HJ Soft: the emerging Chinese competitor to SAP and Oracle….

As part of our recent study, we also studied a large Chinese government-owned manufacturing entity that has begun moving into the construction industry space . Obtained detailed information on this company (we’ll call it “Company C”) is challenging, even though we had a Chinese scholar working at the SCRC who interviewed managers at their location in China. However, the team was able to obtain some information related to the systems that C is using.

The primary system adopted by C is a Chinese-based ERP system, HjERP, Co-developed with Hejia Software Technology Limited (HJSOFT) HjERP is a local product produced by Hejia Software – HJ Soft – which is based in Beijing, with branches in China. It is one of the largest Chinese ERP providers and has a functional MRP II system capability. HJ Soft is supported by the government to develop Chinese ERP systems. This is being done not only to save on the high expense of commercially renowned brands such as SAP and Oracle, but also because the Chinese government wises to support a domestic ERP system provider. There is considerable reluctance on the part of large Chinese manufacturers to adopt big foreign-owned ERP systems such as SAP and Oracle. (The same can be said of large telecom systems such as CISCO.) This is due to some extent because of several mishaps that SAP and Cisco have already experienced in prior engagements with big companies in China. The major reasons for Chinese manufacturers choosing Chinese ERP providers are: 1) low cost/price, 2) better after-sale service (after-sale services like training, adapting, upgrading, redeveloping, etc.) 3) customized products and 4) low implementation risk. For example, many SAP Chinese customers found that they had to change their management structure or even re-engineer their process before they could implement an SAP system which would took an unforeseeable time and caused many delays for all sorts of reasons. In the end, many SAP implementation ended up using only 10% of the functionality of the system which cost tens of millions RMB. The only benefit may be to demonstrate to the world that “hey, we are using SAP just like the other Fortune 500 have done.” Chinese firms have only recently begun evolveing from the old to the new form of modern enterprise system and they are still evolving. They have their own situation and characteristics. It is difficult to adapt well to many Chinese firms unless important redevelopment and adaption on the system occurs.

Much of this can be traced to a large government project named “863 project” which had funding allocated to develop ERP capabilities for Chinese customers. The 863 Project was launched in March of 1986 (86-3) by the Chinese government to support research and domestic industry development in many high technology areas such as computer technology, net technology, robot technology, telecommunication, biological engineering etc. HJ was the director for a Chinese ERP development project under 863 in 2002 ( source: HJ webpage)
C and HJ Soft began partnering for co-development beginning in 1996 and have since co-developed ERP products and others over the last 18 months. Over 24 ERP modules have been developed including system control, purchasing, marketing, inventory, receivable, payable, financial, costing, customer tracing, MRP, production management, engineering, and manufacturing planning. Implementation took 18 months and required much collaboration. In addition to HJ Soft, C has also adoped other CAD and design systems that are of Chinese origin, specifically PTC-Pro/Engineer, XTPDM、XTCAPP.