A

PROJECT PREPARED
ON
BUSINESS TRANSFORMATION
& e-STRATEGY
OF

SUBMITTED TO: SUBMITED BY:

Dr. AJAI PRAKASH LOKESH KR SHRIVASTAVA(23)

SUB: BUSINESS TRANSFOR ARISH LAEEQ(12)
-MATION & e-STRATEGY AMAN SONKER(04)

MBA (e-BUSINESS)
SEM. - IV

ACKNOWLEDGMENT

We acknowledge our indebtness to my teacher Dr. AJAI PRAKASH who showed us the
right path, helped in increasing our horizon and clarifying our objective. Without his help
we can’t expect to prepare this project.

We are also grateful to our classmates for taking out their time to help us in our project.
They encourage us to indulge in finding out the information about business
transformation and E-strategy of LG Electronics.

We express our gratitude to various sites with the help of which we are able to show the
various information of the business transformation and E-strategy of LG Electronics.
CONTENTS

1. Overview

2. Vision

3. Growth Strategy

4. Core capabilities

5. Corporate culture

6. The amazing transformation of LG Electronics

• a new face: change in group identity
• optimizing the portfolio
• core competencies for growth
• models for growth
• reshaping organization and people
• renewing people

7. The high wire act

8. Strategic alliances

9. Business Domains

10. LG CNS (consulting and solutions)

11. IT Solution

12. Strategy

13. Bibliography
OVERVIEW
LG Electronics' innovative technologies, unique products, and cutting-edge designs are
an investment in the future.
Established in 1958, LG Electronics, Inc. is a global leader and technological innovator
of consumer electronics, home appliances, and mobile communications, employing more
than 82,000 people in over 110 operations, including 81 subsidiaries around the world.
Comprising four business divisions — Mobile Communications, Digital Appliance,
Digital Display, and Digital Media — and with global sales of USD 38.5 billion* in
2006, LG Electronics is the world's leading producer of CDMA/GSM handsets, air
conditioners, front-loading washing machines, optical storage products, DVD players,
flat panel TVs and Home Theater Systems.
LG Electronics' efforts continue to enhance the global presence of the LG brand and
maximize profitable growth. In particular, LG Electronics will be focusing on achieving
profitable and sustainable growth in the mobile communications and digital display
sectors to strengthen its leadership in the IT industry, while at the same time increasing
its market share in the home appliance and digital media sectors.
VISION
Global Top 3 by 2010
LG Electronics is pursuing its 21st century vision of becoming a true global digital leader
that can make its customers happy throughout the world by means of its innovative
digital products and services.
LG Electronics has set a new mid-term and long-term vision, aiming to achieve a position
as one of the top three electronics, information, and telecommunication firms in the world
by 2010.
As such, we are embracing the philosophy of "Great Company, Great People," whereby
only great people can create a great company, and pursuing two growth strategies
involving "fast innovation" and "fast growth." Likewise, we seek to secure three core
capabilities: product leadership, market leadership, and people-centered leadership.

Growth Strategy

Fast Growth
Fast growth is the result of strategies designed to expand the and earnings quickly, while
improving the growth rate in terms of monetary value rather than quantity.

Fast Innovation
Fast innovation involves setting extremely high innovation goals and securing a
competitive edge, aiming for a target of 30% more than what our competitors can
achieve. Fast innovation also means 30% more sales and improvement in our market
share, new product development and unveiling such products 30% faster, developing
technology and establishing corporate value three years ahead of our competitors.

Core Capabilities
Product Leadership
Product leadership refers to the ability to develop creative, top-quality products using
specialized new technologies.

Market Leadership
Market leadership refers to the ability to achieve the "LG brand is No. 1" goal, thanks to
its for-midable market presence worldwide.

People Leadership
People leadership refers to talented people, who perform extremely well by internalizing
and executing innovations.

Corporate Culture
Though a company may implement perfect management strategies and boast about its
outstanding and talented employees, it should adopt an appropriate corporate culture in
order to unleash the power of these capabilities.
No Excuses
People leadership refers to talented people, who perform extremely well by internalizing
and executing innovations.

'We' not 'I'

We pursue a corporate culture that encourages all employees to work together and form a
strong team.

Fun Workplace
We create a workplace where individual's creativity and freedom are respected and work
is made fun.

