"How can you still manage it when you have 700 companies in the future and then the ERP software won't be cumbersome as the company grows bigger and bigger?"

A simple statement but shows the foresight of Mr. Doan Hong Viet - Chairman and General Director of Digiworld (HOSE: DGW) _ in a conversation with Ms. Dang Kien Phuong _ Deputy General Director of the Company.

That was about 10 years after its founding, a time when DGW developed rapidly and achieved consecutive achievements. However, the company's leaders are always worried: "When the revenue is 100 billion, we hire 100 employees. But if the revenue is 5,000 billion, what should we do so that the number of employees is only 500?”

DGW's leadership at that time determined that only by improving management capabilities from a time when the enterprise scale was not yet large could it be able to move forward steadily.

With that vision, from 2006-2007, the Company's Board of Directors began to think about investing in a standard ERP system (Enterprise Resource Planning), replacing the old system that cannot meet the revenue leap goal that comes with keeping the business structure lean.

Ms. Phuong, as Deputy General Director of Operations - who understands all the Company's operating processes, has led the implementation of the SAP ERP project (system developed by SAP SE company, Germany) in DGW.

According to the representative of DGW, although implementing SAP ERP (referred to as ERP) early, before that, the Company had a clear and strict operating process, thanks to which there was no big difference in business operations after applying an advanced management system.

Of course, although DGW has many advantages, the innovation process is not always easy. First, DGW's business and accounting departments also encountered many difficulties. But "without ERP, there would be no story of managing the volume of goods with increasing sales and output, but the number of employees does not increase", a DGW representative shared.

And those are not all the benefits that this professional management system has brought to DGW.

ERP _ sword and shield

For a market development service (MES) provider like DGW, financial and logistics management capabilities are two important factors that create competitive advantage. ERP has helped enhance these capabilities of DGW.

Regarding inventory, ICT is an industry with products that decrease in price quickly over time. ERP gives DGW the ability to manage inventory age in real time (first in, first out), so businesses can make quick decisions to optimize profits. “ERP also helps us manage each product such as 'police and household registration'. A product that has been recorded in DGW's system, no matter how many times it is delivered to the warehouse, sent to an agent, or returned, will still have a full history recorded and the important thing is still to be identified as the original product, not another product".

Inside DGW's warehouse in Ho Chi Minh city

Along with that, the ability to determine debt age thanks to ERP has helped the Company optimize financial work and manage cash flow better. This helps reduce the manual work of all departments, so employees will focus on complex tasks that require more of their soft skills, according to a DGW representative.

The technology distribution industry (ICT) is inherently a business with low profit margins, effective management of costs has helped DGW significantly improve the business's profitability.

Another core advantage that DGW gets from ERP is transparency. “The investor relations (IR) award we receive is for our seriousness in disclosing information to shareholders, but it is the transparency in management thanks to the application of ERP that creates honest financial reports. DGW is transparent in every number!”, the Company representative affirmed.

This transparency also gives DGW many advantages. “For banks, this is a plus. Businesses that own ERP systems are evaluated by banks for their high record transparency, thereby building trust and receiving approval from banks."

“We also receive great attention from manufacturers and brands. They all need "clean" data from distributors to analyze and build market development strategies. In addition to those needs, they also need to have reports that are quickly and promptly adjusted according to actual requirements that arise, instead of having to wait until monthly. With this ERP system, DGW completely captured their hearts."

Vietnam has an extremely potential domestic consumer market. Transparency in administration and professionalism in operations will be one of the points that make DGW stand out in the list of partner options for brands wanting to enter this market.

Returning to the ERP story, DGW representative shared that in 2018, the Company upgraded the ERP system to operate faster and serve CL company more - an extended arm to the fast-moving consumer products market (FMCG) of DGW.

Currently, DGW said it has invested in a sales distribution chain management system (DMS _ Distribution Management System) connected to ERP. This system helps the Company manage the flow of goods sold or remaining in sales channels and the strengths/weaknesses of each channel, a DGW representative shared.

“In the near future, we will also develop a Transportation Management System (TMS). The TMS system will help us calculate travel distances well and coordinate orders more scientifically. DGW will reduce shipping costs, increase supply chain efficiency, and especially increase customer satisfaction when they can proactively track orders with us."

According to vietstock.vn