Research Of Enhancing The Enterprice Resources Planning Using Finance Company

It’s a fact that70%of the world’s top500companies have their own financecompanies. Finance companies have broad scope of business and play significant roles inthe capital market. Chinese finance companies, as non-bank financial branches of largegroup, stringently supervised by China Banking Regulatory Commission (CBRC) are allset up by internal fund-raising. Though Chinese finance companies underwent a rapiddevelopment the past two decade, compare to those of developed countries, they still havelong way to go.Chinese large group usually have much multi-level companies which are cross-sectoral and cross-regional. The parent company can improve enterprise efficiency ofresource allocation, reduce the financial risk of the group as a whole to strengthen the corecompetitiveness and finally realize the overall strategic objectives.Based on the combination of internal capital market theory, transaction cost theoryand integration of industry and financial theory, this paper analyzed developments of sixsample central enterprises’ finance companies to find the main problem they have. Then,the author started with choosing original data as indicators and used data fromquestionnaires and expert scoring to execute Delphi method analysis and principalcomponent analysis. After a number of scientific and effective convergences, the authorchose the concentration of funds, the rate of capital loans and execution of strategy forindicators to construct model for evaluating the improvement of finance companies’efficiency of resource allocations. According to this model, the author chose China GeneralTechnology (Group) Holding, Limited as unit sample to analyze the resource allocationconditions in the past three years to conduct horizontal comparison analysis, and then usedsix samples’2010resource allocation efficiency to conduct vertical comparison analysis.Those two applications not only verified practicality and feasibility of the model, but alsoproved the high correlation between the three indicators and resource allocation efficiencyof finance company. The last part of the paper is the conclusion.As the finance companies’ developments and masteries in China, we should be awareof that there is a underlying potential capital market inside the group. It’s a inevitable trendfor large groups to build a internal financing platform to realize the centralizedmanagement of capital. The model this paper used has a broad prospect of applications. Ithas great practical significance for the discovery of improving the companies’ resourceallocation efficiency using finance companies.