Planning with a Long-term Perspective

Feature Article | November 30, 2005 by admin

Management needs change over time

Established in 2000, Beijing Ruiling Metallic Material Co., Ltd had only 5 to 6 employees in the early stages of its development. The company at that time specialized in go-between mercantile operations for building panels. According to Mr. Kang, “At that time, because staffing levels were low and business processes relatively simple, I was able to manage the company more easily and efficiently. As a result, our IT requirements were modest.” But with the gradual development of Beijing Ruiling Metallic Material Co., Ltd, the scope of business has broadened and staffing levels have increased. This has thrown up a wealth of challenges and difficulties for managing the company efficiently.
At the beginning of May 2001, Ruiling Metallic set up several factories in Beijing, and has gradually established other key processing workshops and sales agencies all over the country. Its main business over that time has shifted away from trade to manufacture. It no longer relies solely on sales, but also covers design, production, technical service and other aspects. Complex business processes place higher requirements on the company’s management team and involve standardizing business processes, tying in each process effectively and efficiently, enhancing control of the whole enterprise business, lowering the enterprise’s costs through efficient management and so on. These are all problems that Ruiling Metallic needs to resolve at an early stage.
At the same time, staff levels have increased so that the company now has more than 40 staff in all. Communication within the company has been made more difficult as a result. Dispatching instructions from top to the bottom is a time-consuming business. This process not only lowers working efficiency, but also increases hidden operating costs.

Choice focussed on experience and strength

After analyzing its own needs and drawing on the experience gained by other companies, Ruiling Metallic included IT development on its company’s agenda this year. Given its inadequate knowledge of the IT industry, the company decided, after constructing the software infrastructure and setting up an office automation system, to go to the market to implement the next stage of the IT development process. Mr. Kang remarked that various products on the market had similar functions and met Ruiling Metalic’s needs – i.e. boosting work efficiency, integrating seamlessly with business processes and eliminating any unnecessary mistakes – and that many well-known ERP manufacturers on the market were targeting small and midsize businesses. In the end, however, it opted for SAP Business One for three main reasons.
Firstly, Ruiling Metallic sets great store by a supplier’s market experience. According to Mr. Kang, “This experience will bring us a lot of hidden benefits, which will gradually become evident through use.” The company regards SAP as its first choice because it has specialized in ERP for more than 10 years and is a leading supplier in this field.
Secondly, Ruiling Metallic is looking to this solution to standardize its management processes and deliver innovation. As a result, it is keen to join forces with a powerful supplier that is able to deliver fresh management concepts. Mr. Kang believes there are too many national ERP manufacturers who have limited market experience and are developing primarily for the local Chinese market. “To a certain extent, we are all at the same level. So it is hard for them to offer us fresh ideas.” Compared with these local companies, SAP can offer advanced management experience gathered at home and abroad and therefore has a competitive edge that is popular with companies such as Ruiling Metallic. SAP’s strength also ensures the product is implemented with complete reliability.
Last but most important of all, Ruiling Metallic attaches great importance to availability and the ability to scale up without shutting down operations. The product chosen had to do more than simply satisfy current needs. The follow-up system maintenance, after-sales service, technical support, and even key system upgrades all had to be factored into the equation. What Ruiling Metallic needed was a product with a clearly defined range of functions and a clear purpose. And it should also be convenient and cost-effective to upgrade. Ruiling Metallic chose SAP Business One as it met all these needs.

Both sides benefit from implementation

Ruiling Metallic has purchased 10 user licenses and 3 years’ service. Preliminary training is now underway and the product will soon be implemented. Mr. Kang says that it will take 3 to 4 months to prepare for the implementation of SAP Business One. Some departments and positions within the company will be adapted to reflect changing duties and responsibilities and to ensure they dovetail well with the new product. Mr. Kang regards this cooperation with SAP as beneficial to both sides. As far as Ruiling Metallic is concerned it will boost the company’s efficiency and optimize information management, while SAP will benefit from the opportunity to gain practical experience on the Chinese market and will gather feedback that will enable it to improve the application and make it even more attractive to – and user-friendly for – Chinese businesses.
As regards shortcomings in SAP Business One, Mr. Kang remarks quite frankly that there are still ways in which Account Management and Inventory Control can be improved. Its cost control and cost analysis need to be strengthened. But its scalability and compatibility mean it can be interfaced easily with other products. Ruiling Metallic is considering purchasing a series of process management software solutions which will interface with SAP Business One.
When reporters asked whether Ruiling Metallic would take part in the SAP selection process at the end of the year, Mr. Kang stated that he didn’t care for this kind of ‘preferential treatment’. They chose this product purely to meet their own needs. “This year has seen us make great progress in sales revenue, which reached almost sixty million yuan. Development on this scale compels us to put an IT system in place immediately and to choose a series of products offering strong continuity and scalability. If our annual revenue reaches 10 billion yuan, our development will encounter bottlenecks that require more powerful IT solutions and a stronger information system that will enable us to boost the company’s growth and break through this bottleneck.”

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