Are You Ready for China? China-Ready International-Compatible Enterprise Software Toa Charm General Manager, Asia/Pacific Kingdee International Software Group
Agenda Opportunities and Risks of Doing Business in China How Different are the Application Software Requirement in China from the Rest of the World? Three typical examples in China a typical Hong Kong company with HQs in HK and factories in China a typical Fortune 500 companies with A/P HQs in HK and operations in China a HK-listed Chinese Enterprise with hundreds of subsidiaries in China. Overview of Application Software Market in China Criteria in choosing the Right China-ready software Why Kingdee is Right for you?
Opportunities and Risks of Doing Business in China
Opportunities and Risks of Doing Business in China Many reasons to invest in China CEPA WTO the de-facto World Factory Inward direct investment: US$44bn (2001), US$51bn (2002), US$58bn (2003) GDP per head grows 8.6% per year from 1992 to 2002 Olympics Game in China World Expo in China a 5.5km racetrack will open in Shanghai in 2004. Formula One in China soon! The REALITY is most of the foreign investment in China are not making money More foreign firms will pile in, excited by the economic reforms triggered by membership of the WTO. Look for foreign direct investment to approach US$60 billion in 2003. But the WTO and CEPA reforms will not be fast. - The Economist Three major aspects to be cautious of when we are heading to the North. Business Practices Cultural Differences Choice of Application Software (main focus today) Lessons Learned: Those who are ready for China can make the most out of China. The question is what is Chinaready?
How Different Are the Application Software Requirement in China from the Rest of the World?
An Quote from Merial Asia Managing regulatory requirement change "We have to be careful that the financial software can cope with the regulatory requirement of different countries. The invoicing and printing in China, for example, is different, so you have to understand the local business and regulatory requirements. And if the company in China reports back to this region, there is a corporate requirement for consolidation. Very often, there is a tendency to forget the requirement of the top level." - James Sua, Senior IS Director, Merial Asia. (joined owned by Merck & Co and Aventis) - Source: MIS Asia - June 2003
Examples: Accounting and Finance Applications Software
Uniqueness of China-Ready Software e.g. Accounting and Financial Systems Not only Chinese Language or UI but Accounting s/w needs to be first certified by PRC gov t New Accounting systems 3 mths parallel run; approved by PRC gov t Invoicing Invoices from PRC gov t VAT invoices must be printed out from dedicated PRC systems Reporting Mthly bal sheet and income stmt Annual cash flow Chart of Account 1 st level COA must be conformed with PRC Fiscal year 12 mths in PRC; 13 mths in HK
The Approval Procedures of the Computerized Accounting System in China 1. Choose the government certified accounting software 4.The local finance bureau assign auditor to do onsite auditing 2.After system implementation, the manual and computer finance data must be kept for at least 3 consistent accounting period 3.Apply for the computerized accounting system certificates certificates 5.The certificates issued by the local finance bureau, and you are authorized to use computerized accounting system to take the place of manual accounting book
How about these applications? Are Yours China-Ready? Human Resources Inventory Manufacturing Distribution Workflow Customer Relationship Management Supply Chain Management More.
Cases study
Case #1 - A large Conglomerate SAP already deployed for Tier 1 holding company The initial investment and maintenance cost for the SAP ERP system is expensive There will be a lengthy time frame for the whole group companies deployment Opportunity and investment cost while waiting for system to go live
Case #1 - A large Conglomerate Employed Kingdee-SAP model to achieve Accelerated deployment Achieved 70% pre-built, 20% customization for group and 10% for individual company around business needs Predictable time frame, expenses and resource requirements Centralized and Manageable COA and Financial Information from Group companies
HQ EIS Audit control SAP R/3 SAP ECCS Group Control SAP BW Audit Control Branch Branch company company ERP ERP AP G/L Costing AR Branch company ERP AP G/L Costing AR PO Inventory Distribution PO Inventory Distribution Manufacturing Manufacturing
Case #2 - A Fortune 100 High-tech company In-house developed core application for the accounting, invoicing and logistics administration operations Align with the business expansion to China, the company currently has 10 offices totally in China Selected Kingdee K/3 to adopt a Chinese government certified accounting system However, in order to preserve the data integrity and a single input interface from user point of view, there is a business need for end-users to export the existing transactions information into Kingdee K/3 modules for reporting and local requirements
Case #3 - A local HK company HQ in HK and more than 10 operations offices in China Used to deploy local accounting package Lack of local support network in China and needs customization for Chinese government regulation Opportunity and investment cost while waiting for system to go live
We have helped these HK and Int l customers get their applications China ready.
