Recently, the correspondent came to interview Xu Shaochun, the president of the board of the Kingdee Company with its headquarter at the New and Hi-tech Zone. Very happily, Xu told him a story that Kingdee had successfully acquired Shenzhen Sun Rising Software Technology Co., Ltd. several days ago. "Financial crisis can lead to the reshuffle in every industry, and obviously accelerate the industrial consolidation. Kingdee will keep announcing new acquisitions this year", said Xu Shaochun.

 

Financial crisis seemed like a complete check.

 

Much earlier than other domestic enterprises, Kingdee had smelt the "odor" of the roaring financial crisis. 

 

Last September, the U.S. investment bank Lehman Brothers announced its filing for bankruptcy, immediately directing the focus on Kingdee funded by the bank. Although it was almost crashed by numberless phone calls about this, Xu Shaochun still looked very calm. He said, "It is Kingdee who received the investment from Lehman Brothers, not the reverse, so Kingdee is never affected by the bankruptcy of Lehman Brothers. Moreover, Lehman Brothers only holds a small proportion of our shares, just 3%. So far, we do not get any notice about someone's takeover of its shares of our company. " He adjusted his glasses and added with a smile, "We actually would like to know who has taken its shares because we are buying back our shares".

 

After a check over the reports of Kingdee's more than 40 branch companies, it could be found that Kingdee was not free from the effects of the financial crisis, either. Pointed out two branch companies in Dongguan and Foshan, he said, "only these two branch companies had a negative growth last year because the factories in these two regions had their finance and production outside. When the financial crisis occurs, many of them cannot survive the insufficient purchasing and orders and have to go bankruptcy".

 

Nevertheless, Kingdee still had remarkable achievements last year and gained a good trend of growth as a whole, because of its strong foundations in Xu Shaochun's opinion. "After its development in the past 15 years, Kingdee has been advancing like a tree with deep roots and dense leaves because it has the root of more than 600,000 customers", he said. 

 

Due to the upcoming financial report, Xu Shaochun did not unfold the specific profit target, but revealed the business income of Kingdee's "troika"—ERP, Apusic and Youshang.com, among which ERP increased by around 20%, Apusic by 50% and Youshang.com had a more outstanding increase on its low base because it was recently founded.

 

Due to Kingdee's continuously good achievements, Xu Shaochun felt more confident of his optimistic judgments on the financial crisis. In his opinion, the financial crisis would be a great check over Chinese enterprises. "In the past 30 years, Chinese enterprises relied on their low cost in competitions, and never confronted with some really giant difficulties. The upcoming winter of economy can be a good chance for them to have a good experience and chance to reflect on themselves. In the mirror of financial crisis, they can identify what problems they have and which parts they should improve", said Xu, "Chinese enterprises keep their focuses on development all the time so that they overlook their fundamental management. The coming crisis can help them find out the real crisis inside themselves, and further promote their technical and management innovation". 

 

Staff's salaries would not be cut while that of the managing people would be reduced by 20%

 

In the interview, Xu Shaochun kept telling us "Financial crisis is a test of entrepreneurs' wisdom". Inside the Kingdee Company, everyone was well prepared but not worried about the crisis. With a smile, Xu told the correspondent that he had recommended to his staff a book Philosophy and Life last year, in order to help them treat the financial crisis in a dialectical way.

 

"We find a common recognition in the eastern wisdom", said Xu Shaochun, "I kept communication and discussion with my staff through my blog and questioning how the financial crisis happened. We reached to a common conclusion that it was a man-made disaster instead of a natural calamity. Therefore, we humans must have a solution for what trouble we had made by ourselves".

 

Kingdee prepared a lot of solutions to guard against the crisis, and pursued several strategies together when the crisis was here.

 

Innovation must be put first. Xu Shaochun said, "A software company sales its intelligence and mind. With innovation as its soul, it can only develop with continuous innovations". For this reason, Kingdee chose to recruit more talented people while many IT companies postponed their importation of talents. By the end of last year, it had claimed to recruit 150 workers with postgraduate and doctorate degree. Xu revealed, "Only 80 workers are recruited so far, so that we still need a group of high-level talented people. Moreover, we, in order to overcome the crisis with our staff, will not only keep the inspiration system of option, but also carry out an inspiration system of shares". Coincidently, a previous worker in Kingdee came to look for "Old Xu" for several words about his back to Kingdee, in the break during the interview. He had left from Kingdee to another company for more than 2 years, but he realized that there was much more space for him to develop in Kingdee and would quit his current job for Kingdee after Chinese New Year. 

