SIE unmanned factory demonstration line. Respondent provided pictures

Since difficulties and challenges are inevitable, find ways to turn uncertainty into certainty. Established in 2005, Guangzhou SIE Information Technology Co., Ltd. (hereinafter referred to as "SIE") is now a leading enterprise in the domestic industrial software industry. From being an agent of foreign famous industrial software at first to opening the road of independent research and development, from listing on the Shenzhen Stock Exchange to becoming the first batch of industrial software and blockchain product resource pool enterprises in Guangzhou, SIE Information has come along smoothly, but Zhang Chengkang said that it is inevitable for enterprises to encounter difficulties, and it is important to be fully prepared to face difficulties in consciousness and not be at a loss.

As the helmsman of SIE, the changes in the external environment in the past two years have made Zhang Chengkang more and more convinced that the digital transformation of the manufacturing industry is promising and is accelerating. "As long as the trend is right, stick to investment. You should know that difficulties are temporary, and only when you see the way ahead can you have confidence to face challenges."

The pressure on industry operations has significantly increased

Not long ago, SIE Information released the semi annual report of 2022. The report shows that SIE Information achieved an operating revenue of 1.026 billion yuan in the first half of this year, up 18.26% year on year, and a net profit attributable to shareholders of listed companies of 67.71 million yuan, up 22.8% year on year.

Since the outbreak of the epidemic, the external environment has posed unprecedented challenges to industrial supply chains, enterprise information collaboration, resource allocation, and operational efficiency, especially for manufacturing enterprises. More and more enterprises are realizing that through digital transformation, they can enhance information collaboration within the enterprise, upstream and downstream of the industrial chain, and between enterprises across industrial chains, achieve effective supply and demand docking, intelligent resource allocation, and reduce production and operating costs of the enterprise.

But for small and medium-sized manufacturing enterprises, they are often trapped by a series of problems such as funding, technology, and talent, and most of them face the dilemma of "not daring to transfer, not being able to transfer". At the same time, large and medium-sized manufacturing enterprises have accelerated the pace of digital upgrading in order to better respond to external challenges, which puts higher demands on the speed of functional iteration of industrial software products. In recent years, the industries such as home manufacturing, decoration engineering and home appliance manufacturing have been under great pressure, which has also had an impact on the business growth of SIE.

On the other hand, in the first half of this year, the domestic epidemic situation still showed a trend of scattered outbreaks and frequent occurrences in multiple places. The limited market circulation resulted in the inability to sign and stamp contracts with customers on site, causing delays in orders, but the operating costs did not decrease. For example, under the closed management in the past three months, SIE Information Shanghai Branch's human cost expenditure alone exceeded 10 million yuan. If office rent was added, the expenditure would be higher.

Fortunately, SIE Information took emergency measures at the first time, thus reducing losses, and still achieved growth in the first half of the year.

Environmental changes are uncertain factors, and as a company, we must first consider how to turn uncertainty into certainty. We need to build a strong organizational adaptability and have a sound management system and emergency mechanism to cope with this uncertainty. Only the stronger the internal system capability of the enterprise, the better it can survive in an uncertain environment, "said Zhang Chengkang.

02. We need to not only improve our internal skills but also gain insight into the market

In Zhang Chengkang's view, it is important to cultivate internal strength to ensure the sustained growth of enterprises. The internal management system construction mentioned above is an important part of 'internal strength'.

For example, in order to cope with online office scenarios that may occur at any time, SIE Information began to expand its technical team two years ago, from a dozen to nearly a hundred people, to provide support for the remote office of the entire enterprise. Now, even if it is impossible to predict when and how long the telecommuting will last, SIE Information is ready.

Another aspect of 'developing internal skills' is to continuously increase investment in research and development. Since 2012, SIE Information has embarked on the path of independent research and development of industrial software localization, especially after its launch in 2017. Because Zhang Chengkang believes that for a company to achieve long-term development, it needs to have its own core competencies and competitiveness. At the same time, SIE Information is also learning from and cooperating with international excellent companies, learning from each other's strengths to complement each other's weaknesses, and gradually realizing the same competition in some fields.