The amazing transformation of LG Electronics

In 1995, LG Group, formerly known as Lucky-GoldStar, was doing well. It employed
120,000 people worldwide, had headquarters in three key regions, 260 offices and
facilities in 120 countries. The group employed 1% of South Korea's work force and yet
contributed 10% of the country's gross national product and 15% of total export sales.
Between 1991 and 1994, the group's net income rose from $128.5mn to $1.3bn. By 1995
total sales were $32.3bn. Some of the businesses were achieving record results: LG
Electronics' profits, for instance, had soared from Won18.5bn to Won104.6bn.

Despite this sharp performance it was clear to Chairman Bon Moo Koo that the entire
organization faced the challenge of a fundamental transformation. As one of South
Korea's most prominent chaebols (large, diversified conglomerates, many of which are
family run) LG confronted a set of external forces that were unprecedented in its history.
The government had introduced major reforms aimed at reducing the chaebols' economic
clout. At the same time, liberalization of South Korea's markets increased competitive
pressure on the domestic front. It simultaneously integrated the nation into the global
economy, opening up entirely new opportunities.

To prosper and grow in this new environment, LG would have to become a truly global
organization. This, in turn, would not be possible without challenging and changing the
foundations on which the group's past success had been based. For LG Group strategic
decision making would become even more critical. Top management would have to set
the example and lead the globalization process.

Organizationally, the management system was fundamentally hierarchical, with decision

making authority largely concentrated in the office of the Chairman. The organization
was a dense bureaucracy. As HJ Lee, Chairman of LG Academy, explained, "Our people
had become complacent, bureaucratic, disillusioned. We could not win if we went on as
we had. We had to change ourselves to survive." Nam K Woo, President of LG
Electronics USA, Inc also felt similarly, "We had been a reactive company. LG Group
was not willing to take any risks. Decision making was all centralized. For example, if I
needed to buy a company car in the US I would require permission from the chairman's
office."

The LG Group was controlled by two families - the Koo's and the Huh's. This had an
important influence on both the strategic and the organizational practices of the group. At
the strategic level this had made the group more cautious and relatively risk averse.
Throughout its history the group had maintained consistent organic growth. Once the
group entered a market it remained there.

On the organizational level, the philosophical beliefs and influence of the founding
Chairman, Tae Hwoi Koo, had significant impact. The group was founded on the
principle of 'people harmony': the idea that the workplace should not be a place of
conflict, but rather an environment of collectivism and tolerance.

These two reasons had led to a strong focus on consensus. The need for consensus at the
top had practically cascaded to all levels of the company. And while the chairman was
powerful, actual decision making and influence in LG was relatively more decent-ralized
than in the other chaebols. Jin-Ha Chung, Executive, LG Economic Research Institute,
expressed, "LG is much less hierarchical than other chaebols, particularly at the top level.

For example, in the policy committee, which consists of the group chairman, vice
chairman and some of the Cultural Unit (CU) presidents, a CU president openly criticized
the group chairman in reference to the group's poor performance. Such accusations would
be unthinkable in many other chaebols where the chairman is regarded as God."

Hence immediately after assuming his new role, Bon Moo Koo announced the Second
Managerial Revolution to catapult the LG Group into the new century. By March 1996,
this massive transformation process was in full swing within LG. It affected every aspect
of LG's business and the core of the organization's social fabric.

Leap 2005
The revolution program was appropriately titled Leap 2005. Under this program the
group would strive to become the world's best in both quality and quantity; attain
groupwide revenue of Won300tn (approximately $400bn); reach highest profit-ability in
each industry; establish a brand image renowned for customer satisfaction and create a
fulfilling workplace for employees.

Leap 2005 systematically outlined measures the group should take to achieve global
leadership. To accomplish these changes under Leap 2005, LG went about redefining its
strategy, making difficult portfolio choices, changing its people management systems,
outlining core competencies etc.

01: a new face: change in group identity

On January 1, 1995 the group formally changed its name to LG Group from the original
name Lucky-GoldStar and embarked on a new corporate identity program. The new 'face
of the future' logo symbolized the five concepts of world, future, youth, humans and
technology, which the group believed were significant elements for growth and
development.

