Kingdee speeds up AI push for rapid tech advancement

Kingdee International Software Group Co Ltd, a Chinese software industry pioneer, has stepped up efforts to embrace artificial intelligence, with the aim of revolutionizing its products and solutions as well as cultivating new quality productive forces for the country's software sector.

As industries evolve in an era marked by rapid technological advancements, leveraging new ideas, methods, tools, technologies and elements is imperative, said Xu Shaochun, chairman and CEO of Kingdee.

"In the past, growth was driven by labor, capital and energy. However, in the future, data will emerge as a critical element in digital transformation, gaining increasing importance among enterprises. Consequently, Kingdee is committed to nurturing new quality productive forces to support high-quality corporate development," Xu said.

Kingdee, which has been offering management software and services for companies for over three decades, is focusing on its "subscription priority, AI priority" strategy this year to help enterprises accelerate their digital transformation, he said.

Xu said that the key to developing a digital economy lies in driving enterprises' digital transformation. This involves utilizing new technologies and concepts to develop next-generation enterprise management digital platforms, thereby enhancing enterprise business capability. This encompasses data-driven business operations, customer service and engagement, partner empowerment, asset management and employee enablement.

Xu's remarks were echoed by Kitty Fok, managing director of International Data Corp China.

Fok said China's digital transformation was mainly focused on the consumer level in the past, such as mobile payments, e-commerce and video-streaming platforms.

This means there is huge potential for companies in the country to accomplish their digital upgrade as a whole.

IDC has forecast that 51 percent of global IT budgets will go toward digital innovation and digital transformation by 2024, while that number in China is estimated to be above 70 percent.

Specifically, China's investment in AI is forecast to reach 273.9 billion yuan ($38.1 billion) in 2027, accounting for 9 percent of the world's total, IDC said.

The Ministry of Industry and Information Technology, China's top industry regulator, has also said that it would launch an "AI plus" initiative to promote the application of the technology in more sectors.

That would spell significant opportunities for companies like Kingdee.

"In the realm of financial management, AI has revolutionized the traditional framework, and the shift from experience-based forecasting to AI-precise forecasting represents a significant change," Xu said.

According to him, while traditional methods rely on subjective experience and limited data, AI integrates big data correlation analysis and deep learning, enabling more accurate revenue, cost, profit and risk predictions. This adaptability to changing environments and needs exemplifies the profound impact of AI.

Moreover, the scope of expert service management has expanded from relying on individual experts to utilizing AI "teams". In specialized areas such as taxation, treasury and capital operations, AI can now provide cross-industry, multiskilled solutions, akin to having numerous experts at one's disposal, Xu added.

For instance, Kingdee said its collaboration with a bank employs multi-feature recall and financial model technology to automatically screen transaction data daily, aiding enterprises in preventing fraudulent trade risks.

"The introduction of AI also transforms workforce dynamics. A finance department originally staffed with 500 employees can now achieve the output of 1,000 people, with AI significantly enhancing productivity. Conversely, AI can maintain the department's capabilities even if the workforce is reduced to 200, showcasing its value," Xu said.

In May 2024, Kingdee launched its intelligent AI management assistant, Cosmic, and upgraded its Kingdee Cloud Cosmic platform into a new-generation enterprise-level AI platform. Notable collaborations include Chinese property developer C&D Real Estate Corp Ltd, which has partnered with Kingdee to develop a contract management system powered by AI, marking a big boost in work efficiency.

Similarly, Hisense Group and Kingdee co-created AI applications in human resources management.

As of March 31, Kingdee International reported an annual recurring revenue of about 2.98 billion yuan from cloud subscription services, a 28 percent year-on-year increase.

In the first half, Kingdee secured contracts with large enterprises, including China National Petroleum Corp, China National Aviation Holding Corp, Dongfeng Motor Corp, and Longfor Group.

The progress is the result of Kingdee's long-term emphasis on research and development. In 2023, Kingdee's R&D expenditure was approximately 1.44 billion yuan, accounting for about 25.4 percent of the group's total revenue.

"The goal is to enhance the digital management value of Chinese enterprises. By empowering our entire product line with AI, Kingdee aims for disruptive innovation, ensuring that every user benefits from an AI assistant," Xu said.