More ( )
Overview of Application Software Market in China
Packaged Software Market in China 2002: 16.3 billion CAGR(2002-2007) : 25.8%
China-Made Software is Growing Rapidly 2005 Software Market in China CAG = 40% Total Size 25 Billion RMB where 15 Billion (i.e. 60% is made in China and only 40% is foreign software) 3.8 billion exporting to the world
Selection Criteria of China-Ready Software
Selection Criteria for China-Ready Software Get you run into business fast and safe Time to Market Right Functions and Features Chinese User Interface Support local regulatory and government requirement Support local business practices and requirement Conform with both China and International standards and regulations Seamlessly Integrate with your HQ systems Solutions Provider Provide support in all major cities Experience in both HK and PRC Possess international experience and management Get you connected with companies in China to expand your business opportunities Good relationship with China Government Highest ROI Rich and Right functionalities at reasonable price HR: Company and Personal Values Easy to find employees, consultants and accountants to have the product knowledge and skills IT and MIS Manager can gain PRC management experience
Why Kingdee is Right for you?
Kingdee s Market Leadership In 2001, Kingdee became No 1. ERP vendor in China with a market share of 15% - Computer World 2001 In 2002, Kingdee was No. 1 ERP vendor for SME in China with a market share of 19.3% - Computer World 2002 Ranked #6 Application Software Vendor in China over SAP IDG 2002 (only 3 local application software vendors are ranked within TOP TEN)
Key Milestones In 1996, released the first accounting software for Windows In 1993, Robert Xu established Kingdee In 1998, passed ISO9001 In 1998, IDG invested RMB 20 Million in Kingdee In 1999 Released Kingdee 2000 accounting software and K/3 ERP On February 15th 2001, listed on the GEM of SEHK 8133 Kingdee ranked no. 1 in ERP from the year of 2000 In Dec. 2001, Kingdee acquired Case, No. 1 ERP vendor in 1999 Passed CMM3 in 2002 & expect CMM4 in 2004 Acquired 6.7 acre land in Shanghai dedicated for outsourcing business in 2003 Set up Asia/Pacific HQ in Hong Kong
Financial Highlights Revenue 59.5% and Net Profit: 39.5% increased comparing with 2001
National Coverage Branches: 46 # of Staff: 2,400 # of R&D Centres: 3 # of Developers: 600 Partners: 600
Kingdee is Receiving Full Support from China and HKSAR Government : CEO: Mr Robert Xu ( ) : Mr Mike Rowse : Mrs Betty Fung : Mr Toa Charm
Our Mission - Kingdee Become NO. 1 enterprise application software provider in China in 2005 One of the TOP TEN application software providers in the world
Introduction to Kingdee Solutions Suite
KingDee EAS (Enterprise Application Suite) DRP Investment Management Capital Market Finance Management Value Management Strategic Management Portal ERP Financial Control Supply Market Collaborative Design Collaborative Supply Collaborative Planning SCM Purchase Accounting Manufacturing Quality Control Distribution CRM Sale Market Service Consumer Market Human Resources KM Collector Archives Management Search Engine Performance KM Knowledge Market CRM
Kingdee EAS Technology Infrastructure Business Intelligence Industries Plug-in Components EAS ERP DRP Global Security BusinessWork MessagePortal DB Engine Object Engine Rules Flow Engine Engine Engine Comp. Model Windows Org. Structure Mgt. Basic Data Mgt..NET Application Server CRM Database SQL ORACLE DB2 SYBASE DOMINO UNIX MS Windows Linux IBM AIX HP UX SUN Solaris BAPI WEBSERVICE IDE Config. Dev. platform IDE Test Tools Wireless API Offline API Report and Print Tools J2EE IBM OS400 KM Mainframe IBM OS390
Kingdee EAS Feature-Modularization Modularization Component based Re-structurable Scalability Logistics Mgf. F/A M/A HR KM CRM EIP
Kingdee EAS Feature-Integration DRP Group Control BI M/A KM ERP EIP CRM HR
