In response to US trade sanctions, Huawei switches to the self-developed MetaERP system

Huawei Technologies Co., a leader in Chinese telecoms equipment, announced that it has converted to its own enterprise resource planning (ERP) system. This is the company's most recent attempt to reduce its reliance on foreign-sourced technologies as it battles US trade restrictions.

Huawei, based in Shenzhen, claimed on Thursday that its new MetaERP represents "the most extensive and complex transformation project" it has ever undertaken. Thousands of people contributed to the creation of the business management software, which is based on an internal operating system and database that Huawei claims to have "complete, full-stack control" over.

All of a company's key daily business functions, including finance, human resources, supply chain, procurement, manufacturing, sales, and several other services, are effectively managed by an ERP system.

At a ceremony to honor as "heroes" all the employees and corporate partners who contributed to the firm's MetaERP project on Thursday, Meng Wanzhou, Huawei's rotating chairwoman and chief financial officer, said, "Innovation is only possible with an open mind, and thriving is only possible when we work together."

According to the privately held company, MetaERP has now taken over control of all of Huawei's daily operations and at least 80% of its corporate data after passing tests involving monthly, quarterly, and annual settlements.

The creation of MetaERP shows the extent Huawei has gone to in order to bolster its international operations as trade sanctions continue to bite and the business considers how to react to a US-China decoupling following claims that the Biden administration will cut Huawei off from all American suppliers.

Just days after Washington placed the Chinese company on a trade blacklist in May 2019, Huawei had received alerts from its ERP suppliers that their services will be banned. Tao Jingwen, a member of the Huawei board of directors and president of the company's quality, business process, and information technology management department, warned at the ceremony on Thursday that "any issue with the [ERP] system would threaten to paralyse the ‘nervous system’ of our entire business,."

Three years ago, according to Tao, "we were cut off from the old ERP system and other core operation and management systems. Today, we are proud to announce that we have broken through that blockade. We have survived!"

Ren Zhengfei, the founder and CEO of Huawei, first announced the rollout of MetaERP in a lecture that was released last month. In the same address, Ren said that Huawei has redesigned over 4,000 circuit boards and swapped out over 13,000 components in its line of goods in response to US trade sanctions during the previous three years.

The switch to MetaERP is in keeping with Chinese President Xi Jinping's earlier push for tech independence, including homegrown software and operating systems to replace imported ones.

Before Washington's Entity List limitations were placed on Huawei in 2019, the US enterprise software giant Oracle Corp. was one of Huawei's long-term ERP providers. After the US Department of Commerce claimed that Huawei was "engaged in activities that are contrary to US national security or foreign policy interest," the Chinese company was prohibited from doing business with US companies.

With tighter trade restrictions imposed by Washington in 2020 encompassing access to semiconductors designed or built using US technology, Huawei has hurried to modify its production of smartphones and telecom network equipment.

Regarding whether it will ever make MetaERP available to outside clients, Huawei declined to answer.

After US sanctions crippled its formerly profitable smartphone sector, Huawei may be able to further diversify its operations by entering the commercial ERP market. Due to demand in its home market, the business continues to be the largest supplier of telecom equipment worldwide.

The business has accelerated the creation of domestic replacements for electronic components, an initiative that started a decade ago - long before it was sanctioned by the US, said Eric Xu Zhijun, Huawei's rotating chairman, last month. He omitted, however, to give an update on how the business was doing with its search for new smartphone chip replacements.

According to a report by Counterpoint Research, Huawei eventually ran out of internal-designed semiconductors for its smartphones in December as a result of US trade sanctions that curtailed the company's access to advanced new chips.

By fLEXI tEAM