system which is conceived and implemented using the in-house capabilities and resources of DC with consultation from the World Customs Organization (WCO), other partner Customs organization and the Subject Matter Experts (SMEs). In 2009, when the project was initiated, the key resources includedDemand Analysts, PMO Analysts, SMEs, Business Architects and the Project Manager. At the same time the individuals from the core business areas were also engaged on need basis.
During the first quarter of 2009, as the business requirements were nearing finalization, a team consisting of Technology Architects, Systems Analysts, Application Developers and User Acceptance Testers were formed in order to do a stop-gap solution for proof of concept. In parallel, another team was set up involving the Demand Management group in order to embark upon the study to determine build vs. buy approach. As soon as the stop-gap solution for the proof of concept was declared successful and decision was made to build the Risk Engine in-house. The team of professionals was ramped up by involving members from technology and functional areas including Seibel, Java, Quality Assurance, Database Administrator, Network Administrator, IT Operations and HR (Training and Change Management) to develop the comprehensive quality solution on time and within budget.
In order to ensure that the team members were engaged effectively throughout the implementation of the initiative, the most qualified resources were identified. This was achieved by conducted resources’ competency assessment by the Assessment Center in HR Department. This helped the identification of the training needs of the business and technical users that were fulfilled in alignment with the initiative objectives and requirements.
Other than the human resources, DC also had to procure the hardware and software licenses. As DC already had a mature infrastructure no major investments were required for the back-up and business continuity. However, dedicated and powerful servers were procured after the capacity analysis conducted by the capacity management team. The powerful systems were required due to the expected growth in trade. It was expected that average number customs declarations will exceed 5 million per year by the end of 2013.
In summary, DC adopted Just-in-Time technique as the teams and members were ramped-up and ramped- down as and when needed during the course of the project. Overall, 6 resources were involved in 2009, 19 in 2010 and 3 in 2011. DC heavily relied on internal resources and engaged only 4 external resources throughout the life of the project. For the software and licenses, approximately AED 2 million was invested and the hardware cost DC approximately AED 250,000. Overall, the initial cost of the project was in access of AED 6 million. The operational cost of running and maintaining the Risk Engine is approximately AED 1 million. As the system was built and maintained in-house, DC has realized the cost savings of approximately AED 3 million per year. The Return on Investment (ROI) was calculated at 3.1% with payback period of 2.9 years.
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| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
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The Risk Engine proved a great success not for Dubai Customs (DC) but also for the other stakeholders including customers and partners. The successful implementation of the Risk Engine also helped DC containing the illegal trade and goods movement. For example, there was 36% increase in seizures in last quarter of 2013 when compared to 2012. This was made possible only because the Risk Engine helped identifying the suspected shipments. The risky declarations were flagged by the Risk Engine and referred for inspection. Once the physical inspection of those declarations was performed the Customs inspectors were able to find banned, illegal or under-valued goods.
The Risk Profiles effectiveness was increased to 2.72% during the 3rd Quarter of 2013 as compared to 0.59% in 2012 that was resulted in narrowing down the work of Customs Officers to inspect 3.27% of total volume of declarations as opposed to 8% in 2010 i.e. the Customs Officers had to inspect 4.73% less declarations in 2013. As the Risk Engine uses the historical data to identify the risks, it will become more accurate as more data is captured.
The Risk Engine assesses the declarations in less than 1 second as compared to 2 to 3 hours assessing time per declaration as a manual assessment. The cost of clearing the declarations was reduced by 50% as the human intervention was only 3.27% which essentially means the savings of the human efforts, reduction in operational cost and optimized efforts and performance i.e. focus on risk mitigation rather than risk assessment.
The IT operational cost for maintaining the system was reduced by 65% where the full control of creating and managing the intelligence information based profiles were within the intelligence department and with lesser dependency on IT support. Also this resulted in making the IT team delivering other strategic initiatives.