ERP
The The Best Selling ERP ERP Software in in China 10 10 different different modules modules Sales, Sales, purchasing, purchasing, distribution,costing distribution,costing etc. etc. Product interface 3 3 different different modules modules BOM, BOM, Planning, Planning, Workshop Workshop management management,production,production Cost Cost Product interface Logistics packages Leading Total management solution provider Manufacturing packages 14 14 different modules Accounting Accounting Managerial Managerial accounting. accounting. Financial Financial Analysis Analysis Financial packages Product interface
Kingdee K/3 K/3 ERP ERP Technology Framework Customer Tier Application Logic Tier Data Tier Browser Browser Rich Rich Customer Customer Swithin Swithin Device Device Fire Wall WebServer WebServer Asp Asp Jsp Jsp Message Message Server Server Data Data Exchange Exchange Server Server Application Application Server Server Language Language Package Package Data Access and Save Data Access and Save RDBMS RDBMS EMAIL EMAIL Service Service Directory Directory Service Service Internet (TCP/IP, HTTP, HTML, XML)
Case Study: HK-China Application Kingdee K/3 installed in HK HQ and mainland branches separately, and do the data synchronization every day by Kingdee IM T S (internet message tran sfer system ) Server set up in Hong Kong F I R E w A L L IMTS Internet Database synchronization between HK HQ and mainland branches every day F I R E w A L L A full set of accounting system installed in about 200 local Chinese branches H ongkong Mainland China
CRM
CRM Application Feature Performance Scalability Dictionary Definition Business Self-Definition Flexibility Reliability Strong Authorization Control
KM
Knowledge Management Smart Flow OA Work flow Documentation Routine model Data Interface OA Knowledge Management Solution Collection Recycle DOC Center OA The first phase Begin The second phase Knowledge Center File and documentation Press file Enterprise operation file DOC Center Classification Reclassification security management Relative information KINGDEE E-Portal Clean up Release OA Knowledge release Mirror image management Knowledge share Knowledge discovery Enquiry
DRP
DRP Application Feature Trans-platform application; Powerful scalability; Strong interface available; Strong and flexible enquiry system.
BI and BPM
BI/BPM Features Marketing Metrics 35 30 25 20 15 Customer Satisfaction vs. Competition Company Oracle IBM Sybase Customer Satisfaction On Target Weekly Leads: Target: 480 426 Marketing Goals: 1. Measure Customer Satisfact. 2. Exceed Weekly Leads Target 3. Hit Market Share Goals 4. Keep Allocated Budget Competitor Channel BQD Gains Market Share HSE Product Launch in China disastrous Brio Revolutionizes BI Solutions Marketing News New Book by H. Christensen on Web Marketing 10 5 0 600 500 400 300 200 100 0 Q1 Q2 Q3 Q4 Suspects vs Leads Target and Actual Jan Feb Mar Apr May Jun Jul Aug Sept Actual Target Market Share: Target: Budget: Target: Choose Settings: Total Bookings Total Units By Geography By Division +11% +8% $349K $366K Customer Mix by Bookings Product Mix by Bookings New F1000 Installed Base F1000 Portal Report Enterprise Applications Decision Models: 40 Market Share by Vertical 450 Budget vs Actual Campaigns Competitive Analysis Survey Information Customer Analysis Budgeting 35 30 25 20 15 10 5 High Tech Finance Manufacturing 400 350 300 250 200 150 100 50 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Jan Feb Mar Apr May Jun Jul Aug Sep
If you want to get ready for China, please talk to us! Action Now! Fill in your questionaire and get a free gift from Kingdee Stop by our demo booth today Attend our demo days on Nov 25 or Dec 9 Talk to us in person Phone: (852)-21579390 Email: asiapac@kingdee.com 4. Find out more from our international web site: http://www.kingdee.com.hk/