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AStudyontheEISMarketofChineseSMEsLeiZhang',ZhanhongXin^,andJiantongCao^1PhDcandidate,TheEconomicsandManagementSchool,BeijmgUniversityofPostsandTelecommunications,No.
10RoadXitucheng,HaidianDistrict,Beijing,P.
R.
Chma.
zhang_lei23@163.
com2ViceDean,TheEconomicsandManagementSchool,BeijingUniversityofPostsandTelecommunications,xinzhanhong@263.
net3Instructor,TheEconomicsandManagementSchool,BeijingUniversityofPostsandTelecommunications,tony000@263.
netAbstract.
ThecurrentChineseEISmarketisfocusingonexploitingthepurchasepotentialoftheSMEs.
Onthebasisofrareresearchmadeinthisfield,thispaper,aimingatcapturinganobjectiveinvestigation,presentsthreeaspectstoillustratetheapplicationofEISinChineseSMEs'market.
First,severalmajorEISvendorsareintroduced,togetherwiththeirreputedEISproducts,andthecomparisonbetweenforeignvendorsanddomesticonesisalsomade.
Next,theinvestigationisaddressedfromtheconsumerside,portrayingtheprofileofSMEs.
Finally,thispaperareputforwardsuggestionsfortheEISvendorstodevelopapplicableEISfortheSMEs.
1IntroductionThegreatprogressonapplicationofenterpriseinformationsystems(EIS)hasturnedouttobeacrucialimpetusoneconomicdevelopmentinChina.
ThefunctionofEISmarketatpastwasmainlyservedontheneedsoflargeenterprises,banksystems,etc.
Therecentproblemisthatthesemarketshavebeengraduallyenteringthematuritystageofproductlifecycle,resultedinabudgetshiftoflargeenterprisesfromthepurchaseofITsoftwareintothespendingonupdateandmaintenance.
Therefore,themarketingofEISsetsemphasisintothefieldofsmallandmedium-sizedenterprises(SMEs).
ThispaperobjectivelyillustratesthesituationofEISmarketofChineseSMEsfrombothsupplyanddemandsides.
Pleaseusethefollowingformatwhencitingthischapter:Zhang,L.
,Xin,Z.
,Cao,J.
,2006,inInternationalFederationforInformationProcessing,Volume205,ResearchandPracticalIssuesofEnterpriseInformationSystems,eds.
Tjoa,A.
M.
,Xu,L.
,Chaudhry,S.
,(Boston:Springer),pp.
649-653.
650ResearchandPracticialIssuesofEnterpriseInformationSystems2SupplySide:MainstreamEISVendorsInChineseEISmarket,thetotalamountofsoftwarevendorsachievesmorethan8700,includingforeignvendorsandindigenousones,butmostofmarketshareisoccupiedbyafewinfluentialones[l].
ThoseeliteincisivelycapturethetrendofEISmarket,andpromotesuccessivelynewproductspertinentlyforSMEs.
Theleadingonesare,tolistafew,UFIDA,Kingdee,LangChao,Microsoft,Oracle,SAP,theformerthreeofwhichareallindigenousvendors,andthelatterthreearetheforeignones.
TheirreputedproductsspecialforSMEsarelistedintheTable1.
Table1.
TheMainstreamEISVendorsandTheirProductsforSMEs1CompaniesUFIDAKingdeeLangChaoMicrosoftOracleSAPSources:AllProductsU8BusinessApplicationSuiteKingdeeKISKingdeeK/3LangChaoERP/myOSExpressOfficeSmallBusinessEdition2003WindowsSmallBusinessServer2003OracleE-BusinessSuiteSpecialEditionSAPBusinessOnemySAPAll-in-OneofinformationKeyFeaturesIntegratesmodulesoffinancial,supplychain,manufacturing,BI/decisionsupport;ProvidescormectivitytoPDM,bar-coding,SMSsystemandmobileoffices.