02: optimizing the portfolio

Both selective divestiture and development of new strategic regions and businesses were
planned. The group decided to concentrate exclusively on businesses that showed
significant potential growth or cash gene-ration; contributed to developing core
competencies for global competitiveness and served as the base for creation of new
businesses. They decided to withdraw from any area where they could not achieve market
leadership, even under profitable circumstances.

Divestiture was also planned for the businesses that demonstrated continuous loss; had a
low turnaround possibility; put inadequate efforts to secure core competency; had low
aspirations for growth; were riddled with persistent labor disputes and were of low
strategic priority.

Focusing on business activity was essential to maximize synergy across resources and
insure full commitment in areas where leadership could be possible. In these selected
areas LG planned to invest heavily to rapidly achieve critical mass. The company wanted
to compete aggressively until major player status was achieved. Their objective was
securing a return over the long term.

To liberate the resources necessary to make investment commitments, LG focused on

cost minimization in foreign markets by sharing best practices and know how within the
group. As Yong Nam Senior Managing Director in the chairman's office explained, "This
is where being a conglomerate can really add value. We can share the brand, share
information, know how and finance."

To drive globalization, LG focused on strategic markets. As part of its expansion plans

LG targeted both China and South East Asia as primary markets. Seok Heon Kim,
Manager, Global Business Team, LG Chemical, explained how the internal environment
was changing to promote overseas investment, "In 1990 I requested more than ten
business trips and more than five were turned down. Management claimed, "You do not
have to go there. You should just sit here and make phone calls, make documents and
send faxes. Doing this you can get what you want." Now it is different. If you have any
need to go abroad you just go. They have come to understand that to meet people is the
best way to solve problems."

"Each year I see the ratio of how much time I spend abroad increasing. If I am globalized
it is due to this time abroad. Through products and joint ventures I made many
international contacts. I think working with other people from other countries has given
me a good impression of the sorts of information I can get from other people and what
they think."

03: core competencies for growth

LG defined four core competencies necessary for future growth:

a) Acquire promising differentiated technology LG believed that to grow it must establish

leadership in technology for both existing projects and next generation projects. In the
past, LG had been a technological follower. It had to develop world class facilities and
establish relationships with players possessing world class skills. Gaining an
understanding of the source of the 'best' techno-logy, acquiring it and utilizing it in a
timely manner was essential to achieve high performance.

b) In management based on cash flow value based management LG used value based
management to maximize shareholder value. Investments were to be made on the basis of
both future cash flow and profit. Management resources would be more appropriately
distributed through analysis of investment effectiveness and use of assets to evaluate
existing projects and new business. This would help implement growth strategy and aid
investment judgement and strategy selection through future cash flow.

Such policies served to move LG away from focusing on turnover as an indicator for
investment decisions. The system was also useful when undertaking business process
reengineering. Identification of key value drivers for improving business value would
allow the group to appropriately allocate management resources. Lastly, value based
management would assist the organization in restructuring its own financial resources by
identifying variables to help optimize financial infrastructure.

c) building core skills to succeed, LG planned to develop or import management skills

necessary to engage in strategic alliances. Managers with the ability to handle post
merger management, identification of, and negotiation with, potential alliance partners
and joint management were essential. Existing skills for both entering and developing
overseas markets also needed to be made more robust.

d) ensuring breakthrough capability developing breakthrough capabilities to improve

operational activity were critical for growth. The organization did not possess the
capabilities to examine operational problems adequately. Developing the ability to
identify 'the root of the problem', make fact based judgments, benchmark operations
against other industries, and strive for best practice would be improved.

04: models for growth

LG needed to achieve growth under three primary, but different conditions ie South
Korean, regional and global context. LG developed three growth models to outline the
characteristics and requirements in each context. By identifying the skills, strategic
approach, growth vehicles and evaluation criteria the group began to deal with the
complexity of managing growth across industry dynamics in the context of geographic
competition.

05: reshaping organization and people

Few corporations of comparable size and complexity had ever attempted a transformation
as radical and a growth objective as ambitious as Leap 2005. So there was little by the
way of precedence or existing best practice to learn from. Yet, from the experiences of
other companies - particularly that of General Electric - it was clear that LG's strategic
ambition could not be achieved without a fundamental change in its culture and people.
This was the most important dimension of the second managerial revolution.

