Four mistakes to avoid when building an E-Customs system

Key Risks Facing a Country Creating and Implementing New Customs IT Systems – Lessons from Poland

The EU is building a paperless customs system – the E-Customs. This is legally enshrined in the EU Customs Code. The path toward E-Customs lies through the development and implementation of a series of defined IT systems that are meant to take over a significant part of customs procedures, as well as through legal and organizational transformation that will enable the use of these systems.

Ukraine faces a serious challenge: to have its readiness for EU accession recognized, it needs both legal and organizational “synchronization” with the Customs Union countries and the implementation (and, naturally, development) of a number of IT systems that meet EU requirements. Poland addressed this comprehensive task somewhat earlier, so its experience may help Ukraine avoid critical mistakes. What lessons can be drawn from Poland’s experience?

At the outset, it is worth noting: in Poland, some risks were predicted in advance, some were identified at early stages, but most importantly, approaches were developed that allowed them to achieve the goal – to meet EU requirements.

Possible Mistake 1: “Let the IT Department Lead the Creation of E-Customs”

At the early stage of E-Customs development in Poland, the IT department was the driver of digitalization, and there was a temptation to entrust everything to IT specialists and give them the leading role in creating and implementing new systems.

However, it quickly became clear that an IT system only reflects (implements) processes, the “owners” of which are the respective business departments. Therefore, it is the business department (not IT) that will be the end user of this system. Consequently, it must define the requirements for the business processes that the IT system should support. Meanwhile, the IT department is responsible for the technical aspects of the project implementation, building the technical infrastructure, and maintaining agreed IT environment standards.

Since there is more than one such system, and all systems must interact both with each other and with EU countries’ systems, defined business architecture and IT architecture must be followed when designing and implementing them. This ensures the integrity of the E-Customs development process – allowing a holistic view, optimizing options, and enabling integration and compatibility of systems (e-services), which are crucial for the service-oriented architecture (SOA) on which European E-Customs is based.

Risks:
If the IT department takes the lead, systems may be created without adequate involvement of process owners and without proper coordination between processes/systems. This may result in poorly defined requirements or even a lack of functional requirements before procurement begins, causing delays, missing integration between systems, manual data transfers, fragmented authorization, and access issues. The result: dissatisfied users and poor acceptance of digitalized customs processes.

Best Practice:
Business departments must lead the design and implementation of IT systems, define system requirements, manage processes, and take responsibility for results.

Possible Mistake 2: “We Will Do Everything In-House”

Almost immediately, Poland opted for a model where IT system development was outsourced to external contractors as the only viable option, due to two main reasons: the complexity of the customs IT environment (many complex systems needed to be changed and developed) and the limited internal resources in Customs and the Ministry of Finance.

Advantages of external contractors: competent resources, experience in developing such systems, guaranteed delivery (through contractual mechanisms – penalties and sanctions for delays or poor quality), and transparency (international procurement procedures, compliance with general standards).

Risks:
There were isolated cases of in-house IT development, but only for small systems and in the past. Such systems often lacked proper documentation, were based on knowledge held by a few individuals, and faced problems with integration. When such key people left, it created major challenges for further development and maintenance. Such individuals often were reluctant to share knowledge, or refused to do so entirely.

Other risks include delays in system creation and implementation, potential lack of transparency, and non-compliance with required standards.

Best Practice:
General rule: development, implementation, and maintenance should be outsourced. The IT department’s role is quality management, methodology, technical standards, and support.

Possible Mistake 3: Lack of Centralized Management and Oversight

Strong and effective governance should minimize local initiatives and prevent duplication of system functions. Initiatives of individual units do not help but rather harm the E-Customs development process. The process must be as centralized and standardized as possible.

Risks:
As a result of “initiatives,” many IT solutions may be created for various processes (including auxiliary ones such as HR, procurement, resource management). These may duplicate centrally planned solutions, fail to meet requirements, or lack integration. This path is “expensive and inefficient.” Creating such systems is not “free” – the state pays for the working hours of the specialists involved.

Best Practice:
Focus on integration and compatibility of IT systems, data reuse, standardization, a single source of core data, a unified data model (data warehouse), a single access point, and unified authorization.

In Poland, purposeful integration was carried out, including:

• 1 trader register (instead of 4)

• 1 reference service and 1 HR/payroll system (instead of 16)

• 1 central authorization system (instead of multiple local ones)

• 1 risk analysis system (instead of separate risk analysis modules in various systems)

• 1 access point, a single communication portal, and 1 data warehouse.

Possible Mistake 4: “IT Systems Are for IT and Business Units, Not Leadership”

Effective governance is crucial. The E-Customs program is not just about IT systems, but also about organizational and legal transformation of Customs.

Risks:
One of E-Customs’ goals is to minimize the human factor – a major cause of corruption. Customs IT systems are a key tool for preventing corruption – but only if they are not themselves a source of corruption.

The head of the Customs Administration must bear responsibility for the overall result and transformation and must lead the E-Customs program. Building an effective governance system, headed by the Head of Customs, is essential.

Best Practice:
Define clear governance roles. The program must have a supervisory board/steering committee led by the Head of Customs, with representatives from the Ministry of Finance, Customs Service, and the E-Customs Program Council. A program coordinator, coordination team, project managers, and project groups (mostly based in competence centers) should be appointed.

For individual central projects (e.g., NCTS), the governance pyramid should include:

• Supervisory Board (with leadership from MoF and Customs)

• Customs project manager

• Project team (officials and experts directly involved).

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Summary

Poland’s 20+ years of E-Customs experience highlight the importance of:

• Effective governance: Establish a supervisory board for the E-Customs program led by the Head of Customs, with deputies responsible for specific program components.

• Clearly defined process owners: Relevant business departments define and control business requirements and ensure that developed services meet expectations.

• Role of IT: Responsible for technical standards, IT architecture, and infrastructure, providing a service function for process owners.

• Outsourcing as a development model: Ensures skilled resources, guaranteed delivery, procurement transparency, and compliance with standards.

• System integrity and data interaction: Follow defined IT architecture and data governance, with a unified data model and single data source.

Scope of Tasks

The scope of tasks for Ukraine is defined in the MASP-C (Multi-Annual Strategic Plan for Electronic Customs). Importantly, the plan also regulates system requirements and their interoperability with EU systems.

EU4PFM is preparing IT system specifications and is ready to continue supporting Ukraine in developing IT systems, providing consultations, expert support, trainings, and customs officer education.