Monday, July 12, 2004
In this posting, I'd like to address something that is seemingly a bit mundane: ERP in China.
Two articles in the current issue of the Communications of the ACM (CACM)
caught my eye. The first, titled "Why Western Vendors Don't Dominate China's ERP Market" is a good read. (See http://tinyurl.com/27w9d
.) After reading this article, it's safe to say that Bamboo Networks (especially with their .NET ERP solution, which is something even Microsoft doesn't have), Kingdee, UFSoft and a few other domestic ERP vendors don't have much to fear from the "globals" -- although SAP and Oracle collectively hold about 25% of the market, which isn't bad. Textbook blunders on the part of (mostly American) software vendors. To request a copy of this article click on http://tinyurl.com/28eat
The other article is titled, "ERP in China: One Package, Two Profiles." (See http://tinyurl.com/2r45p
.) According to this paper, more than 1,000 Chinese sites had an ERP system by the end of 2001, costing billions of dollars. Nearly 300 were on SAP. (The figures differ slightly from the above cited CACM
paper.) ERP sales in China are projected to triple in five years from a US$1 billion base in 2002. (Note: I'm not sure if the author meant through 2007 or 2009.) A good quote regarding partnering opportunities: "With China's accession to the World Trade Organization, many multinational enterprises are rushing to
establish operations in China and/or interact with Chinese business partners
." (My emphasis.) For those on this list attempting to attract foreign direct investment, read the part which says, "establish operations in China
The paper noted that although ERP projects in China rarely hit even ECO/ECN-adjusted delivery schedules, they rarely exceed the planned budget. (In contrast to the States where ERP is almost always late AND over budget. In the States, taking on an ERP project is akin to playing Russian Roulette.) The article goes on to mention eight differences between ERP projects in state-owned enterprises (SOEs) and private ventures. The findings demonstrate that when it comes to ERP projects, private ventures in China are very similar to private ventures in the States. SOEs act like, well, SOEs: Bureaucratic nightmares galore. To request a copy of this article click on http://tinyurl.com/2eve2
There is another good article in the July issue of CACM:
"Demystifying Integration," which includes a listing of and brief take on dozens of domain-independent and -dependent standards and specifications for application integration. Good stuff for a systems integrator. To request a copy of this article click on http://tinyurl.com/3ysvx
Tidbits on Enterprise Software
What does the CEO of a systems integrator dream about? How about being one of the first companies to partner with a BEA or Siebel? (When I thought about this, all choices seemed rather awful!!
Need some help finding the next BEA? Turn to the AlwaysOn Network 100. For perspective, see http://tinyurl.com/23p3u
. Last year's winners included several companies that IPO'd (including Salesforce.com, Opera), companies in line to IPO (including Google, RightNow) and several other hot companies. Frankly, their record so far is the best I've seen (albeit it's still a bit too early to draw any firm conclusions). For a listing of this year's winners (to be announced this upcoming week at Stanford -- Go Cardinal!), see http://tinyurl.com/25j9s
. If I had the time (which I don't), I'd go through this list with a fine-tooth comb. IMHO, it's better than the listing of presenters at Enterprise Outlook or DEMO ... although the DEMO companies are a lot more fun!!.
Another list worth reviewing is Forrester's selection of the best Web design firms. (See http://tinyurl.com/3bq5z
.) Critical Mass, AGENCY.COM and SBI.Razorfish take top honors. Everyone tends to look toward the top 500 systems integrators in the States for partnering opportunities. However, don't discount the elite among the U.S. Web design firms. Many compete in an extremely cost conscious environment where much less expensive Java programming from a partner in China could be a win-win for all three parties: The SI in China, the Web design firm in the States, and the U.S. client.