There are special reasons for the failure of Henan Xuji Group (hereinafter referred to as Xuji) to implement ERP, but this case has many reference significance for Chinese enterprises. We just put out some facts and judge whether it is right or wrong. The reader's eyes are discerning, and the reader's heart is stalked.
At the beginning of 1998, the company adopted the products of Symix company (now renamed as Frontstep company) to implement ERP. Until July of the same year, Ji Xu's progress in implementing ERP was smooth, but a series of subsequent changes made the project a complete failure. Four years later, Ji Xu's sales rose from 65.438+500 million yuan at that time to 2.2 billion yuan now. However, for Ji Xu, the initial implementation of ERP has now become a burden.
I. Background
In the machinery industry 100 ranking, Ji Xu ranked 29th. Ji Xu is a large state-owned holding enterprise specializing in the research, development, production and sales of power system automation, protection and control equipment, one of the 520 key enterprises in China and one of the Henan 12 enterprise groups. The group company has two listed companies-"Xuji Electric" and "Tianyu Electric", as well as eight Sino-foreign (Hong Kong) joint ventures and other 2 1 subsidiaries. At present, there are 4,260 employees and more than 2,550 professional technicians, accounting for 60% of the total employees, including undergraduates 1375, masters16, doctors and postdocs, and 8 national experts with outstanding contributions. The company covers an area of 600,000 square meters (the above data does not include Tianyu Electric).
While insisting on expanding and strengthening its main business, Xuji Group lost no time to squeeze into civil electromechanical, e-commerce, environmental protection engineering, asset management and other industries, and achieved gratifying results. Over the years, Xuji Group has adhered to the business strategy of "focusing on one industry and diversified development", which has supported the rapid development of enterprises. In 20001year, Xuji group achieved a sales income of 2.88 billion yuan (including tax) and a profit of 250 million yuan, up by 34% and 9.75% respectively compared with 2000. All economic and technical indicators reached the best level in history and continued to maintain the leading position in the industry.
Founded in 1979 and headquartered in Ohio, USA, Symix specializes in the development and promotion of enterprise management software. 1995, SYMIX entered the China market, established Saint-Nice Software Technology Co., Ltd., and developed localized users such as Duoyuan Electric, Xuji Electric, Weili Group and Southwest Pharmaceutical. The concept of "Customer Synchronous Resource Planning (CSRP)" advocated by the company has been widely concerned by the industry and recognized by customers. At present, the total number of customers of its SyteLine software system in China has exceeded 140. At the beginning of 200 1, Symix was officially renamed as Frontstep, which expanded the company's business from enterprise resource planning to comprehensive e-commerce solutions.
Second, ERP selection
Xu Jishang hopes to solve three problems in ERP: on the one hand, he hopes to standardize business processes through ERP; The second aspect is to hope that the collection and collation of information will be smoother; The third aspect is to make the calculation of product cost more accurate through this form.
In the process of ERP selection, Xuji Company contacted ERP manufacturers at home and abroad, including SAP, Symix, Inspur Software and Lima. Ji Xuyi wanted to use SAP products at first, but the quotation of SAP was $2 million: the software fee was $6,543.8+0,000, and the implementation service fee was $6,543.8+0,000. At that time, Xu Jishang's ERP budget was only 5 million. Foreign ERP software can't afford it, and Ji Xu didn't look to domestic software companies. Because after investigating several domestic manufacturers such as Inspur and Lima, Ji Xu feels that the design ideas of domestic software manufacturers are not much different from the functions that have been realized by the software developed and designed by his own enterprise. After selection, Ji Xu finally chose Symix, an American medium-sized enterprise management software manufacturer. At that time, Ji Xu's output value was/kloc-0.5 billion yuan, equivalent to small and medium-sized enterprises in the United States, and Symix did well in small and medium-sized enterprises at a moderate price. Moreover, according to the general practice, the payment methods of general enterprises are divided into three ways: 5: 3: 2 mode. The terms provided by Symix are very favorable: payment in 7 steps. So the two sides made a deal.
Third, ERP implementation.