Familymembers:MiniEdition,StandardEdition,ProfessionalEditionandAdministrationEdition;Integratesmodulesofpurchasing,sales,salary,report,inventory,accounting,logistics,andcontract.
ApplicabletoChineseenterprisesingrowingphases;Solutionsforfinancials,SCM,HR,CRM,KM,andmanufacturing;BasedonWindowsDistributedInternetApplication.
Sub-seriesofLangChaoERP/myGS;Covering:purchasing,storage,logistics,sales,accounting,manufacturing;SmoothlyupdatedtoLangChaoERP/myGSpSeries;Including5programs:Word2003,Excel2003,PowerPoint2003,Outlook2003withBusinessContactManager,Publisher2003;IntegratewithSharePointServices,enablingfilesharingandcollaboration.
StandardEditionincluding:Server2003,SharePointServices,ExchangeServer2003Technology,Outlook2003,SharedFaxService,RoutingandRemoteAccessService;PremiumEditionincluding:ISAServer2000Technology,SQLServer2000,FrontPage2003.
Includingmodules:Financials,Inventory,Purchasing,Order,DiscreteManufacturing,SalesandService,andE-BusinessIntelligence;FullyintegratedsolutionbuiltontheOracleDatabase.
Covering:Financials,Sales,Service,Manufacturing,Inventory,Purchase;Easilyintegratemodificationsintonewversions.
Aprepackaged,industry-specificversionofmySAPBusinessSuite,andadaptabilitytopowerftilsolutions;Fullyintegratedbusmessmanagementapplications;Supportfore-businessandcollaboration.
inthisTableiscitedfi-omthewebsiteofeachcompanyPrices200,000—500,000RMB3,000—200,000RMB100,000—400,000RMB30,000RMB1701—3822RMB5509—43,300RMB438,000—658,000RMB880,000RMB[2-7].
ResearchandPracticalIssuesofEnterpriseInformationSystems651AccordingtoSIC[1],theforeignsoftwareprovidersoccupymostsharesofsystemsoftwareandsupportsoftware,leavingsmallportionofsoftwaremarket,suchasfmancialssoftwareandanti-virussoftware,todomesticvendors.
Recently,whenSMEshasgainedconsiderableattention,thereareopportunitiesfordomesticEISvendorstowinoutfi-omthenewroundofcompetition.
ThefollowingscomparethestrengthandtheweaknessofbothdomesticEISvendorsandtheforeignones.
First,theframeworkofEISproductsissimilar,butthequalityisunknown.
Itisobviouslyshownintable1thateitherthedomesticEISproductsortheforeignonescoversimilarmodules.
Theclassificationofmodulesiseasytocopy,becauseitistheexotericachievementofmodemmanagementtheory.
However,whetherasystemcomfortableornotreliesonitsusagenotjustitsfi-amework.
Eventhoughtheproductswouldsuperficiallylookthesame,theirperformancemaydifferfaraway,forinstance,whetherthesystemrunsspeedyandstable.
Second,thepriceisrelativelylowforthedomesticones.
Chinaisworld-knownforitscheaplaborcost,whichinturndepressesthepriceofoutput.
Thiscanbeseenexplicitlyfi-omthepricecomparisonintable1.
ExceptfortheMicrosoftseries,theothertwoforeigncompanies'productsarenearlytwicepricedthanthetwolargestdomesticEISproviders.
ThepeculiaritiesofSMEsdeterminethattheywouldallocateasmallproportionofprofitstoEIS,butnotimpliesthattheywouldchoosethelow-pricedonesatcompensationoflow-quality.
Finally,eventhoughlackofexperience,thedomesticvendorstakeadvantageofconvenientcommunicationwithChineseSMEs.
Theforeignvendorshavelongyears'practice,while,thedomesticonesareoftenfi-eshmancomparedwiththeirlargerivals.
ThestrengthofindigenousEISvendorsliesinconvenientcommxmicationwithdomesticSMEs,whichplaysacrucialroleinfiguringouttheactualdemandsofSMEs,andleadstothedesignofsuitableEISforSMEs.
