Why Did Sinosteel Pursue the Development of an Erp System? What Were the Objectives? What Challenges (Risks) Does Erp Address for Sinosteel?

Topics: Enterprise resource planning, Supply chain management, Management Pages: 2 (562 words) Published: March 22, 2012
As mentioned at the beginning of the video, Sinosteel is a very important company, currently holding 86 subsidiaries under its administration, among which 23 are abroad. Sinosteel grew through the acquisition of these subsidiaries and is likely to keep this pace within the years to come. Before the implementation of ORACLE in 2005, Sinosteel had to face some issues directly related to this large amount of daughter companies and the size of the company itself. We can outline two main issues Sinosteel had to take care of: •The lack of standardization: Even after becoming a subsidiary of Sinosteel, the companies used to keep their former management processes, managerial regulations, coding, human resources management systems, etc. This obviously resulted in a quite difficult global management of the enterprise since having a clear overview of the company was uneasy, if not impossible. •The decentralized information: The information within the different Sinosteel’s subsidiaries used to be kept in the said subsidiary and not to be shared with the other ones. This proved to be very risky. For instance, when customer information was decentralized and controlled by sales in each subsidiary, delinquent customer could owe money to one subsidiary only to invoice and be paid by another. Thus, before the implementation of the ORACLE Enterprise Resource Planning, the way Sinosteel used to manage its corporate information was risky and could lead to unfortunate or even dangerous misunderstandings. For these reasons, Sinosteel chose to pursue the development of an ERP system. The objective was to reach management efficiency in all core business functions through information sharing. These improvements were mainly perceptible in the customer relationship management, the supply chain management and the human resources management, although ORACLE also provided Sinosteel with improvements in the fields of finance, project management, and so on.

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