Chinese Organizations want to Harness their Business Information for Better Business Performance
When asked what are the most important drivers for improving overall business performance over the next two years, Chinese executives identify developing and launching new products and services, improving centralized management control, improving customer service and improving the productivity of core production processes.
When asked what specific information would make the biggest positive impact on business performance, executives most often identified improved insights into customer preferences, behaviors and profitability and improved insights into internal operations and production status as critical.
Today’s Enterprise Systems Strategies
Despite significant recent investment in IT capacity by many Chinese enterprises, many business functions are still not supported through enterprise applications. The biggest gaps exist in those systems that directly help with providing insight into market facing business performance: 67 percent of enterprises do not have any business intelligence or analytics capability and 50 percent do not have any data warehousing.
Where enterprise applications exist, custom software systems still dominate application portfolios. However, a majority of respondents in China whose organizations run packaged enterprise applications state that packaged software is more effective at supporting their current business requirements than custom applications would be and that packaged applications will be able to better support their organizations’ future business strategy across the majority of functional areas.
Value Opportunities
The most important benefits targeted by Chinese enterprises were increased management control of processes, increased process standardization and increased external and internal customer satisfaction. But 41 percent of surveyed organizations realized less than 40 percent of their targeted benefits.
The reason for the relatively low level of benefits achieved to date appears to be that many Chinese enterprises have implemented suboptimal enterprise applications strategies:
- Software and Process Integration: Only 51 percent of enterprises that have implemented enterprise applications have made substantial progress in software and process integration.
- Integration with Suppliers and Customers: Only 12 percent of enterprises that have implemented enterprise applications have established direct integration with their customers systems and only 14 percent with their suppliers systems.
- Process Optimization: Only 29 percent of enterprises that have implemented enterprise applications have invested significant resources into optimizing and redesigning the processes to take advantage of their new enterprise systems.
- Analytics: Less than 50 percent of enterprises that have implemented enterprise applications have a well-developed analytics or decision support functionality available for their users.
Future Plans of Chinese Enterprises
Future investment will be focused on new packaged applications and adding additional functionality to existing systems. Increasingly, leading-edge technology opportunities are also being investigated. Our research indicates that up to 10 percent of large enterprises in China already are implementing new SOA-based enterprise applications and are planning to subscribe to new software as a service (SaaS) offerings. The attraction of SaaS is likely to increase dramatically in the future as increased SaaS adoption will make good on the promise of rapid access to new application functionality, an increased ability to customize applications and enhanced data security.