Huawei Technologies Co has developed its own in-house, enterprise resource planning — MetaERP system — marking a breakthrough in possessing self-controlled crucial technologies amid prolonged United States government restrictions.
ERP represents key software that underpins a company's business operations, ranging from accounting to supply chain management. It is widely seen as the most critical enterprise management IT system.
Meanwhile, Huawei is now developing a tailor-made ERP system for a unit of a Chinese State-owned enterprise, signaling that it is exploring a new business line by commercializing ERP software, people familiar with the matter said.
The move will increase pressure on foreign companies such as SAP and Oracle in the Chinese market, possibly reducing the use of their ERPs in State-owned enterprises in particular, experts said.
Huawei said on Thursday that it had replaced its legacy ERP system with its in-house MetaERP, which currently handles 80 percent of its business volume.
Until the breakthrough, Huawei had used ERP software developed by US tech company Oracle.
Tao Jingwen, a Huawei board member and president of its quality, business process and IT management department, said in a speech on Thursday in Shenzhen, Guangdong province: "We were cut off from the old ERP system and other core operation and management systems three years ago. Now, we are proud to announce that we have broken through that blockadeand we have survived."
As a result of Washington's restrictions, Huawei was unable to purchase the newest ERP system from Oracle three years ago.
Ren Zhengfei, founder of Huawei, also said on Thursday that Huawei now has self-controlled ERP thanks to the support of its partners, and its future development is also closely linked to its partners.
"We are still lagging behind in software today, but will we be strong one day? Maybe," Ren said.
The move is the latest push by Huawei to explore a new business line and seek new revenue sources amid Washington's restrictions.
"Huawei has more than 200,000 employees across the world, and it has sprawling and sophisticated businesses. As the MetaERP system passed tests supporting Huawei's businesses, it can also support big State-owned enterprises' operations after tailor-made improvements," the source told China Daily on condition of anonymity.
Huawei did not immediately respond to requests for comments on its plan to commercialize its ERP system.
Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said it is quite reasonable for Huawei to commercialize its ERP software after making a big investment in its development. "Huawei's entry will weigh down on the performances of SAP and Oracle in the Chinese ERP market, especially reducing the use of their ERPs among Chinese State-owned companies," he said.
The market size of China's ERP industry is expected to reach 68.2 billion yuan ($9.9 billion) by 2027 from 38.5 billion yuan in 2021, as companies from a wider range of sectors embrace digital technologies to boost operational efficiency, market research company Insight and Info forecast.
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