To fully understand how ambitious Leap 2005 was some perspective on the existing
culture is necessary. As John Koo expressed, 'The first challenge is addressing the
distance between where LG Group is now and the goal described in Leap 2005.'
Although the country and the company is emphasizing globalization our environment and
cultural back-ground are not conducive to globalization' ... 'To truly globalize the Korean
people we must change their ideas about our business, ourselves and our nation.
Potentially, globalization could create turmoil and confusion.' LG's historical culture was
defined by a set of attributes that were internally consistent and mutually reinforcing.
These were:

Stability: the formerly protected national environment and the fact that LG Group had a
conservative strategic approach had served to develop a view of the group as an
unfaltering entity. Because of LG Group's role as 'leading second' within the chaebol
community, it had not developed a reputation of 'high risk' or fierce competition that its
arch rival, Samsung had.
People harmony: the founding chairman believed strongly in this philosophy. He
endeavored to create an environment where group consensus was strong and where there
was little conflict between people. Employees spoke of the group as a 'mild' environment.
Such opinions were developed in part due to LG's non-aggressive market positions as
well as its forgiving approach to under performance. Individuals who do not perform well
are not punished per se, but given opportunities in lateral directions.

Respect for seniors: as Confucian values are highly influential in Korean society, respect
for hierarchy and authority figures has been integral to many chaebol management
structures. In addition, in stable environments past experience is highly valued.
Experience, therefore, played a strong role in determining how highly individuals were
esteemed. In contrast, as both the South Korean and the group environment become
increasingly dynamic, qualities such as intuition or creativity will need to play a greater
role in how individuals are assessed and rewarded. This in turn, posed a severe challenge
to the seniority based recognition and compensation systems that have historically served
as the key anchor of LG's institutional framework.

Teamwork: collectivism is a key Confucian value. Employees at LG Group work in

teams (both formally and informally) and responsibilities are balanced within the teams.
Socializing mechanisms insure that individuals pull their weight in teams in order to
survive within the workplace.

Individual recognition through opportunity: employees at LG explained that even though

they performed work within teams, individual recognition was key within the culture.
Due to the overriding atmosphere of equity, such recognition did not spur jealousy or
rivalry, rather mutual respect. The chosen form of recognition was opportunity.
Individuals who performed well were given better and more meaningful work.
Throughout the group individuals were able to cross numerous functions and develop
both specialized and generalist skills. Remuneration was not viewed by employees as a
key reward. It was noted that LG Group was amongst the highest paying employers
within Korea. As a result, individuals knew they were well compensated in general, but
actual rate of pay or changes in compensation per se did not hold significant meaning.

Paternalistic management style: employees at LG Group trust their bosses and the group
as a whole to do what is best for them. As SM Oh, Deputy General Manager, Planning
Team, PVC Division, LG Chemical Limited, explained, 'LG is like a father, even though
at times you may be asked to do things you do not like, you understand that un-
equivocally, it is in your own best interest. In the long term the company really cares
about you.' Such feelings have contributed to a high level of trust, loyalty and
commitment within the LG Group.

High commitment and loyalty: 'forced' and 'voluntary' loyalty: loyalty within LG Group
is derived from both environ-mental or 'forced' sources and organizational 'voluntary'
influences. In explaining the impact of 'forced' loyalty Young Il Jin, President & CEO,
LG Securities, described the commitment of employees to the chaebols as, 'similar to that
in a religious cult. At LG there is a strong identification with the company. Many
employees feel a deep personal attachment to the company.

This is in part due to the fact that after the Korean war there was a limited labour market.
People felt lucky to have jobs.' Such feelings were reinforced by the lack of any social
welfare system in South Korea. Wan Sup Sung, Executive, LG Electronics, said, 'I think
the national environment was influential in creating commitment and trust. Over our
history people had fear: fear of not getting jobs.'

There was much that was good in that culture that needed to be protected and enhanced.
And yet, there was much that needed to be changed. The challenge for the company was
to be able to protect the baby while throwing out the bath water. As John Koo expressed,
'The first challenge is addressing the distance between where LG Group is now and the
goal described in Leap 2005.' Although the country and the company is emphasizing
globalization our environment and cultural back-ground are not conducive to
globalization' ... 'To truly globalize the Korean people we must change their ideas about
our business, ourselves and our nation. Potentially, globalization could create turmoil and
confusion.'

