Enterprise resource planning (ERP) systems, an important software enabler of intelligent manufacturing, are the core of the “Made in China 2025” initiative to comprehensively upgrade the Chinese industry. However, ERP is notoriously difficult to adopt. In this chapter, the author discusses the Chinese ERP adoption landscape and explores important issues facing organizations adopting ERP. The chapter presents the findings of a large-scale survey of Chinese management by identifying and overcoming major barriers to further success in ERP development. The chapter highlights the influence of organizational culture, education, and training on future success. The challenge will be to provide education and training that addresses both culturally specific organizational issues and technical challenges. Providers with specific cultural understanding, including vendors and universities in Oceania and Asia, will benefit from this study.
TopIntroduction
The “Made in China 2025” initiative aims to comprehensively upgrade the Chinese industry. Its core focus, intelligent manufacturing, applies the tools of information technology (IT) to production, making it more efficient and integrated to occupy the highest parts of global production chains. As the Chinese government pushes to implement the initiative, a new round of scientific and technological industrial upgrading and transformations may be needed.
Intelligent manufacturing applies new IT to all aspects of industrial production, including design, manufacturing, management, and service. As the informational backbone of intelligent manufacturing, enterprise resource planning (ERP) is the essential core information software in the manufacturing industry. ERP systems are essential for real‐time data shared across an organization, as well as for the integration and automation of business processes. This is particularly important in a new business environment where automation, effectiveness and efficiency in operations and real‐time data are valuable contributors to business success.
Successful ERP implementation is essential in developing technological innovations like blockchain and Internet of things (IoT) applications. For example, the ERP system is home to critical data like purchase orders, invoices and business partner payment information. The ability to transmit this type of data via blockchain improves business-to-business (B2B) processes like invoice processing and payments. The success of these types of initiative is dependent on a well-functioning ERP system. ERP development in China as the information backbone of an organization is crucial for efficient, data-driven business practice.
ERP, a highly innovative and sophisticated technology, provides an advanced information system to support daily management planning and coordinate the cooperative relationship among departments in an enterprise. This technology supports multiple functions, including product planning, manufacturing, inventory management, and finance. ERP adoption across a business requires large investments in time and efforts. The complexity of ERP implementation has led many firms to give up adoption projects. This is evident in China, where ERP adoption is particularly complex due to culturally specific aspects of Chinese business organizations (Chofreh et al., 2014; Sheu, Chae, & Yang, 2004; Sheu, Yen, & Krumwiede, 2003).
Education is key to the success of ERP. Globalized systems are not always applicable in different contexts, especially Asia. Therefore, education about globalized system development is essential to create Asian technology leaders of the future. ERP education plays an important role in ERP projects.
The ERP skills shortage has reached an all-time high, especially in the Asian region. Major global ERP vendors and a limited number of universities offer training. However, a drawback to vendor training is that the system is culturally specific. The challenge will be to design training that addresses the culturally specific organizational issues discussed in this chapter. Providers with specific cultural understanding, including vendors and universities in Oceania and Asia, will be better placed to undertake this effort.
In this chapter, the author discusses the main features of ERP adoption in China. The chapter also reviews how the ERP landscape has changed in recent years. ERP implementation is a complex and difficult task. Therefore, the author explores significant issues for organizations adopting ERP, discussing the findings of a large-scale survey of Chinese management. The study asks the following questions: (1) What are the major barriers to further success in ERP development? and (2) How can these barriers be overcome?
The survey presented covers the following issues related to ERP adoption research and Chinese managers’ attitudes toward ERP: (1) motivation systems; (2) knowledge accommodation; (3) level of authorization; and (4) implementation cycling period. The chapter highlights how issues of adoption are intertwined with the cultural dynamics of Chinese organizations. This may explain the recent turn against standard systems offered by major global suppliers to domestically produced systems.
Chinese enterprises no longer import ERP systems. Instead, they are using local high-quality ERP systems made by Chinese companies. Even with major localized systems development, there is a need for a renewed focus on organizational dynamics for ERP success. The author points to the need for education and development of employee motivation for supporting ERP systems.