Setting up a system can be costly and complicated, but the problems are not insurmountable NOTHING PUTS MORE fear into executive management than the idea of implementing an ERP system. Enterprise resource planning is not just a mouthful to say, the system is viewed by many business managers as a waste of money. The idea is simple enough: take all your paperwork and diverse computer systems for accounting, ordering, payroll, shipping, inventory, bills of lading and everything else you need to run your business, and put it in one huge database with a simple interface. That, more or less, is what an ERP implementation entails. A successful ERP system can truly simplify and help a company, but it can also cost a great deal of money. And if the slightest thing goes wrong in the implementation, it may be useless. For many Hong Kong companies with cross-border business, the task of setting up an ERP system carries a whole new level of complexity. A company with its headquarters in Hong Kong and its manufacturing base in Shenzhen, for example, would need an ERP system that conforms with the laws of the two different jurisdictions and supports traditional and simplified Chinese characters. Chinese law can be extremely complex and creating an ERP system that will work both on the mainland and in Hong Kong can be difficult. The laws governing accounting, taxation and human resources in the mainland are far more complicated than those in Hong Kong. If you try to take a system that was created and set up in Hong Kong and use it on the mainland, it will not do everything it has to. Toa Charm, general manager for Asia-Pacific at Kingdee International Software Group, a Hong Kong-based company that specialises in ERP solutions, said cross-border solutions might take more work but they were not impossible to create, particularly if there was a support system in place. 'One of the main considerations would have to be local support, and I mean that both geographically and culturally,' he said. 'There are lots of statutory requirements in China that you would have to know about in order to set up an ERP system that dealt with a factory in Shenzhen, for example. 'Then there is support in the traditional sense. One of the reasons for our success is that we have people on the ground here and on the mainland who can help. 'For many companies, that is a big consideration.' According to Mr Charm, the most important thing is patience and education. 'Most SMEs are confused about ERP; they really do not understand what it is or what it can do,' he said. 'We must act a bit like a teacher or doctor. We must educate them and then show them that it really is worth the expense,' he said. 'Most companies here and on the mainland start off really small. They buy an accounting program and then hope they do enough business to expand. 'Only after they have been in business for quite some time and are doing well, would they even consider an ERP solution.' As smaller companies begin to realise that the spreadsheet, although valuable, cannot do everything, they find that they are being nudged towards ERP solutions. They will also find that their competitors are moving in that direction, and so are their customers and partners. Mr Charm said that this was likely to provide far greater motivation for a company to change than anything else. ERP systems are not usually thought about unless there is a clear justification for the expense and the disruption to daily work they will cause while being implemented. However, if an ERP system is viewed as necessary to survival, it may be approached with more energy and commitment. 'ERP will increasingly become more important for SMEs,' Mr Charm said.