ERP localization substitution: Embarking on a new journey of digital transformation for central state-owned enterprises
In today's digital age, enterprise resource planning (ERP) systems are crucial for the operational management of enterprises. With the continuous promotion of China's information and innovation policies, the foreign ERP systems that large state-owned enterprises rely on are facing significant replacement needs. This trend not only concerns the operational security of enterprise core data, but also brings unprecedented development opportunities for domestic ERP suppliers.
1、 Background: Information and innovation policies promote the localization of ERP
With the rapid development of information technology, information security has become an important component of national strategy. In order to ensure national information security, China vigorously promotes the development of the information and innovation industry and encourages enterprises to adopt domestically produced information technology products and services. In this context, many large state-owned enterprises' foreign ERP systems face replacement needs due to data security risks. There may be risks of theft and tampering in data storage, transmission, and processing of foreign ERP systems, which cannot be ignored for central state-owned enterprises involved in key areas of the country. Therefore, promoting the localization and replacement of ERP has become an inevitable choice to ensure the security of enterprise core data operations.
2、 Current situation: The localization process is accelerating
In 2017, the localization of the ERP industry was officially launched, marking a new stage of development for China's ERP industry. In 2022, State owned Assets Supervision and Administration Commission Document No. 79 explicitly requires all central and state-owned enterprises to complete the replacement of information and innovation by 2027, and central enterprises are required to report the progress of information and innovation replacement on a quarterly basis. The introduction of this policy provides strong policy support for the localization and replacement of ERP. Meanwhile, foreign ERP vendors are also facing many challenges. Since 2019, Oracle has gradually withdrawn from the Chinese market, and SAP has also experienced situations such as the resignation of the Greater China President and organizational restructuring in 2024. These changes have further accelerated the process of localizing ERP.
3、 Impact: Domestic suppliers welcome opportunities
The localization of ERP has brought tremendous development opportunities for domestic ERP suppliers. On the one hand, domestic ERP suppliers are expected to gradually penetrate the large enterprise market with central state-owned enterprises as the core. As an important pillar of the national economy, state-owned enterprises have a huge demand for ERP systems. Domestic ERP suppliers can leverage their local advantages to gain a deeper understanding of the business needs of central state-owned enterprises and provide more practical solutions. On the other hand, the localization replacement of ERP will promote the localization process of the entire ERP industry. With the widespread application of domestic ERP systems in central state-owned enterprises, their technological level and service quality will continue to improve, thereby driving the development of the entire ERP industry. At the same time, the rise of domestic ERP suppliers will also promote the development of the domestic information technology industry and form a good industrial ecology.
In short, the localization replacement of ERP is an important component of China's innovation policy and an inevitable choice for large state-owned enterprises to ensure the security of core data operations. Under the current policy background, domestic ERP suppliers have ushered in a rare development opportunity. I believe that in the coming years, with the continuous acceleration of the localization process of ERP, domestic ERP systems will play an increasingly important role in the market of central state-owned enterprises and large enterprises, making greater contributions to the digital transformation of Chinese enterprises and national information security protection.
