 2011-01-03 |
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Interview with Reporter Ho Ying-Wei, Industrial and Commercial Times
The International Financial Reporting Standards (IFRS) will be implemented in 2013, and 1,500 listed companies in Taiwan will adopt a dual-track system next year. Syscom Computer (2471) General Manager Lin Sheng-Yi said that the implementation of IFRS will drive domestic companies to upgrade their ERP (Enterprise Resource Planning) systems. Syscom’s ERP products currently hold only a 5% market share among Taiwan's listed companies, but they aim to capture 15% of the market during this upgrade wave. Below is a summary of the interview.
Q: How much business opportunity can the implementation of IFRS create?
A: The proportion of listed companies in Taiwan that have implemented IFRS is currently very low. Since they are required to adopt two systems by 2012, these companies must complete the upgrade, purchase, conversion, and implementation of ERP systems this year. With an estimated budget of NT$5 million per company, this could drive at least NT$7.5 billion in business, not including additional opportunities such as accounting consulting services.
Q: What are Syscom’s expectations for the new IFRS system?
A: Syscom’s main business includes human resource systems, factory management systems, and ERP systems, with accounting systems integrated into the ERP software. Syscom currently acts as an agent for Oracle ERP products, and we also developed our own ERP software. However, our market share among Taiwan’s listed companies is only 5%, with the local ERP leader being Digiwin. Nevertheless, we are confident that with this year’s demand for corporate upgrades, we can increase our market share to 15%.
Q: Why is Syscom so confident in increasing its ERP market share?
A: Syscom successfully implemented IFRS for Taiwan’s largest tape manufacturer, YC, using our self-developed ArgoERP system, which was guided by the Ministry of Economic Affairs' first enterprise management demonstration project. Syscom's ERP system has proven successful, and our costs are far lower than those of international companies. Additionally, our competitors are currently focused on mainland China, giving us confidence in increasing our market share.
Q: Will the IFRS-driven business opportunity for software companies be concentrated this year, with less demand in the future?
A: This year’s ERP replacements and upgrades will primarily focus on listed companies, but the government aims for all companies to adopt IFRS by 2015. Although the demand may slow down after this year, if the government mandates IFRS adoption for all companies, there will still be significant opportunities. Additionally, software companies will continue to earn revenue from software maintenance fees.
Q: What is Syscom’s outlook on the market and opportunities in 2011?
A: Last year, thanks to the economic recovery, we saw a 30% growth rate in performance. This year, with companies adopting IFRS, Syscom’s revenue growth rate is expected to exceed 40%. However, we are even more optimistic about the growth potential of factory automation management systems in 2011, as Chinese companies are increasingly willing to invest in such products due to rising wages. Syscom has already successfully entered the mainland China market, including prominent LED factories.
Q: What is Syscom’s long-term vision?
A: Over the past 6 to 7 years, Syscom has gradually transformed, reducing its hardware product sales and focusing on software development, resulting in improved gross profit margins and profitability. We have already launched several key software packages, and we believe the most promising area for the future is factory management, especially given the growth potential of the mainland China market. |
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