IT lags business growth at SOEs

Updated: 2011-08-16 10:32

By Yang Cheng (China Daily)

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Expert: 'Major revolution is imminent' in data handling and computing systems

BEIJING - State-owned enterprises (SOEs) will need to make sweeping improvements in their information technology (IT) over the next five years to meet rising global business demands, said a high-tech expert with the central government administration that governs SOEs.

Yang Qingfeng, an IT expert at the research center of the State-owned Assets Supervision and Administration Commission, told a recent forum that the SOEs have "been slack with their IT management".

"This is a very common phenomenon, but a major revolution is imminent in their IT systems during the 12th Five-Year Plan period (2011-2015)."

Research results by the center indicated that 52 percent of SOEs plan to employ cloud computing to upgrade their IT systems.

SinoChem, SinoPharm and China TravelSky have taken the lead in using cutting edge technology in their management and business operations, Yang said.

"3G and some leading IT solutions with more focus on cost and energy efficiency will be favored," he added.

The center's statistics show that central SOEs plan to increase investment in IT by 21.65 percent next year.


Yang noted that burgeoning business by SOEs has created complex demands on their current IT systems, which often have out-of-date servers, databases and software for risk prevention.

According to results from Hapi Research, a leading technology research firm, 17 percent of large SOEs including China Mobile and State Grid have multiple systems in service simultaneously, which is very likely to cause their IT to go "out of control".

Such configurations are also inefficient for business and increase costs, Hapi said, offering the example of China Construction Bank.

After many long and difficult days, the bank overhauled its system to integrate all its software already in service and running on various platforms. It now has a single operating system that has increased business efficiency by 30 percent, the result said.

State-owned airlines face similar problems and some has made an "expensive" strides to upgrade their systems in a bid to reach international standards.

Shandong Airlines recently launched a state-of-the-art travel program offering its corporate clients the Universal Air Travel Plan (UATP) system, a payment network privately owned by 250 airlines, but used by only two in China.

The company did not release information on cost of the upgrade, but insiders said the figure was very high.

Leading domestic e-payment service YeePay is a partner in the effort.

"YeePay will provide comprehensive solutions for Shandong Airlines account holders," said Tang Bin, CEO of YeePay. "It will enable companies of all sizes to hold Shandong UATP accounts and use detailed program data offering travel management solutions to corporate clients."

Despite the high cost, "the niche technology will boost our business - so early is better", said Ma Xiaoli, the airline's sales and marketing general manager.