As stated by Bocij et al, in 2005, LG Electronics partnered with Oracle and LG CNS on a five-year project to develop, design, test, and implement a new management platform that utilizes a single global instance of Oracle E-Business Suite R12. LG Electronics had an in-house enterprise resource planning (ERP) system that was constructed differently for each facility and each office utilizing a distinct version of the ERP. LG CNS designed the new infrastructure, implemented the application globally, and maintains the system after its implementation.
LG Electronics was assisted by Oracle’s Solutions Support Centre to handle queries on the implementation process and monitoring its progress. Before the Oracle system stabilized, a hotline was put in place to enable fast communication in case of any problems arising.
The project team and users were assigned to do information and system testing and did over two thousand test scenarios, on five different occasions before the deployment of the system. Since the initiation of the project senior managers from LG Electronics, Oracle, and LG CNS meet regularly to analyze the progress of the project and make decisions on whenever a problem is encountered or any deviation from the original plan.
In January 2008, LG Electronics facilities located in Korea and Australia were the first to launch the new Oracle system; thereafter, in August 2008 facilities in England, Indonesia, and Germany implemented the same. Currently, LG Electronics uses the 5TB database in maintaining the Oracle Enterprise Resource Planning system which supports over eighty thousand users accessing the system every hour and this is expected to by 1 TB every month.
Before the implementation of the new system, LG Electronics did not share common activities across business units; it has adopted the modular implementation alongside the ERP process which focuses to limit to restrict the scope of execution to one functional subdivision and ensuring that the departments function independently from each other. The firm could not make comprehensive progress on inventory management, human resources, and other important operations units across its worldwide facilities.
LG Electronics establish the independent modules of the ERP formulation in each department while the incorporation of the ERP module is integrated at a later stage in the project life cycle. Aitken states that the modular implementation cuts down the extent of ERP integration into the whole system thus the risk undertaken in the customization, setting up and introduction of the ERP formulation is reduced tremendously.
The function of the ERP implementation system is to treat the implementation of a large-scale information module that adheres to the systems development life cycle. Although the ERP system adopted by LG Electronics is more of a traditional information procedure, its implementation has led to the realignment of the firm’s business processes.
The big bang methodology is aimed to cut down the integration cost in the situation of keen and thorough execution. The implementation of this project will enable the company to initiate, integrate and develop distinct business operations. The ERP system will enable the company to close in distant operations and standardize its operations globally.
The project is supposed to be fully put in place by 2011. The company expects the project to cut down reporting time from six to three working days, reduce profitability analysis delays from six days to three days, reduce the ERP maintenance costs by 36 percent, increase the company’s productivity by 20.5 percent, and assist the company in attaining its objectives.
