Chinese companies are increasingly using ERP systems as a way to demonstrate reliability to foreign customers, says Scot McLeod, marketing vice president at Ross Systems Inc., an Atlanta-based ERP vendor. "Especially if they're producing goods for export, there's hefty demand to provide assurance to their customers that it is a quality product and that they will be able to deliver it in a timely fashion," he says. Ross, which has about 150 customers in China, was acquired by Hong Kong's CDC Corp. in 2003.

But in China, all ERP systems are not created equal. They must be equipped to handle double-byte characters, since written Chinese is not alphabet-based. Most of McLeod's customers are multinational companies based in North America, Europe or Japan.

"The companies that come from overseas have a strong need to have systems that give them strong control and visibility," he says. "Especially if they're setting up operations for the first time, they're taking a risk. The quality of the labor is a risk; the quality of the local management is a risk. They're looking for ways to reduce the risks that they are taking. By putting a system in place, it gives them the control they need to do that."

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IT in China: different strokes