Huawei sales revenue is expected to reach 520 billion yuan, registering a growth of 32 percent in 2016.
Huawei has put in place a more streamlined delivery process, the ISDP, improving delivery efficiency and quality. In 2016, Huawei achieved consistency of inventory accounts and goods, and made significant progress in administrative services.
In 2016, Huawei’s carrier business reinforced its position in network products and services. With cloud, video, and operations transformation as strategic priorities, Huawei helped grow the industry and move it forward. Huawei has significantly boosted the working capital efficiency of its carrier business while maintaining robust growth.
Enterprise business of Huawei has delivered innovative ICT products and solutions to help customers address the challenges of digital transformation. Focus areas of Huawei enterprise business were smart cities, energy, finance, transportation, and manufacturing.
An intelligent world is on the horizon as new technologies like cloud computing, the Internet of Things, video, big data, and AI advance at blazing-fast speed. Carriers around the world are gradually shifting their network construction models from an investment-driven approach to one that is more value-driven.
Huawei will work with carriers’ to support more connections; help them position video as a basic service and achieve business success; lead the transformation of their IT systems towards cloud architecture; and assist them in building digital operations that deliver a real-time, on-demand, all-online, do-it-yourself, and social (ROADS) user experience.
Digitization in verticals will open up opportunities for Huawei to reshape the ecosystem. Huawei will leverage these opportunities, value the interests of partners, and build open platforms that are resilient, flexible, and secure.
Huawei CEO says the company must sustain profitable growth and maintain healthy cash flow. The key to this is to improve quality, especially the quality of our contracts and operations. Huawei has realized double-digit revenue growth over the past few years. But there has not been improvement in our operating efficiency and cash flow.
Huawei’s general and administrative expenses have grown faster than its revenue and sales gross margin, and its cash to revenue ratio is on the decline.
“All business units must pursue profitable growth and healthy cash flow. To do this, they must make every effort to increase operating efficiency, reduce general and administrative expenses, manage long overdue inventories and accounts receivable, and improve cash flow,” said Eric Xu, rotating CEO at Huawei.
Representative offices must become true profit centers, with all the corresponding responsibility, authority, and benefits. Resource-wise, Huawei needs to optimize our planning, budgeting, and accounting management systems to ensure reasonable resource allocation and allow representative offices to better manage, control, and develop their operations.
The consumer business must stay focused on profit. It must remain committed to building a high-end brand and establishing a well-functioning retail channel system. Solid IT systems should be deployed to support business operations. An oversight system should be built around the consumer business to cover all aspects of operations.
Project operations and contract quality are the fundamental building blocks of Huawei’s business. Contract quality is particularly vital, as any improvement in this respect will lead to more solid operations, helping us attain our goals in a high-quality, efficient, and cost-effective way, with risks under control.
Huawei CEO says the company must avoid unnecessary formalities. It should focus on creating value and solving problems for our customers.
Main plans
# Cut down on empty and extravagant marketing events and conferences; have more meaningful meetings with customers to address their real problems
# Talk less about trends, vision, and new concepts; develop more scenario-specific summaries and case studies based on our practices, experiences, and lessons learned
# Have fewer empty talks in offices that are far removed from actual business; pay more visits to equipment rooms, base stations, street cabinets, and shops
# Avoid blind optimism and rhetoric about Huawei as an industry leader or how it has entered uncharted territory; give due respect to uncertainty and prepare for the unknown with more independent thinking
# Avoid demonstrations of “value” to managers, with fancy internal promotional videos and slides; focus on creating value for customers
Huawei will refine performance appraisal mechanism to encourage the right approach to work and help focus every effort on creating value for customers.
Huawei will build capabilities around strategy and changes in business to help customers rise above their challenges and difficulties.
Huawei will optimize ability to deliver business consulting and integration services, and develop capability to maintain and operate the complicated networks of the future.
Huawei will optimize the structure of workforce to support IT transformation, deploy its capabilities around the world, and build centers of expertise for research, innovation, precision manufacturing, and risk control in places where strategic resources abound.
editor@telecomlead.com