3DemandSide:ProfilesofSMEsAccordingtoZhang[8],theofficialcriteriasettingdownforSMEsareasthefollowings:theworkforceislowerthan2000,orthetotalsaleislessthan300millionsRMB,orthetotalassetvalueisbelow400millionsRMB;meanwhile,tobeamiddlesizedone,theworkforce,thetotalsaleandthetotalassetvalueofwhichmustreach300,3millionsRMB,and4millionsRMB,respectively;andtheremainaccountsforthesmallsizedenterprises.
OnthebasisofthesecriteriaofSMEs,thisreport[8]alsooffersthedistributionofSMEsbyareaandbyindustry:theSMEsarelocatedcentrallyintheeastlittoral,andthenumberofSMEstherereaches133932,while,thatnumberinthemiddleareais36548,andthewestareacovers23758.
ThelargestfiveareasareShanghai,Shandongprovince,Jiangsuprovince,Zhejiangprovince,andGuangdongprovince,whichtotallyaccountformorethanahalfnumberofthewholeSMEs;AmongthoseSMEs,themanufacturingindustrytakesupalargeproportionachieves179520.
652ResearchandPracticialIssuesofEnterpriseInformationSystemsEventhoughthereisanimmensepotentialintheEISmarketservingforChineseSMEs,thepeculiaritiesofChineseSMEslaysomehindranceonthedevelopmentofappropriateEIS.
Thefirstbarrieristhelackofapprovalfromthemanager,asmentionedbyCaiandDu[9].
ThesmallscaleofSMEsindicatesthatthecompany-classdecisionisalwaysmadebythetopmanagerhim/herself,whoareoftenthefounderofthecompany,andareawareofwhereeachdollargoes.
OnlyiftheycouldrecognizethebenefitsofemployingEIS,wouldtheyinvestinEISproducts.
Second,theSMEsareoftenheldbackbythecostandtimeittakestoimplementEIS.
Toimplementasystem,theremustbesomeassistantdeployment.
Firstisthebasicequipment,suchascomputersandservers,then,thecompanyshouldpurchasepropersoftware,andthelastbutcrucialoneisthepossessionofprofessionalstoutilizetheEIS.
OnlywhenacertainSMEsatisfiesthethreecriteriacoulditoperatethesystemeffectively,buttheproblemisthateachdeploymentappealsformoneyandtime,whichareoftenrestrictedbythescaleofSMEs.
ThelastobstacleishowtocustomizeforenormousSMEs.
TheformerEISmarketwasconcentratedonthelargecorporations,andtheEISprovidersoftensurveyedtheactualrequirementsanddesignedthesuitablesystemsaccordingtothebusinessprocessofthelargecustomer.
Usually,eachorderoflargecustomermayreachmillionsofdollars,whichcouldsufficientlycompensatethecustomizedservice.
However,thisisnotthecaseintheEISmarketofenormousSMEswithdiversefavors.
ThechallengecomesouttobetheexplorationofbalancebetweenprovidingfavorableEISandloweringcostsimultaneously.
4RequirementsforSuitableEISTheEISmarketofSMEsisstillworthytoexploit,andthevictoryexistsinconsistentqualityimprovementtogetherwithcontinuousproductinnovation.
TherearethreerequirementsonthedevelopmentofEIS.
FirstistostartfromhighpointbyadoptingICT.
Themainadvantagesupportingtheprogressisthemovementofinformationcommunicationtechnology(ICT).
AccordingtoPietandPetra[10],ICTis"seenasamodemcatalystforinnovation,"andtheypropose"theuseofanetworkofSMEs,industryorganizations,intermediarypartiesandknowledgeinstitutes,toachieveadoptionofnewinformationandcommunicationtechnologies.