 

Since last year, Kingdee promised not to cut salary or lay off, but its managing staff could not enjoy the "guarantee" and had their salaries 20% lower than before. Xu Shaochun explained, "We will not cut the ordinary staff's salaries, but we determine to reduce the salaries of managing staff in order to make them feel the financial crisis directly and ensure those with highest power to take responsibilities". Meanwhile, Kingdee strengthened its internal management and spent more time on dynamic budget, internal management and other things. As claimed by Xu Shaochun, they were practicing "themselves" to delve out its internal potentialities and promote its competitiveness.  

 

With respect to market expansion, Kingdee had been specifying the market and sticking to the opinion of industrial development. Xu Shaochun said, "Although real estate and steel industries do not have a regular experience this year, it is still undeniable that information would become an accelerator to facilitate transition and upgrade and promote efficiency. A deep exploration in these industries must give back a considerable harvest". Therefore, Kingdee formed a special Wanke Department that was its first independent service department only for an enterprise. Xu Shaochun preferred to a kind of grid channel expansion to spread Kingdee's service offices like community centers, intending to make its service offices available at everywhere customers lived. 

 

Kingdee had taken the acquisition as an "active measure" against the financial crisis and its acquisition of Sun Rising Software had raised the curtain for Kingdee to realize its expansion strategy in the new industry in 2009. A relevant managing staff from the Kingdee Group had stated that the event of integrating the team of Sun Rising Software had been Kingdee's long-term strategic investment in industries, foreboding that Kingdee could provide higher value services in the rapidly growing information retail and chain industry. Xu Shaochun said that it would catch the opportunity of industrial integration to realize a large number of acquisitions. Before this, Kingdee had acquired Beijing Case, Xinya Cybics (Hong Kong), Shenzhen Gelilai and Gloryview Technology, etc. In these acquisitions, it also improved its own production lines, imported a large number of professionals and achieved a quicker development. 

 

"Toika" led Kingdee to its transition

 

"Kingdee have never experience such definite business", Xu Shaochun said with a feeling while talking about its development strategy, "we are now advancing together on three carriages, ERP, Apusic and Youshang.com, and mainly promoting a Chinese management mode". By this time, Xu Shaochun suddenly questioned the correspondent, "Have you noticed Kingdee's ads all along the road from airport to downtown? On these ads, you can find our target of transition, Kingdee a corporate management expert".

 

Kingdee's transition could be traced back to 2007, from a product-oriented company to a service-oriented company. It established an image of management expert, greatly developed an online management and e-commerce platform, and created a business layout of "three carriages", ERP, Apusic and Youshang.com.

 

Xu Shaochun thought that the unexpected financial crisis had become a catalyst for Kingdee's transition to a certain extent. He admitted that it would be a great revolution from selling products to providing services. Kingdee, therefore, must find out how to help customers adjust to their industrial demands and reinforce their corporate management, which appeared to be a great challenge. Xu said, "A transition is normally urged more by the pressure inside an enterprise. Now, the financial crisis has created the most powerful pressure outside an enterprise. Both the pressures have firmed Kingdee's transition, so I hope it can rise in the flaming crisis. Last year, Kingdee had been honored with Shenzhen Mayor Quality Award and Innovation Award, which was rare in the industry and had encouraged its transition considerably".

 

Kingdee Apusic consisted of key industries and e-business in which Kingdee had started its outstanding step. Last year, Kingdee Apusic Company had won the bid for three golden programs-Golden Quality, Golden Agriculture and Spatial Information Database, breaking the monopoly of foreign companies in the market. Moreover, it maintained a 100% compound growth for 4 continuous years, which was far more than the average growth rate in the industry. It would further expand at a stride this year and had established a branch company in Beijing at the beginning of this year. Cai Jun, the general manager of Kingdee Apusic, told the correspondent that the establishment of Beijing Kingdee Apusic Company was only a part of Kingdee Apusic's expansion plan in 2009, and they will put more investment in this plan. Much in favor of this business, Xu Shaochun said expressively, "The Apusic might have its shares listed at China Growth Enterprise Market". 

 

With regards to ERP, Xu Shaochun thought that management software might have a brighter future in the "winter". He said, "With its high added value of management concept and mode, management software can help small and medium enterprises overcome the predicament. Since last year, we have visited many customers and been told that they might go bankruptcy if they did not choose our ERP. Why? Since they did not realize how much stocks they had, ERP could help them find out it and have a better control of production and understanding of the market". It was reported that Chinese ERP became more and more popular in domestic enterprises due to its high cost performance and a group of domestic enterprises purchasing the ERP products from foreign companies had chose Chinese ERP since last year.