Working Capital Management Research Of Information Technology Enterprises In Different Stages Of Life Cycle

Since the1980s, the rapid development of revolution in science and technology ofwhich information technology(IT) is a representative, not only has contributed to theadjustment and upgrading of global industrial structure and promoted thedevelopment of world economy, but also has brought human into the information ageand accelerated profound changes of social production mode and consumptionstructure. At present, the key factor of the competition in the comprehensive nationalpower of countries all over the world is the competition of science and technology, sothe IT industry of which technology innovation is the main characteristic has becomethe pillar industry to promote the development of national science and technology andstrengthen the comprehensive national power. Compared with enterprises in otherindustries, the management of capital is a universal problem which IT enterprises facein the process of rapid development, and a considerable number of IT enterprises dueto lack of enough capital can not develop rapidly and well. Therefore, enhancingworking capital management and using capital effectively are the problems which ITenterprises need to pay attention to and solve. Good working capital management is tomaintain financial security and offer an important guarantee of profits of enterprises.Compared with strategies in working capital management of enterprises in otherindustries, strategies in working capital management of IT enterprises have their owncharacteristics, and to expound a series of problems and strategies in working capitalmanagement of IT enterprises in different stages of life cycle is of great significanceto improve the theory of working capital management and the theory of financialmanagement of IT enterprises. Therefore, this paper selects IT enterprises which havedistinctive characteristics, combines the theory of different stages of life cycle withthe theory of channel management of working capital, studies in depth strategies inchannel management of working capital of IT enterprises in different stages of lifecycle, and further analyzes a case, which aims to explore strategies in channelmanagement of working capital of IT enterprises in different stages of life cycle.This paper selects31IT listed companies in stock markets of Shanghai andShenzhen as a research object, refers to domestic and foreign scholars’ research of lifecycle, selects the relative growth index as the indicator of a division of life cycle, andmakes empirical analysis of law of life cycle of31IT listed companies from2001to2010. Combining the theory of channel management of working capital, the papermakes empirical analysis with data of31IT listed companies from2007to2010, toexplore strategies in channel management of working capital of IT enterprises. Finally,in the form of case studies, the paper analyzes working capital management of Inspursoftware company in different stages of life cycle from2007to2010, to provide reference for working capital management of IT enterprises.Based on empirical analysis and case studies, strategies in working capitalmanagement of IT enterprises in different stages of life cycle summarized by thispaper are: In the newborn stage, in the purchasing channel IT enterprises shouldcontinuously improve purchasing channels and purchasing mechanism, and take greatefforts to improve the stability of the relations with the suppliers; in the productionchannel IT enterprises should speed up production processes and auxiliary processes,and improve the efficiency of production; in the marketing channel IT enterprisesshould plan sales channels and sales levels, increase the propaganda of new productsand expand customer base. The key is increasing technical research and developmentand making the products in this stage and subsequent stages have a strong competitivepower. In the growing stage, in the purchase channel IT enterprises shouldconsolidate the relationships with the original suppliers in the purchasing channel,expand the scope and the quantity of the new suppliers, and then establish the bestpurchasing channel and purchasing mechanism, and they can also use the commercialcredit properly to reduce the prepaid accounts; in the production channel ITenterprises should establish the perfect production processes and auxiliary processes,and pay attention to the management of other receivables, other payables and wages;in the marketing channel IT enterprises continue to increase the propaganda of newproducts, expanding customer base, focus on potential customers, expanding marketsegment, and constantly adjust and improve sales channels and sales levels for thecharacteristics of rapid growth of market. The key is on the basis of continuation oftechnology research and development，results of research and development can bequickly converted into products and mass production. In the mature stage, inpurchasing channel IT enterprises should consolidate the relations of long-termstrategic cooperation with supplier on the basis of the best purchasing channel andpurchasing mechanism established, and make full use of the commercial credit toreduce a large number of prepaid accounts; in production channel, for the perfectproduction processes and auxiliary processes have been established, the main is toenhance the management of other receivables, other payables and wages; in themarketing channel IT enterprises should establish a good relationship of cooperationwith downstream customers to maintain market share, and use the good corporateidentity to increase deposit received. The key is to pay attention to technologyresearch and development and service marketing, and enhance service marketing stepby step. In the recession, IT enterprises need to enhance marketing, and reduce thematerial in purchasing channel and products unfinished in production channel. Thekey is enhancing service marketing so as to improve market share by service.