China: Information Management Trends - CIO Survey

Analyzing the gaps between Chinese enterprises and global high performers, Accenture then offers recommendations for enterprise applications. These demonstrate that business results can be optimized through better information, and that Chinese enterprises could achieve high performance by investing in integration, optimization and analytics.

Achieving and sustaining high performance has never been more important to Chinese enterprises. In most sectors of China’s economy, rapid growth and transformation are driving senior business and IT executives to focus on multiple fronts to propel their organizations toward industry leadership.

The executives surveyed in this research program particularly emphasized the need for better information to assist with steering their organizations towards optimal business results. Their challenge has become to optimize enterprise application strategies to drive higher performance.

Given the significant experience that exists around the world in thousands of major enterprise applications projects, there really should be no excuse for failed program. Worryingly, our research shows that more than 40 percent of recent enterprise application programs in China still do not deliver the targeted benefits due to a lack of integration and standardization, lack of process optimization, little use of analytics and overuse of customization. These mistakes are hampering the potential progress Chinese enterprises could be making in improving their operations and overall business performance.

The research report provide decision makers in domestic and multinational organizations operating in China with detailed points of view on:

• Today's enterprise systems strategies.

• The value opportunity for improved enterprise application strategy.

• Future plans of Chinese enterprises.

• Recommendations for a road map to high performance through enterprise applications.

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.

Chinese executives who participated in the Accenture research identified a requirement for larger, more proactive investments in business process optimization—and business process and IT integration—as the key lessons learned from recent enterprise application projects. Accenture’s research suggests a way for Chinese organizations to deliver optimal business results, including profitable growth—and gain the greatest value from their enterprise systems investments. Accenture has established a causal relationship between specific enterprise system strategies and improved business performance. This groundbreaking research revealed that high performers:

1. Recognize their enterprise systems are of strategic value to their organization’s performance.

2. Invest in integrating, optimizing and redesigning business processes, leveraging best practices built into the software.

3. Integrate inside the organization and with customers and suppliers.

4. Aggressively use information and analytics to improve decision making.

5. Extend the reach of their enterprise systems throughout their organization and across a range multiple functions, avoiding implementations for individual business units or functions.

6. Seek and measure tangible benefits from their enterprise systems programs.

7. Are more than twice as likely to take advantage of service-oriented architecture.

8. Use enterprise systems to develop competitive differentiation through distinctive capabilities.

9. Tailor systems selectively only where it provides a competitive advantage and standardize everywhere else.

10. Are more likely to implement industry-specific solutions.