Difference #1.

The initial aims of Chinese ERP implementations invariably reflected the need to demonstrate tangible benefits. SOEs typically had a low preexisting level of process automation. Existing IT applications were restricted to financial accounting and very basic inventory control. A prerequisite need to consolidate activities across functional areas inhibited the streamlining of entire processes. As a result, their ERP efforts aimed to increase consistency and reduce costs like overhead. No SOE project aimed to generate new revenue sources or achieve end-to-end supply chain management. PVs had comparatively higher existing levels of IT application. Online databases for customers and materials were common. Their ERP implementations were thus able to build upon a solid foundation of semi-standardized and partly automated processes. Further enhancing standardization and automation was a common aim. However, PV leaders typically perceived ERP as part of a comprehensive and continuous effort to enhance their supply chain management and adopt the best business practices.

Difference #2.

Top managers in PVs were more actively involved in ERP projects than their SOE counterparts. PV leaders envisioned ERP as a bet-the business initiative and viewed their own clearly demonstrated commitment as a critical success factor. In contrast, top SOE managers were commonly reluctant to become directly involved in the ERP project. This reluctance can be attributed to the prevalence of hierarchical authoritarianism in Chinese societies. Top managers enjoy status and power primarily because they are greatly respected by their subordinates. This respect would be compromised if they demonstrated unfamiliarity and/or discomfort with an ERP implementation. By delegating ERP responsibilities to middle managers, they implicitly signaled that the ERP project was not that critical to their organization.

Difference #3.

Each PV had a cross-functional steering committee. This committee met frequently and made decisions based on a majority vote or, less commonly, through a group consensus. Resistance was reduced by getting users involved early in the project and providing significant rewards for meaningful contributions. In contrast, SOEs had a much more centralized management structure. A small group of senior managers (usually the oldest rather than the most capable) tended to control rather than supervise the ERP project. Cross-functional conflicts and user resistance were often suppressed rather than resolved. This observed difference highlights two issues: the need to distinguish clearly between the management of a project, by a designated individual, and the supervision of a project, by a steering committee; and the clear benefits of being proactive when addressing both cross-functional conflicts and user resistance.

Difference #4.

PVs were more likely to hire consultants, and their external contractors tended to have considerable experience, both with IT in general and ERP specifically. These consultants demonstrated an ability to guide ERP projects forward at critical junctures by drawing upon their expertise to resolve problems and conflicts. SOEs had limited experience with consultants. SOE managers worried their competence would be questioned and authority undermined if they hired consultants. They rarely engaged outside help, and their consultants tend to be IT generalists, not ERP experts.

Difference #5. PVs commonly adopted a crossfunctional focus and applied ERP modules across their entire organization. Similar efforts in SOEs spawned functional conflicts. The accounting and finance department often squabbled with either the purchasing or manufacturing department, while the latter two departments argued among themselves. These conflicts moderated the application of ERP and demonstrated the importance of the "danwei" in SOEs. This internal union tends to protect employee and work group interests at the expense of broader economic interests.

Difference #6.

ERP implementation was also faster in PVs. They introduced more software modules simultaneously and cut over to the ERP system at once rather than operating old and new systems in parallel. In contrast, SOEs implemented their ERP in phases. SOE managers tended to rely greatly on personal relationships and their own intuition. They commonly resisted change and were reluctant to trust an impersonal system. The relative inexperience of SOEs with automation and standardization also tended to limit the tolerable pace of change. This elaborates previous findings that incremental and continuous change is preferable to radical and episodic change in China.

Difference #7. SOEs had comparatively more data maintenance problems after adopting the ERP system. These problems tended to reflect the neglect of material and customer data issues during the project. Many SOE employees worried about their job security, particularly after the ERP system was implemented. Their priority was continued employment at the SOE or finding a new job rather than making the IT application work. Akin to a case in Hong Kong, SOE employees were also reluctant to assume responsibilities associated with empowerment. The non-management employees of non-state ventures contributed comparatively more to the success of ERP projects than their SOE counterparts. These PV workers were less distracted by personal issues, more comfortable with empowerment, and motivated by more attractive incentives for useful contributions.

Difference #8. PVs had higher degrees of satisfaction with ERP implementations. PV managers developed a solid understanding of the interactions between different organizational elements. They measured ERP costs and benefits and offered considerable rewards for superior outcomes. Each of the PV cases improved production quality while reducing inventory levels and unit costs. Post-ERP performance improvements in SOEs were less impressive. Although cost reductions were common, quality or supply chain enhancements were rare. The entrenched mind-sets of SOE managers and workers were identified as a major obstacle to fully realizing the potential benefits of ERP.