LG focused on developing characteristics that were a sharp departure from some

elements of its cultural heritage. Therefore, a massive culture change became the pivotal
point of Leap 2005 - the make or break factor that would determine the results of other
initiatives. There were four key characteristics that LG focused on…
a. first, it had to embed a sense of challenge throughout the group. How would the
organization move from being a 'leading second' to an excellent first? Clearly defined
stretch goals were set, based on management's belief that 'if our people know how to
achieve a target before-hand it is not a challenging goal'. LG set a target that could not be
achieved by progressive improvement, the group would have to 'leap' to achieve it.
b. second, a commitment to speed was essential. The company strived to design efficient
decision making processes and management activities. It believed that developing a fast
moving organization was essential to take full advantage of increasingly rapid
environmental changes.
c. third, was a focus on simplicity. LG tried to make everything simple. This was
manifested by removing complexity from management echelons, simplifying
communication as well as simplifying the use of parts in engineering.
d. fourth, LG It decided to become boundary less. It tore down organizational boundaries
that fragmented people and processes across businesses and geographic units, across
hierarchical levels, and from the outside.
06: renewing people
The primary recipients and key drivers of the transformation process, were LG's existing
work force. The group undertook substantive programs to develop its existing high
performing individuals and, in time, its more latent leaders.
a. global leadership program: the purpose of this program was to provide participants
with global perspectives in business, cross cultural awareness and competencies such as
managing complexities, high performance multi cultural teams, managing business
relationships and managing self effectiveness. The focus was to develop the global
business leaders.
b. change leaders' program: this was a structured program that LG undertook in alliance
with GE, EDS and Arthur D Little. It used a change model, which helped individuals
learn to challenge authority in order to learn. Consultancy and communication skills were
also taught.
c. coaching program: HJ Lee, Chairman, LG Academy, under-took the role of coach. He
explained, 'I am serving as a mentor to all six target Cultural Unit leaders. Concerning
our change toward globalization, mentally and intellectually we understand its
implications.
Physically we do not understand. How it will be manifested is still not entirely clear. To
guide the process I am going to be a counselor and coach to the CEOs and Presidents of
the Cultural Unit's. To be a mentor you have to convey the best things you have to your
people. You let them understand and discover things by themselves.

For the process to work you must be someone they respect. I usually select two or three
immediate tasks they have to solve. Training, IT, HR, developing R&D - these are our
most immediate problems. I use these project tasks as a tool for mentoring. After they
solve these problems the managers have self assurance. For the organization to grow
quickly, power must be delegated. You have to trust your managers. If they fail you
cannot blame them. It is up to the mentor to assess the subordinates carefully. Once the
mentor has ascertained their capability they must fully empower the subordinate. If the
managers fail, the mentor is to blame - not the manager.'

To achieve cultural change, the group's human resource policies also came under review
and transition. The new human resource 'philosophy' emphasized three criteria: highest
capability, highest performance and highest compensation. LG sought to secure people of
the 'highest capability', regardless of race, nationality and gender. It then utilized and
developed them by providing these individuals opportunities to achieve 'highest
performance'. In return LG provided 'highest compensation'.

The primary shift in the philosophy from some of the tolerant aspects of 'people harmony'
to a performance-orientated culture was a difficult transition to make. LG recognized that
moving from a seniority based system would not be easy. Yong Nam explained, 'In the
past we have not been in a competitive environment. There were no incentives or 'fast
tracks' per se. So to some extent everybody was happy. Making the change is necessary,
but difficult.'

Based on this philosophy the conglomerate sought to hire highly talented people who
possessed the 'world's highest competitive power'. Creating a culture to induce high
degrees of 'voluntary' loyalty became more important for achieving necessary levels of
commitment in the workplace and developing a reputation as 'a great place to work'.

LG hoped to recruit and retain personnel who possessed the following attributes: people
who continuously change themselves and cope well with the constantly changing
environment around them; people who liked to take risks and would aggressively pursue
'breakthrough'; people who would lead innovation and devote their enthusiasm to
cultivating people of the highest talent and people who conduct business with honesty,
fairness and sincerity.
To help create an environment that would attract foreign nationals LG began to use
English as the company language of choice, provide high quality living accommodation
and conditions for non-Koreans and instituted career development programs that paired
high potential individuals with accomplished senior executives while giving exposure to
top management.

