XCMG and Oracle NetSuite establish a relationship to consolidate digitalization and welcome the new era of internationalization 2.0 development

As the world's third largest construction machinery group, how does XCMG choose the direction of digitalization under the background of its Internationalization 2.0 strategy?

Recently, XCMG, Oracle and Hande Information have officially launched a strategic partnership. This is a further strategic deepening after the successful completion of the first phase of cooperation between XCMG and Oracle NetSuite. With the help of Oracle NetSuite, XCMG's global digital platform deployment is continuously improved, and the overall operation and management level of XCMG's internationalization sector is improved. At the same time, Oracle NetSuite also provides escort for Chinese manufacturing represented by XCMG to sail overseas.

199IT was fortunate to witness the historic moment of the tripartite strategic cooperation on site, and also had dialogues on topics such as digitalization with Liu Jiansen, Vice President of XCMG Construction Machinery Co., Ltd. and General Manager of Xuzhou Construction Machinery Group Import and Export Co., Ltd., Ye Tianlu, Global Vice President of Oracle and General Manager of NetSuite Greater China, and Huang Yiquan, CEO of Hande Information.

With Oracle NetSuite Jieyuan actively embraces digital transformation

More than a decade ago, during the booming information technology 1.0 wave, XCMG seized the historical opportunity to build a local information technology infrastructure system.

Over the past decade, XCMG's new generation of informatization has been developing rapidly. XCMG focuses on industrial Internet and intelligent manufacturing, deeply integrating new generation information technology into the manufacturing industry. Today, XCMG is focusing on breakthroughs in key areas such as industrial Internet + dual carbon, industrial Internet + 5G, industrial Internet + park, digital twins, industrial software, industrial vision, industrial big data, and artificial intelligence, seizing the initiative in the new round of technological revolution and industrial transformation.

However, XCMG has encountered many challenges in export digitalization. Liu Jiansen, vice president of XCMG Construction Machinery Co., Ltd. and general manager of Xuzhou Construction Machinery Group Import and Export Co., Ltd., made no secret of the fact that Chinese companies have a common pain point when going overseas: overseas channel construction has just started, and resource layout is not as easy as in China, especially at the beginning, they may not get support from large channels.

(Photo: Liu Jiansen, Vice President of XCMG Construction Machinery Co., Ltd. and General Manager of Xuzhou Construction Machinery Group Import and Export Co., Ltd. Source: 199IT)

Liu Jiansen admitted that under the background of internationalization strategy, XCMG's overseas business tentacles have just been extended and its overseas marketing system is immature. XCMG insists on laying a solid foundation as soon as it goes abroad and consolidating its management DNA.

As Huang Yiquan, CEO of Hande Information, summarized the trend, "Many companies have been thriving in IT construction in China, but have encountered many setbacks in the process of internationalization. They underestimated the difficulty of promoting overseas construction."

XCMG urgently needs a powerful information system to support the company's internationalization 2.0 development strategy and solve the challenges encountered in business development, such as the uneven management level of overseas branches, the need to improve the accuracy of basic data, the lack of synchronization of business and financial data changes, and the lack of comprehensive workflow configuration tools.

In 2021, XCMG decided to re-select its partners, and Oracle NetSuite came into XCMG's vision.

On the one hand, XCMG recognizes Oracle's position in the global enterprise software system. On the other hand, Oracle NetSuite's powerful global products and solutions are suitable for XCMG's internationalization 2.0 development strategy.

Liu Jiansen said with a smile that the cooperation with Oracle NetSuite was the result of XCMG's active choice. "Oracle, as an industry leader, has been leading the IT industry for many years. As a traditional engineering machinery company, XCMG is very honored to have the relationship with Oracle NetSuite, and we cherish it and work hard to cooperate. Hande Information is very well-known in implementation and has rich experience in localization and globalization. I hope that such partners will work with XCMG to jointly build XCMG's internationalization and become a world-class enterprise."

(Photo: Ye Tianlu, Global Vice President of Oracle and General Manager of NetSuite Greater China Source: 199it)

Ye Tianlu, Oracle's global vice president and general manager of NetSuite Greater China, said that Oracle is the world's leading enterprise software provider. Oracle NetSuite ERP Cloud is Oracle's fastest growing product. Currently, Oracle NetSuite has more than 32,000 enterprise-level customers in more than 200 countries and regions around the world. Many world-renowned brands entrust their business to Oracle NetSuite and migrate their finance, operations, processes, etc. to the Oracle NetSuite cloud. In China, Oracle NetSuite, with the mission of operating locally and winning the world, helps Chinese companies develop globally. More than 3,000 Chinese companies have chosen Oracle NetSuite to go overseas. Oracle NetSuite supports more than 190 currencies and 27 languages, and meets the tax and compliance requirements of more than 100 countries and regions. It is a booster for Chinese companies to go global.