As a result of the Risk Engine implementation the legitimate traders enjoyed clearance of their declarations within 10 minutes. This resulted in faster trade supply and lesser requirements of facilities such as inspection areas, warehouses to hold goods for an extended period of time. This also helped DC depriving illegitimate traders of AED 140 million during 2011 and 2012.
The customer satisfaction with DC services was increased by 7% in 2012 as compared to 2008 when very low customer satisfaction was reported. This was made possible because Risk Engine provided faster and safer services in declaration clearance.
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| 8. What were the most successful outputs and why was the initiative effective?
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Dubai Customs (DC) exercises industry standards and an aggressive quality assurance approach in order to ensure the quality products. The Project Management Office at DC mandated the methodologies to be followed and monitored the project progress, quality and cost.
In order to ensure that the project is aligned with the overall objectives of the organization and it progressed in the right direction, project Steering Committee was formed that used to meet once every month. The committee was headed by the Senior Executive Director and representatives from all areas of business and IT were the members of this committee. The Project Work Group supplemented the steering committee that used to meet on weekly basis. This group was represented by the team of Architects, Business & Systems Analysts, Quality Control, Change Management and Subject Matter Experts. All the issues identified during the workgroup meeting were discussed and shared with the Steering Committee. Most of the corrective actions used to be taken by the Steering Committee.
DC uses a state-of-the-art Project and Portfolio Management tool that was used to track the progress of the entire project. The tool helped DC in keeping track of the Key Performance Indicators (KPIs) including project scope, quality, effort, risks, timeline, issues, financial measures and customer satisfaction. Also, the tool helped keeping track of the resources availability, utilization and commitment. As the portfolio management system shows the activities and occupancy of resources throughout the organization, it was easy for the implementation team to make the resources available based on the project requirements. The real time performance dashboards were also available for the senior executives to monitor the progress of the Risk Engine including a risk register specific to the initiative. This helped the executives in taking action proactively in case the schedule is slipped beyond the threshold.
DC also has a stack of rigorous end-to-end lifecycle methodologies that ensure the efficiency and effectiveness of any project. In DC any project activity is started with the Demand Management function that is the interface between business and technology domains. DC also used, business processes engineering techniques to ensure that processes are documented, analyzed and improved. The Enterprise Architecture provides a foundation for any given project and demonstrates how different components of a project are aligned with the strategic objectives of the organization and if the benefits are realized at the end of the project.
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| 9. What were the main obstacles encountered and how were they overcome?
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When Dubai Customs (DC) took the lead and started analyzing the requirements from different stakeholders, the team discovered competing and diversified needs of different stakeholders. In order to cater to all the stakeholder requirements, DC adopted prioritization techniques to address their needs on the basis of urgency and impact. As the implementation of this initiative involved changing the way Dubai Customs (DC) operates and the way the employees work, the initiative encounter a number of obstacles internally and externally. These obstacles were addressed with the support of the leadership and the adoption of DC Change Management Methodology.
It was difficult to have a paradigm shift across the organizationas traditionally most of the seizures were the result of the physical Inspections. As a result of the implementation of the Risk Engine, the inspectors only had to perform targeted inspections flagged by the Risk Engine. This was encountered by encouraging participation from Customs Officers to contribute effectively on building knowledge of Risk Engine by sharing tacit knowledge. It was achieved by mandating effective contribution of Customs Inspectors in Risk Profile creating and linking the profile effectiveness to Employee Performance KPIs.
The cargo operations division put a constraint that the solution should provide flexibility to change the thresholds for risk levels. Also, the solution was required to allow inclusion, update and exclusion of risk profiles on the fly as well as real-time impact analysis. This issue was resolved by adding simulation capabilities to the solution that perfectly estimated the impact of changes to risk profiles.
At the technology front, it was difficult to integrate multiple technologies and processes. These issues were addressed by building interfaces with careful analysis and effective change management and training. Also, the qualified resources were acquired and existing resources were trained to bridge the skill gap.
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