The high wire act

In 1995 28% of overall revenue at LG was generated overseas. Of LG's 200 'Global
Business Leaders' only thirty were foreigners. In the next ten years LG aspired to have
50% of all revenue generated overseas and 1,400 'Global Business Leaders' of which half
would be foreigners. It is also planned that three to four of LG's divisional presidents
would be non-Koreans, that 20% of the executive positions in the Seoul office would be
filled by foreigners and that local managers would serve as heads of all of the group's
overseas operations.

Although LG had a clear vision of where it wanted to be and had begun to develop
realistic action plans for transformation, a key question remained as to how the
organization would be able to fuse the favorable attributes of the existing local traditional
Korean corporate culture with the necessary characteristics of more cosmopolitan
organization. A successful transition could create a unique corporate culture and an
enduring source of competitive advantage.

STRATEGIC ALLIANCES
LG Electronics is making technical advances and identifying business opportunities
through various associative relationships with some of the world's leading companies.

LG Electronics is striving to become number one in the world by mingling in various

business and technological fields and making strategic alliances with world famous
companies. "Strategic association between corporations," in which companies with
different infrastructures cooperate in the fast-developing 21st century business field, is of
key significance in terms of strengthening the existing industry and creating a new one.
LG Electronics will do its best to create new products and services with an open mind,
while developing new technologies and business fields through various associations with
some of the world's most successful companies.

BUSINESS DOMAINS
The Digital Future of LG
Mobile communications, digital appliances, digital displays, and digital media — LG is
paving the way for the future.

Mobile Communications
LG is a global leader in mobile communications, specializing in UMTS, CDMA, and
GSM handsets. Thanks to its wide range of wired and wireless options, the company is
becoming a force to be reckoned with on the international market.

Digital Appliances
LG changing homes in many ways, offering customers exceptional value and
convenience. Innovative digital appliances from steam washing machines to refrigerators
with built-in Internet and TV illustrate LG’s commitment to digital convergence.

Digital Display
LG offers a wide range of digital display products, equipped with customer-oriented
designs and technologies. With its LCD monitors and projection TVs, LG is pulling out
all the stops to remain the frontrunner in today’s digital display industry.

Digital Media
LG has a great interest in digital media and is continually developing and producing
digital convergence products that promise to enrich the lives of its customers. Its main
focus is on producing high-definition, quality products in a variety of areas.
LG CNS (consulting and solutions):
Entrue Consulting started out as a consulting business division of LG CNS. Today, it
provides professional consulting services under the unique brand name of Entrue
Consulting Partners. BUSINESS ISSUE & TREND
With the rapid growth of the IT industry, the IT sector has taken on increasing
importance in the world of enterprise management. Under this situation, securing strong
competitiveness through IT is now a critical issue for each commercial enterprise.
Companies are investing more and more in IT, and as a result they require a consulting
service that clearly presents the technological opportunities required for enterprise
management, as well as an optimal application method. Consulting services suggest IT
application methods able to complement a specific enterprise, so that the adopted IT is a
reasonable match with the customer’s business providing maximum efficiency and effect.
SERVICE OVERVIEW
Entrue Consulting sets up an IT vision and IT strategy based on each client’s
management strategy, and then presents a detailed information system and infrastructure
architecture capable of implementing these strategies. By doing so, this service helps
resolve the client’s fundamental IT problems and implement subsequent business
activities such as system development and management.
The services provided by Entrue Consulting can be broadly grouped into two areas:
industry and solutions. Various diverse and specialized IT consulting services for each
sector are provided by activities such as manufacturing, logistics, services, public sector
and finance. Focused on the sales and marketing business, the solution service area
provides solution-based consulting services in various areas such as CRM for customer
management, ERP for enterprise resource management, KM for knowledge economy
realization, and SCM, all of which encompass the planning and implementation of
enterprise supply chains to e-Marketplace establishment. In addition, to provide a more
complete business-oriented consulting service than a simple IT-based consulting service,
additional emphasis is placed on IT ROI or IT strategy setup consulting.
PROVIDING SERVICE
Information Technology Outsourcing (ITO)
- Information Strategy Planning (ISP)
ISP consulting service designs a desirable future business model that can enable
optimized business operation to cope with environmental change while achieving a fluent
management strategy. It then sets up an information strategy implementation plan from
an IT perspective to support this design efficiently.
- IT Assessment
This service assesses the company’s IT level from two perspective processes, people and
technology. In terms of the process area, CRM/SCM will be diagnosed as the core area of
management achievement creation.
- IT ROI Assessment
Many companies need an evaluation on the effect of their IT investment. However,
evaluation activities and utilization of these results are currently insufficient due to
inadequate effect evaluation systems. To address such a problem, this service presents the
most effective IT investment direction using reliable evaluation and forecasting.
- e-Biz Readiness Assessment
The customer’s IT and web environment are analyzed and the net readiness level is
diagnosed using speedy e-Transformation methodology. Based on this diagnosis, an
appropriate vision and roadmap are established and an implementation method is
selected.

