How to Improve the ERP Application in China Construction Enterprises

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I. ANALYSIS
OF CONSTRUCTION
ENTERPRISES ERP APPLICATION

Construction industry is a mainstay industry of the national economy, China currently has more than 70,000 construction enterprises, to date; successful applications of ERP in construction enterprises are relatively rare. Some construction enterprises invest substantial human and material resources in enterprise informatization, yet ultimately ended in failure; by applying information system some construction enterprises partially realize management informatization, but do not give enterprises an obvious advantage.
But some construction enterprises achieved a very good effect in ERP application. From August in 2002 Fujian Industrial Equipment Installation Co. Ltd, a medium-sized state-owned construction enterprise has invested nearly 20 million Yuan RMB and has spent nearly a year and a half and finally applied an international famous ERP system ---the SAP ERP system. By the help of a well-known international management consulting firm PricewaterhouseCoopers counselling the whole company has applied the SAP ERP software and has achieved success. In recent years, great changes have taken place in Fujian Industrial Equipment Installation Co. Ltd. The company has turned from "manual management" to "information management", the management quality has improved and has got a leap in development. The company turnover increased from 400 million Yuan in 2001 to 1.5 billion Yuan in 2004. Company profits have been grown synchronically. The company’s producing and operations have been in a good development situation.
What is the reason of successful application in construction enterprises? How to avoid failures of construction enterprise ERP application? Currently there are wide-ranging debates. Some people considered that the reason makes the ERP application failure is that information technology and the condition of construction enterprises is not mature for application, we need to wait for.
Some also expressed that since there are some successful ERP system applications in construction enterprises it could be said that it is the time to apply and the error application methods make the failures. If we use the correct methods, we will success. Some people think it is too expensive to apply the ERP system, small and medium-sized enterprises could not afford. Some people think it is caused by a lack of related professional staff. The writer believes that we can understand more thoroughly the nature of the problem and find the way to solve the problems if we analyse problems using knowledge transfer theory and analyse the knowledge transfer service process. This analysis is good for construction enterprises to improve the ERP application and for ERP development Company to improve the quality of products and services.

II. KNOWLEDGE
TRANSFER
THEROY

The ERP system application in construction enterprises is a knowledge transfer process. In this regard, knowledge transfer theory is a good guide. Knowledge Transfer Theory is one of the important components of knowledge management theory. Knowledge transfer theory researches mainly the knowledge transfer processes between the different people and different organizations and the transfer processes between different characteristic knowledge. In knowledge management theory knowledge is not only expressed in writing, in graphics or in mathematical formulas, that is the explicit knowledge, but it also includes tacit knowledge which hides in people's minds, in the course of action and in the people’s habits that the knowledge expression is difficult.
Knowledge transfer theory believes that in the related knowledge about some thing explicit knowledge is like the tip of an iceberg and most of the knowledge is tacit knowledge. For enterprise ERP system it is not only a tool, but also a way of thinking and a complete knowledge system. Thus the ERP software application in construction enterprises is far from operating the ERP software only, but also it contains a large number of tacit knowledge in ERP system. It needs to establish an environment for operation including the regulations and the rules of conduct, thinking models of management, decision-making models and so on. We also need to establish an enterprise culture and mentality models which is compatible with the ERP application, which is a very great task and the process is a very long.
Knowledge transfer theory believes that: any explicit knowledge presented by language and other way of expression have all depended on and supported by the existence of tacit knowledge. The nature process of mankind's understanding is a tacit process; we can not increase our knowledge of mathematics if we don’t understand it. Tacit knowledge is the core of human knowledge and content, explicit knowledge can only be the shape when it is expressed. For understanding the explicit knowledge it is a process for people to reconstruct using tacit knowledge. Since different people have different tacit knowledge, different people have different understanding for the same explicit knowledge, so different enterprises have different understandings for a same ERP system and different enterprises need different kinds of ERP system.
Knowledge reconstruction is a kind of active behaviour, in the process of knowledge transfer the learning desire and the attitude is critical factors to decide the study result
Japanese scholars Ikujiro Nonaka and Hirotaka Takeuchi believe that the transfer process between different characteristic knowledge and different body’s knowledge have four kinds, that is the transfer process of tacit knowledge to tacit knowledge (socialization), explicit knowledge to explicit knowledge transfer process (combination), the transfer process of tacit knowledge to explicit knowledge (externalization) and explicit knowledge to tacit knowledge transfer process (internalization).
The best way to learn Tacit Knowledge is to observe, exchanges and dialogues with others directly. Individuals gain new knowledge directly from others.

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