"Initially,thedesignofEISwasreliedheavilyonIT,andthefunctionofEISwasmerelytoimproveefficiencyofthedailytaskslimitingwithinthecompany,whilethegrowingemploymentofCTenablesvariouschannelsforcommunicationintheoutsidetransactions.
Besides,spendingnosunkcostontheoutdatedEIS,theSMEscouldeasilyadoptthelatesttechnology,andtowinfromthehighstartingpoint.
Thesecondrequirementistofocusingoneachindustryinsteadofeachcompanybyunifyingindustrystandards.
ThehindrancefortheEISvendorstoprovidecustomizedEISisraisedbytheenormousquantityofSMEswithrelativelysmallscale.
AspointedoutbyKingdee[11],"TheapplicationofEISisnotsimplytotransformtheinformationelectronically,butmuchmoresignificantlyistopromoteResearchandPracticalIssuesofEnterpriseInformationSystems653thelevelofmanagement.
"ThetremendousquantityofSMEspreventstodevelopcustomizedEISforeachcompany,andthesmallscaleordinarilyimpliesinadequacyinbusinessprocess.
Therefore,thesolutionistofocusoneachindustryinsteadofeachcompany,bysettingunifiedindustrystandards,aimingattoreducetheinefficiencyandtoimprovethetransaction.
ThelastrequirementistoconstructsolidEISfoundationthroughinformationresourceplanning.
TheseparateEISdevelopedbeforelockstheinformationintosilos,andtheconsequenceistherepeatedimportingofsamedata,thefrequentdelayofinformationtransmission,andtheceaselessupdatingofsystems.
OnesettlementisproposedbyGao[12],thatisinformationresourceplanning(IRP),whichis"Aholisticinformationplanningwhichcoverstheoverallmanagementofinformation,fromcollecting,organizing,storing,transmitting,toutilizingofinformationgatheringfromdiversechannels.
"ThecoreofIRPistoconstructbasicstandardsofinformationresourcemanagement,includingtheholisticdataplanning,andexecuterigorouslythosestandardsinthedevelopmentofEIS.
5ConclusionThefieldofChineseSMEshasrecentlyattractingtheattentionfromEISvendors,whosuccessivelypromotepertinentproducts.
However,thewinnersmustbethosewhoattachimportancetoconsistentqualityimprovementandcontinuousproductinnovation.
References1.
StateInformationCenter(SIC),andChinaInformationIndustryAssociation(CIIA),edited,ChinaInformationAlmanac(ChinaInformationAlmanacPress,Beijing,2004),p.
29.
2.
ThewebsiteofUFIDAnhttp://www.
ufsoft.
com.
cn/.
3.
ThewebsiteofKingdeeDhttp://www.
kingdee.
com/index.
jsp.
4.
ThewebsiteofLangChaoDhttp://www.
langchao.
com.
en/.
5.
ThewebsiteofMicrosoftnhttp://www.
microsoft.
com/china/.
6.
ThewebsiteofOracleDhttp://www.
oracle.
com/global/cn/.
7.
ThewebsiteofSAPDhttp://www.
sapchina.
com/.
8.
J.
Zhang,etal.
,editors,TheReportofChinaSMEDevelopment(ChinaSocialandScientificDocumentsPublishingHouse,Beijing,2005),p.
3andpp.
33-38.
9.
G.
CaiandZ.
Du,TheCurrentSituationandStrategyofChineseSMEs'Informatization,ScienceandTechnologyManagementResearch8,1000-7695(2005).
10.
P.
BoekhoudtandP.
vanderStappen,TheASPectProjectCase:aModelforSMEAdoptionofICTInnovation,IntheProceedingsofthe6^^InternationalConferenceonElectronicCommerce(ACMPress,NewYork,2004).
11.
KingdeeSoftware(China)CompanyLtd,edited,TheIntegratedApplicationofERPSystem(TsinghuaUniversityPress,Beijing,2005),pp.
15-21.
12.
F.
Gao,InformationResourcePlanning(TsinghuaUniversityPress,Beijing,2002).

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