From the signing of the bill at the beginning of 1998 to July of the same year, Ji Xu's ERP implementation progressed smoothly. Including data sorting, business process reengineering, and the establishment of bill of materials are all smooth. The after-sales service of manufacturers is still in place, and the knowledge transfer of products is basically completed. In addition, some work has been done in training Ji Xu's own secondary development team. If this development continues, perhaps Ji Xu will become a model for domestic enterprises to successfully implement ERP. However, the plan cannot keep up with the changes.
1August, 998, in order to adapt to the changes in the market, Ji Xu began to make major institutional adjustments. It turned out that Ji Xu did not set up an internal business department, but existed in the form of various branches. However, in the fierce market competition, there is such a strange phenomenon: Ji Xu's own parts, such as each screw, are purchased at 5 cents in the company, but they can be obtained at 3 cents in the market. This must be greatly adjusted.
The result of the major adjustment is to operate these parts factories according to the model of simulated legal person. Ji Xu's idea is to give these parts manufacturers two to three years, and if they can't survive, consider other ways. For example, laid-off workers, enterprises change production and close down.
ERP is implemented first, and the company structure is greatly adjusted later. However, in the process of adjustment, Ji Xu's senior management paid more attention to the survival of enterprises, rationalization of business operations and maximization of profits, and obviously did not seriously consider the impact of structural adjustment on ERP projects.
The business structure of the enterprise has changed, but the ERP software flow used at that time has been fixed, and Symix manufacturers seem to be powerless and can't think of a good solution. Therefore, Ji Xu had to negotiate with Symix company in a friendly way and the project was suspended. Although it has been running for five months, it is obviously meaningless to continue running. The ERP of Symix only runs on some functions of some branches of Xu Ji.
Fourth, diagnosis
Ji Xu failed to implement ERP for three main reasons.
The first factor, Ji Xu's very big business structure adjustment and key business process reorganization, should have a clear plan and understanding before ERP, whether in advance or at the same time. However, the reorganization of key business processes should be carried out in advance, and only some non-key business processes can be transformed at the same time. So would it be better to choose a more powerful management software? Maybe SAP was the right choice at that time. If the software was more adaptable, it wouldn't have such a big impact. But at that time, I chose SAP. At this time, SAP still needs $654.38 million +0 million. What about Ji Xu?
The second factor is the manufacturer. When Americans design software, they don't expect that China enterprises will change so much in just a few months. Any product has its adaptability, and there are also areas that it is not good at. Such a big change in the enterprise is definitely not the scope that software can adapt to. But the responsibility of manufacturers should be heavier, because manufacturers or consulting companies have the responsibility to help enterprises analyze business processes and point out some unreasonable places. Before coming to China, Symix was not unaware of the role of consultants.
The third factor is that the role of the "number one" cannot be continuously and effectively played. Enterprise ERP is a "number one project" and a process to test the will and courage of the number one enterprise. Ji Xu's decision-makers spent 5 million yuan on the ERP of 1998, and their determination was not small. But the boss has limited energy after all, and you can't expect him to spend all his time on it. In the process of implementation, Ji Xu's high-level practice is to hand over this right to the information center, requiring all departments to actively cooperate, and whoever does not cooperate will be laid off. However, even though the boss's "sword on the side" was waving around, the information center still found that other departments still did not follow the overall layout of the information center during the implementation process. So why not "set an example" or take other compulsory measures? Because the software process has been set, and at this time, the enterprise has made a structural adjustment to adapt to the market, so it is unclear which party is responsible for the problem, whether the software is bad or the cooperation of people is not enough, which leads to the unsmooth process. Responsibility cannot be defined, who will be punished? However, Lenovo implemented SAP system before the spin-off, which was divided into Lenovo and Digital China. The ERP system has also been split, and now it is running well. The key factors are the determination of the person in charge of the enterprise and the effectiveness of the "sword on the side".
What should Ji Xu do at present? One way of saying this is to consider communication and consultation with larger ERP suppliers, make diagnosis and find appropriate methods. There are also cooperation with domestic software suppliers, with ERP theory and technical support, and joint development with Xuji Information Center team. So far, Ji Xu still relies on his own developed programs to support the operation of his own information system. The management software bought by 5 million only runs in one subsidiary. Although it is not used now, Ji Xu still has to pay high software upgrade and maintenance fees every year. Ji Xu has maintained rapid development in recent years, but this has nothing to do with wasting 5 million yuan.