DEPLOYING NETSUITE IN CHINA PART 4- REPLACE YONYOU AND KINGDEE

2021-04-20

WHAT ARE YONYOU AND KINGDEE?

Yonyou and Kingdee are the two most widely used Chinese ERP/accounting system brands. Each system’s core offering is a financials management module (GL, AR/AP etc.) and over the years each company has attempted to compete with mature ERP systems by adding other modules to cover areas of business.

Yonyou and Kingdee are widely used in China; the functionality and user experience of each system is designed with Chinese accounting standards and practices in mind, and each facilitates preparation of China GAAP compliant tax reports. Most international ERP systems (including NetSuite) do not offer out of the box functionality to support certain essential aspects of financials management in Mainland China. As a result, many users of global ERP systems such as Oracle and SAP still use Yonyou or Kingdee in parallel with their global system of record for their China operations.

One of the major weaknesses of Yonyou and Kingdee is that while their report templates are tailored to comply with China GAAP, their management account reporting functionality is weak, preventing executives from using the system for sophisticated control and business analysis. Compared with NetSuite’s instantly available real time reports, retrieving relevant business data from these systems is also difficult and time consuming, especially if it is maintained on multiple server instances for different entities or office locations.

REPLACE, OR INTEGRATE WITH NETSUITE?

To manage financials in compliance with China GAAP, NetSuite users with China operations have to choose between:

  1. Retaining their existing Yonyou or Kingdee accounting system and automating financial data transfer to NetSuite for rolled up consolidated financial reporting and management accounts
  2. Replacing Yonyou or Kingdee entirely with NetSuite using customized applications developed on NetSuite’s platform that provide the required functionality for China financials management

TRIGGER NETWORKS’ RECOMMENDATION: RETIRE YONYOU AND KINGDEE AND REPLACE WITH NETSUITE

Our position is that there is no significant advantage for NetSuite users to continue the use of Yonyou or Kingdee in China, or any separate tax reporting system. Many NetSuite users in China have replaced these systems entirely with NetSuite with no loss of critical functionality for financials management. The combination of Trigger Networks’ NetSuite-native China GAAP reporting solution and Golden Tax system connector makes the functionality for China financials management offered by Yonyou and Kingdee redundant.

NetSuite is an all-in-one global financials management system. Just as NetSuite users can replace legacy systems for western subsidiaries, such as Sage, Quickbooks and other applications, so too can NetSuite replace Chinese accounting applications based on outdated, unscalable single-tenant software technology.

Below is a table comparing the advantages and disadvantages of integrating versus replacing these systems:

OPTION BENEFITS CHALLENGES
 RETAIN YONYOU OR KINGDEE AND CONSIDER INTEGRATION WITH NETSUITE VIA SOFTWARE CONNECTOR

Continuity: assuming that the connector is a simple upload of data to NetSuite from the system for management account purposes, little onboarding is required to introduce staff to a new system.

No significant increase in end user workload during the short term.

NOTE: Neither of these benefits will apply a company plans to use NetSuite for operations management (managing business transactions, customer data etc.) in China and retain Yonyou or Kingdee for tax reporting purposes. In this scenario, the workload would be LARGER than replacing these systems with NetSuite.

Running multiple systems in parallel incurs additional maintenance and management time costs, as all upgrades on Yonyou and Kingdee must be performed manually. Yonyou and Kingdee are based on older C/S technology, so they are much more difficult to customise and integrate with other systems. This means they are not future-proof systems that may create future bottle-necks if system requirements change.

Yonyou and Kingdee do not offer true real time reporting as they require separate databases for multiple locations. This means that even local Chinese teams do not have full visibility on critical business data, let alone global HQ.

There has been a lot of negative feedback from users on Yonyou and Kingdee’s reporting functions due to data integrity issues and manual data cleansing requirements before financial data can be rolled up to consolidated reports. This often means an overall higher workload for end users over the long term.

For China Golden Tax VAT Invoice Integration, neither Kingdee or Yonyou offer significant advantages compared with implementing connector directly to NetSuite

REPLACE YONYOU OR KINGDEE AND EXTEND NETSUITE FUNCTIONALITY WITH SUITEAPPS FOR CHINA REQUIREMENTS

You can reduce the number of systems managing your critical financial data and processes to one. Numerous companies in China have already replaced Yonyou and Kingdee with NetSuite entirely with no issues.

Managing your business entirely on NetSuite makes it easier to deploy new operations management processes for China (CRM, manufacturing, SCM, project management etc.) with no need to deploy functionality across multiple, separate systems.

Customized processes to suit unique business requirements are much easier to achieve on NetSuite’s flexible cloud platform than with Yonyou and Kingdee’s outdated C/S software architecture.

No need to worry about compatibility issues when each separate system is upgraded.

NetSuite is designed specifically to manage global financials and consolidated reports

Although mapping solutions allow generation of China GAAP tax reports, NetSuite chart of account management processes not follow China GAAP, so Chinese staff need time to grow accustomed the the new system and its logic, which may require a change management program, especially if they are long term users of Yonyou or Kingdee.

Running two systems in parallel may be necessary until the transition and data migration is complete.