"XCMG and Oracle NetSuite are strategically collaborating to jointly create a benchmark for Chinese companies going global. Internationalization is one of XCMG's main strategies, and it is also an area where Oracle NetSuite excels. XCMG uses Oracle NetSuite to establish an integrated architecture for multinational subsidiaries, which not only meets internal control requirements, but also supports the localized operations of overseas subsidiaries. Oracle NetSuite's unique "ERP++" model runs through the pre-sales, in-sales, and after-sales value chains to achieve a single network at home and abroad; at the same time, the multi-language, multi-book, and consolidated reporting functions meet both listing compliance requirements and the local operating and management needs of subsidiaries, helping XCMG Import and Export to quickly build a model for overseas subsidiaries; with the help of Oracle NetSuite's unique flexible and open platform features, XCMG Import and Export will reorganize its IT planning, integrate old IT resources, and establish an integrated platform with Oracle NetSuite as the core, truly setting sail and 'going into battle lightly'." Ye Tianlu commented on the significance of this cooperation.

Deepen cooperation to solve the pain points of internationalization 2.0 development

2022 is an important milestone in the development history of XCMG. On August 29, the newly added shares of XCMG Machinery after absorbing and merging XCMG Limited were officially listed, marking the official completion of XCMG's overall listing. The largest equipment manufacturing restructuring in the capital market in recent years has been a complete success, and the development of "New XCMG" has entered a new era.

Internationalization strategy has always been XCMG's main strategy. As the spearhead of XCMG's international business, XCMG import and export bears heavy responsibilities. Especially in the current era of drastic changes in the global construction machinery market, Liu Jiansen has a very clear understanding of how to reconstruct, break through and integrate. "At present, productivity must be connected with technology, and a new management system must be formed. Only by asking management for strength, efficiency and performance can the competitiveness of global development be continuously improved!"

Liu Jiansen is a veteran in the field of IT information construction and an expert in enterprise management. As the first CIO of XCMG, he personally oversaw the 1.0 construction of XCMG's informationization. At the same time, as an enterprise manager, Liu Jiansen deeply understands the cause and effect relationship of "if the technology is not solid, the earth will shake".

XCMG has been increasing its investment in digital transformation and using digital tools to enhance global business control and improve management efficiency.

XCMG has R&D centers, manufacturing bases or KD factories in more than 10 countries including Germany, the United States, Brazil and India. Its products are exported to more than 190 countries and regions, covering 97% of the countries along the "Belt and Road". It ranks first in export share in 35 countries. It has established more than 2,000 overseas outlets around the world to provide users with comprehensive marketing services. The annual total exports and overseas revenue continue to rank first in the Chinese industry.

The biggest pain point and difficulty of overseas business lies in the management of overseas subsidiaries. Listed companies are required to quickly consolidate financial statements, but due to differences in time zones, accounting standards, currencies, etc., it is difficult to quickly collect and report overseas operating results. Previously, XCMG's overseas subsidiaries all used local software systems, which could not be integrated. Backstage staff needed to merge data through interfaces, which was annoying and overwhelming, and the most important thing was the lack of technical management capabilities.

(Photo: Huang Yiquan, CEO of Hande Information, on the left. Source: 199IT)

Huang Yiquan agrees very much. He believes that the new situation of overseas management of international enterprises is reflected in the transformation from the previous financial control to operational coordination. While integrating global resources, international companies need to coordinate the development of global operations. The sophistication and difficulty of management will increase. The balance between headquarters control and localization is the key point. The openness advantage of Oracle NetSuite is more prominent.

After the successful completion of the first phase of cooperation with Oracle NetSuite, Liu Jiansen said, Oracle NetSuite is not only more flexible, lower cost and more efficient, but also can implement our digital transformation strategy to the end and achieve comprehensive coverage. Oracle NetSuite's advantages such as multiple currencies, multiple tax systems, and multiple accounting standards will further enhance and accelerate XCMG's internationalization process and become a booster for our future development."

A modern enterprise integrating industry and trade and providing forward-looking services

In Ye Tianlu's opinion, as the leader of the domestic engineering machinery industry, XCMG is very advanced not only in business, but also in the informationization and digitalization of the enterprise. XCMG's overseas business is the fastest growing sector. The overseas system, national and regional business expansion also faces challenges in various aspects, such as the increasing complexity of customer needs, the rapid growth of overseas orders, and the increasing pressure on the supply chain. From the perspective of the digital construction of the enterprise, it is necessary to further rely on data-driven. High-efficiency docking between overseas and domestic enterprises will improve the service capabilities and speed of the enterprise. These are all forward-looking in XCMG's digitalization, which is very consistent with Oracle NetSuite.