Now, SIE Information has launched the S-MOM industrial management software product family and the industrial Internet platform based on independent technology research and development in the field of intelligent manufacturing, which has achieved full coverage of the fields involved in intelligent manufacturing. Last year, the above products brought several hundred million yuan of revenue to SIE, with a considerable gross profit margin.

Now is a good time for enterprises to improve their internal strength. In the past, when they were developing rapidly, they were busy exploring the market. Now, we can look at how to do a good job in internal construction, how to reduce costs and increase efficiency through digital transformation, how to train talents, and so on. These things were not something that entrepreneurs used to have time to do before. After improving their internal strength, enterprises can achieve better sustainable development, "said Zhang Chengkang.

In addition to improving internal skills, companies also need to have insight into the market. In terms of industry selection, SIE Information has always focused on industries with better future trends. Although we currently provide services to 23 manufacturing industries, we will focus on high prosperity industries such as PCB, chips, high-end equipment, pharmaceutical equipment, etc. ”Zhang Chengkang believes that industries without competitiveness, even without the pandemic, will face great difficulties. For example, in recent years, the production and sales of traditional oil vehicles have both declined, but new energy vehicles are very popular because they are in line with the national trend of achieving the "dual carbon" goal.

It is reported that SIE Information will explore new energy digitization and other emerging fields, and increase cooperation with new energy lithium batteries, vehicle manufacturers, auto parts, photovoltaic and other large leading groups.

03 Find future incremental points and lay out in advance

SIE is still working hard on domestic industrial software, and constantly building competitive advantages and industry barriers in the output of solutions covering multiple scenarios and fields in the vertically integrated manufacturing industry.

On the one hand, SIE Information provides SMEs with cost-effective domestic industrial software, and provides them with integrated solutions of consultation and diagnosis+products+platforms+implementation services for their digital transformation, helping more SMEs find the best feasible transformation path. On the other hand, emerging technologies such as complex scheduling algorithms, XR mixed reality, and energy optimization based on wireless sensors can be quickly integrated into the manufacturing processes of enterprises to meet the needs of large-scale manufacturing processes and business models.

"The trend of intelligent manufacturing will not change. The difficulties are temporary, and we are optimistic about China's economy in the long run." Zhang Chengkang revealed that SIE's development strategy will not change much this year, and will continue to increase investment in research and development and talent.

According to the "14th Five Year Plan for the Development of Intelligent Manufacturing", by 2025, most of China's manufacturing enterprises above designated size will achieve digital networking, and key industry backbone enterprises will initially apply intelligence. The satisfaction rates of the intelligent manufacturing equipment and industrial software markets exceed 70% and 50% respectively. By 2035, large-scale manufacturing enterprises will fully popularize digital networking, and key industry backbone enterprises will basically achieve intelligence.

In 2021, industrial software was selected for the first time as one of the first key projects under the National Key R&D Program of the Ministry of Science and Technology. This means that industrial software suppliers will face significant development opportunities. The China Business Industry Research Institute predicts that the revenue of industrial software products in China will maintain a growth rate of 10% -15% in the next few years, and will reach 300 billion yuan by 2024.

Zhang Chengkang stated that regardless of whether the external environment is good or bad, companies with "resilience" must be able to withstand the test of internal and external crises, quickly make organizational adjustments, and achieve sustained growth.

The resilience of an enterprise cannot be forged overnight, it requires long-term accumulation. I believe that the foundation of resilience is that the management team of the enterprise needs to be fully prepared to face challenges, and resilience also comes from seeing the certainty of the future, that is, finding the incremental points of the future and laying out in advance. Even if it is not completely clear, we need to cultivate our internal strength and make good reserves. I believe that the future will become better and better, and we also have confidence in the international companies that have run into billions in China's industrial software field. We hope to become one of them, "said Zhang Chengkang.