Process Innovation Consulting

- BPR (Business Process Reengineering)
The BPR consulting service analyzes the customer’s business process based on current or
future applicable information technology. It then removes or re-positions unnecessary or
duplicated businesses to set up an efficient process.
- Operation Assessment
The operation assessment consulting service analyzes the effect of introducing major
solutions and systems like the ERP system, as well as coverage and customer satisfaction,
in order to set up future improvement or activation methods.
- IT Management Process

The IT management process consulting service works to diagnose and propose

improvement methods for a style of information management architecture composed of
one central management process spanning from IT strategy planning to organization
management - in order to maximize the contributive IT value.

Implementation
- Implementation Strategy
The implementation strategy consulting service defines the implementation schedule /
organization as well as implementation tasks, in order to most efficiently carry out the
‘To-Be’ model selected by the ISP project. It also maps out the expected costs / benefits.
- Solution Assessment
The solution assessment service evaluates the solution with its functions, technology,
price and service in order to select an optimal solution capable of fitting into a company’s
business and professional requirements. It also selects the best package to maximize
effects with minimal cost following solution setup.
- Solution Implementation

Based on the selected solution, an implementation plan is set up and a solution is

implemented.

- Change Management

The change management consulting service identifies various change factors that may
occur while introducing and establishing the improvement model. Then, it proposes
systematic activities that can support a smooth implementation of the improvement
model on the business side.

IT SOLUTION

1) Customer Relationship Management (CRM)

LG CNS provides a proactive consulting service so that each customer can carry out their
business successfully through CRM strategy setup, CRM MP setup, CRM diagnosis,
package selection, implementation and change management. To this end, LG CNS
maintains and develops a partnership with the customer based on an understanding of
their corporate strategy and business profile.
2) Enterprise Resource Planning (ERP)
LG CNS provides one-stop service from package selection to implementation, including
setup, change management and after-service, by capturing customer needs and concerns
effectively in the standard ERP area as well as the extended ERP area (such as upgrading
existing ERP, e-HR and SEM).
3) Supply Chain Management (SCM)
LG CNS provides a solution-based IT consulting service that identifies and applies
solutions in order to set the direction and strategy of the ID and achieve them most
effectively in the areas of SCP, SCE and PD. Primary targets are customers in
manufacturing industries such as electricity, electronics and chemicals.
4) Knowledge Management(KM)
LG CNS provides differentiated EIM service through a WSM and ECM design that
reflects customer needs under the SKM infrastructure, as well as traditional KM
consulting services such as master plan setup, BPR/ISP and diagnosis. These supports
allow each customer to establish an individual management system, thus enabling them
to capture internal/external knowledge information effectively for the sharing,
proliferating and utilizing of general knowledge information within the organization.

INDUSTRY
1) Public sector
LG CNS contributes to national information projects by providing BPT/ISP, solution
consulting and outsourcing consulting for various customers such as educational
institutes, railway/public logistics firms, welfare/administration, and legal/prosecution
entities, based on extensive project experience, specialized knowledge and technology.
2) Finance
For customers in the primary finance sector such as banks, and the secondary finance
sector such as credit cards, insurance and securities companies, LG CNS provides a total
consulting service. This includes management strategy setup, process renovation, system
diagnosis and evaluation, and system development so that each customer can resolve
their business operation issues and achieve their objectives.
3) Electronics
LG CNS provides a total consulting service for the entire value chain in the electrical and
electronic industry from IT diagnosis to master plan setup, solution implementation
planning and final setup.
4) Chemicals / Telecommunication, Media & Entertainment
LG CNS provides service for major consulting areas such as business modeling, process
engineering, IT planning, IT solution selection and change management. As a group, it
provides optimal service for the manufacturing industry (such as the chemical and
automobile sectors), and takes the lead in developing new business areas in the medical
and communications industries.

