7 Capabilities Your Software Vendor Should Offer to Support your Business Operations in China.

Transcription

1 7 Capabilities Your Software Vendor Should Offer to Support your Business Operations in China. China today represents a large market of opportunity for Process Manufacturers. Many North American companies either have already or are considering starting operations in China to serve this fast growing market. Process Manufacturers who make Chemicals, Pharmaceuticals, Food, Beverages, Steel and Natural Products have unique requirements including inventory handling, lot tracking, recipe management and manufacturing planning among others. Your IT Systems and Supplier should not only understand the specific needs of process manufacturers, but also provide comprehensive solutions for your business for today and tomorrow. You may first want to set up a distribution company before you are confident enough to invest in a full operation in China. Thus, you could buy financial and distribution applications as a start. When you are more familiar with the China market and as your business grows, you will want to produce your products locally in China and recruit more local staff. So you will need the manufacturing application to manage your recipes, control the shop floor, and get instant insight of your production cost. You will also need an HR application to automate your payroll calculation, track the attendance and do performance reviews. All these applications should be seamlessly integrated, even though they might be implemented at different stages. 1) Full Suite of Applications - Financials, Distribution, Manufacturing, HR/Payroll Financial Applications - PRC (People s Republic of China) Statutory Reporting - Budgeting and Consolidation - General Ledger - Accounts Receivable - China VAT invoice printing interface - Account Payable - Fixed Assets - Financial reporting and intelligence Distribution Applications - Sales Order Processing - Inventory Control

2 - Purchase Order Processing - Transportation Management Manufacturing - Process Manufacturing - Process Planning - Plant Maintenance Supply Chain Planning - Demand Planning - Inventory and Replenishment Planning - Advance Planning and Scheduling Customer Relationship Management - Sales - Marketing - Service - Partner Management - Contact Center Human Resources Management - HR and Payroll - Attendance Tracking - Employee Self Service 2) Security A top concern will be security control and stability of the software system. Easy information sharing after adopting a management software solution is a double-edged sword. You will have a standardized process, better data integrity and information transparency with a good information system, but you will also take the risk of exposing confidential information, such as product recipes, price lists etc. So, the software that you use must have the ability to define strict user security that restricts who can process invoices; who can make payments; who can have the

3 access to recipes/formulas as well as other information. The software should also have the ability to keep audit trails that will tell you who did what, when and why. The other facet of the security is the threat from outside of your company. Nowadays, more and more software supports a web based deployment. Companies not only need to rely on firewalls, a VPN to make sure only authorized users can access your network, but your data from your web-based applications needs to be securely encrypted, so you could mitigate the risking of exposing sensitive data to external parties Stability is as important as the security control. When you are doing journal posting, or typing a production order, if the client is disconnected you may lose your data and it will be difficult and time consuming to recover the data. The solution you choose must ensure data integrity in the event of system failure. 3) Language - Support of English and Chinese Character sets No matter where you are from, Chinese and English are the most commonly used business languages when you do business in China. The software package you want to use in China must support multiple languages including Chinese and English. First of all, the core software must support uni-code, which means different Character sets can be entered in one application and kept in one database. So your end users could enter Chinese characters in the Shanghai office, your sister companies in Tokyo and Bangkok can put in data in Japanese and Thai, and all the data will be maintained in one place and one database. So you could easily have global insight to all your business subsidiaries through a centralized data repository, while allowing each subsidiary to keep its local uniqueness. Secondly, the end user should be able to easily switch between different languages. For example, the accountant in China needs to input the AP voucher using the Chinese user interface and the customer service staff in US may want to place an order to the China subsidiary using the English interface. 4) Reporting Typically, there are 3 different kinds of reports that are needed for foreign invested companies in China. a). PRC (People s Republic of China) Statutory Reports this includes Balance Sheet, Income Statement, Cash Flow Statement, Collection Ledger, Sub Ledger, Journal, Bank/Cash Journal, etc. All these reports and forms must be in the exact layout and format that is mandated by the local government.

