Integration of ERP Systems with Other ICT Systems

Questions: 1. Briefly describe the enterprise, in terms of its operations, products/services, markets, competitors etc. 2. Illustrate how its e-commerce or ERP implementation integrated with related ICT (information and communication technologies- data mining, business intelligences, data ware house, databases, internet, RFID, VAN, EDI) ? 3. Summaries the likely issues they have faced during their e-commerce or ERP implementation. 4. Outline the likely advantages they have capitalised from the implementation and integration. Answers: LG Electronics as a Case Study LG Electronics is the multinational electronics company having the wide range of electric products. Parent company or headquarters is located in South Korean and having 83000 people working in 119 subsidiaries present in many countries of the world (Isikdag et al., 2013). Operations: LG Electronics has five business units and they are as follows: Home Entertainment Mobile Infrastructures Home based Machines Air Conditioning and Energy Solution Vehicle Components They have approximately 128 operations worldwide in which 83,000 people are working. LG Electronics owns Zenith and also controls 37.9 percent of LG Display (Frank, 2004). Now days its mobile business is expanding and the company have entered into the smart phone business. Products: LG Electronics has an inclusive variety of products which contain televisions, home theatre systems, refrigerators, washing machines, computer, wearable means, smart piece of equipment and smart phones (Isikdag et al., 2013). Market: LG's market is expanded or having the presence among the whole world as the organization covers more than 50 countries. In some countries, the company has good market share and tops the chart. It had 2013 global sales of USD 53.1 billion (Gupta and Misra, 2016). In 2011, LG Electronics were the world's second-largest television manufacturer. Competitors: LG has many competitors present in the market GE, Mitsubishi, Samsung etc. Among that major one is Samsung who is having a presence on almost all products. ERP implementation integrated with ICT Systems LG Electronics as a global giant, where more than 83000 employees are working across 40 countries, managing systems are very challenging (LOZANO, VILLARRUBIA and LPEZ, 2014). Earlier high maintenance costs, local controls lacking transparency, inefficient decision-making process, under-utilization of the means, labour-intensive procedures, etc. made it difficult for LG to operate as a worldwide enterprise, which then decided to take the ERP method. All its subsidiaries are having the complex environment and require a major investment in information systems. ERP solution is necessary for keeping its business running smoothly and for the upcoming progress and development of the company (Mekawie and Elragal, 2013). Today, its every subsidiary of the business unit requires the support of the top and the best information technology. All are having ERP systems which are highly integrated with ICT. Generally, ICT refers to as an umbrella of communication skills that deliver entrance to information through telecommunications only like the Internet, voice over IP (VoIP), and video-conferencing, wireless networks, cell phones, etc. Their different research and development centres have the facility to do presentations, meetings, reviews, and demos etc. over VoIP and video-conferencing with their parent company (Mekawie and Elragal, 2013). This helps them to understand the product better and gather the know-how from other engineers. As he LG company has a large database which includes information about its staff, customers, products, inventory, retails, purchases, etc. Through Data Mining software, they extract useful information like company use point-of-sale data of customer purchases, competitors product information etc. and evaluate facts with the support of Business Intelligence (BI) software. BI software does analytics based on key parameters and presents it in the form of charts, graphs, and trends (Ding and Sheng, 2010). This helps managers to take important decisions for the organizations which include new product development and enhancement, pricing and warranty policies, better servicing and increase their production. LG has separate central Data Ware House, which stores different mined data accumulated from a wide range of sources or other local databases of subsidiaries. This data helps the organization as a whole to take decisions (Mittner and Buchalcevova, 2014). Data warehouse The ERP system is also on centrally located servers such that their employees can access it through the Internet or companies Intranet. The whole LG organization around the globe connected through the value-added network (VAN) privately to facilitate EDI (electronic data interchange) or be responsible for other network services. So a manager who is sitting in South Korea from inside his room can have real-time data production data of subsidiaries in different countries. In this network employee exchange email, reports and make communication, fast and secure within the whole organization (Mleczko, 2015). LG uses RFID Radio-frequency Identification for labelling that brings transparency and better quality data. Issues faced during ERP implementation During the ERP implementation, LG faced different challenges. Some of the challenges are- Cost ERP implementation system and its maintenance are very costly as it consists of lots of modules and LG has to bear this cost annually. Training Proper training is very much important during the implementation and its further usage by employees. The worker should be properly trained in using the system otherwise it will be ineffective for the company (Mleczko, 2015). Customization A lot of customization required in ERP modules as the single system used by different subsidiaries in different countries. Countries are having different languages and their demographics, taxation; policies differ from country to country. Resistance to Change Sometimes it is difficult to convince different business within LG to switch from already running and existing business system to new common ERP system. Management has a couple of fears about new, unknown processes and their loosing of decision-making authority (Ravnikar, 2010). Stages ERP implementation must be done in stages and in parts. To implement everything at one time will create a lot of misunderstanding and disorder. Advantages from implementation and integration The ERP system, which includes a data mining, database, and another program, facilitated the following advantages to LG: ERP implementation manages the single term centrally with looking after the cost. It is beneficial for the employee assessment procedures and keeps transparency in the staffing process that facilitated the acquisition; engaging and satisfying performance based on the right skills and established performance activities (Ravnikar, 2010). ERP helps the senior management in pursuing of regular goals and targets and for time reporting. Due to the willingly obtainable real time reports it easily to informed decision making. Integrated control over HR practice, with district level flexibility, it is easy to implement changes in a localized area. It is beneficial for the improvement and growth in productivity for HR utilities and practices. It can be beneficial in point of view of cost saving by not having to maintain multiple systems. As in various centres ERP performs in easy sharing of the finest for the company (Dantes and Hasibuan, 2010). It is beneficial for increasing the employee morale through text sharing and online seminars, and in time-saving. Conclusion: It took more than five years Crossed in deliberate stages and set objectives, the ERP integrated implementation assisted LG to alleviate all the experiments influenced by different business units. At present, LG continues to gain with the computerized ERP solution and continues to improve it additional as required. References Dantes, G. and Hasibuan, Z. (2010). The Impact of Enterprise Resource Planning (ERP) System Implementation on Organization: Case Study ERP Implementation in Indonesia.IBIMABR, pp.1-10. Ding, Y. and Sheng, B. (2010). ERP and PDM integration technology to support collaborative product development.IJBIS, 5(4), p.440. Frank, L. (2004). Architecture for integration of distributed ERP systems and e commerce systems.Industr Mngmnt Data Systems, 104(5), pp.418-429. Gupta, S. and Misra, S. (2016). Compliance, network, security and the people related factors in cloud ERP implementation.Int. J. Commun. Syst., 29(8), pp.1395-1419. Isikdag, U., Underwood, J., Kuruoglu, M. and Acikalin, U. (2013). Data Integration Capability Evaluation of ERP Systems.International Journal of Enterprise Information Systems, 9(3), pp.113-129. LOZANO, ., VILLARRUBIA, G. and LPEZ, A. (2014). Mobility Integration of ERP systems.ADCAIJ, 3(9), p.65. Mekawie, S. and Elragal, A. (2013). ERP and SCM Integration.International Journal of Enterprise Information Systems, 9(2), pp.106-124. Mittner, J. and Buchalcevova, A. (2014). The ERP System for an Effective Management of a Small Software Company Requirements Analysis.JoSI, pp.76-87. Mleczko, J. (2015). Integration of CAD/PDM and ERP Systems in Practice.AMM, 791, pp.26-33. Ravnikar, F. (2010). The Impact of Managers on Successful ERP Implementation.Organizacija, 43(4).