5) Services

For the various service industry customers in distribution, logistics and construction, LG
CNS provides a total consulting service that encompasses business strategy setup, process
renovation and new technology implementation, in order to resolve business operation
issues and achieve objectives.
STRATEGY
LG CNS offers a professional consulting service for customers so that they can set up a
strategy at the corporate, business and functional levels, resolve business operation
issues, and achieve their management vision effectively. Besides which, professional
consulting on IT strategies is also provided alongside IT performance managing
consulting to effectively control and monitor the quantified IT values.

LG-NORTEL INNOVATIONS POWER SK TELECOM NEXT-GENERATION

WIRELESS SERVICES
ADVANCED OPTICAL AND WIRELESS BACKHAUL TECHNOLOGIES
INCREASE NETWORK CAPACITY AND DECREASE OPERATOR COSTS

SEOUL – LG-Nortel - the LG Electronics and Nortel* [NYSE/TSX: NT] joint venture -
is helping SK Telecom deliver new wireless services such as wireless Internet, 3D
gaming, digital home services and telematics. The LG-Nortel solution handles increased
volumes of high-speed wireless traffic while significantly improving network cost-
effectiveness, scalability and reliability. The solution supports wireless backhaul – the
communications traffic between the cell towers and the network.
The new, high-performance Metro Ethernet wireless backhaul infrastructure is already in
service, and will support the optimization of over 7,000 wireless base stations
nationwide, once fully deployed. The rollout enhances SK Telecom’s position as Korea’s
largest wireless communications operator as the take up of new next-generation wireless
services takes off throughout Korea.
According to SK Telecom, by upgrading the existing wireless backhaul network to this
next-generation Metro Ethernet solution, the company can easily and cost-effectively
deliver high-speed wireless broadband services and reduce current and future wireless
backhaul expenses by up to 40 percent. SK Telecom chose LG-Nortel for this large-scale
investment in the future because of the company’s leadership in delivering both wireless
and optical solutions. SK Telecom’s satisfaction with the 10G optical backbone from
Nortel that has carried its advanced multimedia services for the past several years was
also a key factor in that decision.
The new infrastructure supports SK Telecom’s existing 2G, 3G and next-generation
wireless services, including current wireless multimedia offerings like multimedia
messaging, satellite DMB (digital multimedia broadcasting) and WiBro.
“SK Telecom’s enhanced wireless capabilities lay the foundation for their customers to
enjoy next-generation services, such as mobile video and streaming media. LG-Nortel’s
wireless backhaul solution builds on Nortel’s experience and reputation, gained through
meeting the needs of over 40 of the world’s largest mobile operators in recent years,” said
Peter MacKinnon, chairman, LG-Nortel. “Leveraging both this global expertise and our
ability to provide solutions that are flexible, cost-efficient and scalable is critical to LG-
Nortel’s increasingly important role in the rapidly evolving next-generation wireless
communications environment.”
The components of the LG-Nortel Metro Ethernet backhaul solution for SK Telecom are
the Nortel Optical Multiservice Edge (OME) 6110 and 6130 multiservice access products
as well as the OME 6500 next-generation multiservice convergence platform – both part
of Nortel’s IP/Ethernet-centric Metro Ethernet Networks Mobile Backhaul Solutions
portfolio. The small and compact OME 6110/6130 devices are used to provide the cell
site concentration before the wireless traffic is transported over SONET/SDH, CWDM or
Ethernet to the OME 6500 for aggregation and grooming into an efficient and scalable
core.

BIBLIOGRAPHY

• Moneycontrol >> News >> Smart Manager >> The amazing transformation of LG
Electronics

• Moneycontrol >> News >> Smart Manager >> The amazing transformation of LG
Electronics
• Nortel: News Releases: LG-Nortel Innovations Power SK Telecom Next-Generation
Wireless Services

• LG upgrades dual-format DVD drive - 27 Nov 2007 - Computing

• Electronics Industry Supply Chain News: LG Electronics Tap Into E2open Supply
Chain Management Solution

• CCTV International

• Aircel Awards Business Transformation Contract To Wipro

• http://www.bbwexchange.com/pubs/2007...250-450106.asp

• IEEE Xplore - Login

• LG CNS