4 b). Internal Management Reports every company will have the need to analyze its business performance for its operation in China, for example, margin and cost analysis, inventory turn over and cash projection Your software vendor should be able to have a flexible reporting tool to have you personalize your internal reporting requirements, which could be traditional two-dimensional analysis tool or multi-dimensional tool porivding sophisticated business analytics. c). Reports for Head Office foreign invested companies in China not only needs to report to Chinese government periodically in order to comply with local regulations, but also need to report back to its headquarter overseas. Sometimes these reports need to be in a bi-lingual format, sometimes they may be a fixed format reports only in English. In order to produce such a report set, the software itself should support a flexible accounting structure which could accommodate both US and China requirements, for example the US Head Office has a standard chart of accounts and want to roll this out to the subsidiaries all around the world, but China requires that there must be a main account segment with 4 digits and fixed numbering scheme. So there must be a field or element in the software to map the China accounts to US accounts, otherwise you are not compliant to the rules of local Finance Bureau. With both US and China accounts mapped and maintained in one database, you can easily produce both local statutory reports and Head Office reports. When you evaluate software solutions for your China operation, you need to make sure there is functionality included in the standard solution which meets the government requirements, and the software itself can accommodate both US and China accounts structure. 5) Remote Operations (ability to run the system from the head office located in North America, Europe or Japan for example.) As companies expand internationally, centralized systems that enable secure remote operations become critical. The software should offer flexible deployment options including; a). Installation of the software centrally in US Head Office. The end users in China could securely log on to the servers located overseas to perform their daily operations. The hardware and software maintenance will be done at the Head Office location and the Head Office will have the greatest flexibility to control the user security, and analyze and report on the China subsidiary. b). Install the software locally in China. The users from Head Office could also log on to the software in China to enter data, do inquiry and analysis, and produce reports as needed. This option is best if you have limited or poor Wide Area Network availability.

5 Whether the software is maintained centrally in the Head Office or installed locally in China, the business software should be a purely web based application, so you don t need to install any program on end user s PC ( Zero Foot Print client). If you install a new module or do an upgrade on the server, all the new features will be available to the users in China immediately with the need to install software on the client. This will dramatically reduce your maintenance and support costs. 6) Local Product Support (English and Chinese) After your system goes live, there will be questions and issues from the end users in their daily operation. Usually it is not practical for them to call the US for support because of the time difference and language issue. You need to check the software suppliers support infrastructure in China. A local dedicated support team is a must, and they should be able to support your local end user and expatriate managers requests. There should be a sophisticated support procedure and software system in place to log the issue, track the status and report back to you in a timely manner. You will need to rely on your software supplier in China to make sure the software you are using is always legitimate. The local support team from your supplier should keep abreast of with the latest policies from Chinese government, for example, taxation changes, reporting changes and payroll and benefits policy adjustment. New versions/modules or patches to the current system should be developed by the local team of the software vendor and released to you for use in a timerly manner. 7) Local Services and Training Finding a qualified service team to work with you in China can sometimes be challenging. Apart from the basic attributes/qualification that each consultant needs to have regardless of their nationality, such as good working attitude, domain knowledge in your industry, the following items are equally important and should be at the top of list when you talk to your software supplier s service team: - Good communication skill in both English and Chinese, so that the training and implementation could be done in both Chinese and English. - Understand the standard software application both in English and Chinese - Understand the local government regulations, for example, Chart of Accounts structure, Statutory Reports and VAT interface, which will make sure your software system complies with the local government needs. - Understand your local business and your Head Office s requirements

6 Whether the software vendor has a solid local service team or not is a go-or-stop sign for you when you try to select a software package for your China operation. In some circumstances, some new operations set up in China may not have necessary facilities to conduct the training. You need to find out whether the software vendor in China has good training facilities, with a dedicated training room, projector, whiteboard, and PCs for hands-on exercises. In summary, the 7 capabilities your vendor should provide to enable your successful China business software deployment are: 1. Full Suite of Integrated Business Management Software 2. Data Security and Audit 3. Multiple Language Support 4. Flexible, Customisable Reporting 5. Support for Remote Operations 6. Local, Bi-lingual Support 7. Experienced Implementation Services and Training teams Ross Systems (Ross) is a global provider of enterprise software solutions and a division of CDC Software, which is the enterprise software unit of CDC Corporation (NASDAQ: CHINA). Ross is focused on process manufacturing and offers a one-stop business software solution for the China market. Recognized for its success providing enterprise applications to customers worldwide, CDC Software s Ross ERP (enterprise resource planning) application was named Best Process Manufacturing Software for China in 2005 by ERPWorld.Net and the Chinese Institute of Electronics (CIE). If you want to learn more about CDC Software and doing business in China please send an to the following address richardthomas@cdcsoftware.com or call us at