Oracle NetSuite features global operations, financial compliance, one platform to manage all businesses, and global implementation capabilities, helping XCMG control global operations and support XCMG's global expansion. At the same time, its excellent cost-effectiveness, rapid deployment and rapid launch help XCMG break down system barriers and connect many information islands. Including pre-sales inquiries, contract signing, production and delivery, product services, etc., all realize the complete sales cycle, maximize the value of data, and improve the efficiency of XCMG's overseas business.

Oracle NetSuite has accumulated many leading practical results through more than 20 years of industry iteration, from business opportunities to orders to payment, from procurement to payment, sales and production integration, group overseas finance, etc. Advanced process management allows Chinese customers like XCMG to quickly learn from the experience of successful global companies overseas and achieve rapid success without taking detours.

Oracle NetSuite's overseas integrated management platform can help importers and exporters achieve rapid overseas business and financial integration. Business and financial reconciliation, data connection between overseas companies and XCMG headquarters, and cross-country, cross-regional, and cross-business department information exchange can reduce the error rate of reconciliation and shorten the time for closing accounts. This is very important for a listed company, especially an international company.

Back to the construction machinery manufacturing industry, Ye Tianlu believes that China's manufacturing industry has been very mature for many years, and how to sell products to domestic and foreign markets is the focus of enterprise development. Most manufacturing companies are developing in the direction of industry and trade integration. At present, Chinese manufacturing companies have done very well in the "industry" area, but lack the "trade" area. From business opportunities to orders to after-sales, from procurement to payment, from sales to production, Oracle NetSuite can help manufacturing companies achieve industry and trade integration.

Actively embracing overseas public cloud SaaS is the most efficient model

Regarding the selection of cloud computing services, Liu Jiansen believes that suitability for the enterprise is the most important. As an open and transparent international listed company, XCMG's data is open, transparent and standardized. Unlike other companies that mystify data, XCMG actively embraces the public cloud and is very confident in data security. XCMG insists that data is wherever the customers are. The distributed management model determines that overseas subsidiaries and dealers manage local data and adhere to the open principles of localization and localized management. Liu Jiansen emphasized that the emergence of public cloud services provides XCMG and service providers with opportunities for large-scale compliance operations and healthy and transparent development.

At the same time, Oracle NetSuite's cloud model has effectively solved the problem of different levels of basic data construction in different countries and regions overseas. Ye Tianlu said that the public cloud can use the system anytime and anywhere in the world, and Oracle NetSuite's multi-company, multi-accounting standard, and multi-tax system management helps XCMG to go global quickly and in compliance. At the same time, the modular functional composition can also help realize the overall import and export planning, implement it in stages, and run in small steps, reducing the initial cost.

When talking about the acceptance of the SaaS model by domestic enterprises, Huang Yiquan said that SaaS is a barrier for enterprises in the long run. From the perspective of software precipitation standardization, there is no model more efficient than SaaS. Huang Yiquan believes that building software systems will develop in the direction of SaaS, which is the most efficient way.

Ye Tianlu said that the current state of the Chinese SaaS market is similar to that of North America seven years ago. Customization and personalization are more popular, and the degree of product standardization is relatively low. It takes time to change the original thinking about data security. Professional matters need to be handed over to professional companies.

Conclusion:

For XCMG, the internationalization strategy has evolved to the 2.0 stage. XCMG has set four goals: "enhancing channel control, improving internal vitality, improving brand influence, and increasing market share." Global control, efficiency priority, operational synergy, and value enhancement are all challenges and opportunities that XCMG is facing at this stage.

XCMG has made forward-looking plans for digital transformation, chosen to form a strategic partnership with Oracle NetSuite, actively joined the wave of digital development, and used digitalization to gain opportunities for international development for the company. This courage and perseverance deserves admiration from the industry.

Oracle NetSuite and Hande Information believe that the phased success of XCMG's digital development is inseparable from the strong internal promotion of XCMG and the open, positive and enterprising spirit of XCMG's employees. As Liu Jiansen firmly believes, "the one who has the same desire from top to bottom, the same synchronization from front to back, and the same frequency from left to right will win."

In the process of deepening its internationalization strategy, XCMG has always kept its original aspiration in mind: by further increasing investment in science and technology and informatization, improving the efficiency of global business management, bringing higher value to global customers, and helping partners from various countries achieve success.

Oracle NetSuite's powerful and rich ERP and globalization functions help Chinese companies going overseas, including XCMG, to streamline key business processes. This Oracle NetSuite deployment adopted the strategy of "small steps and fast progress". By quickly establishing benchmarks, it effectively strengthened the collaboration between overseas branches and headquarters, achieved integrated business and financial management, and provided a new IT deployment idea for Chinese companies going overseas.