Samsung Electronics Getting Consulting Help from IBM

Samsung Electronics Getting Consulting Help from IBM. October. 26, 2007 09:16. nex@donga.com imsun@donga.com.

Samsung Electronics (SE) is receiving IBM consulting help in its push to reorganize its operations around the “Samsung, going global” strategy, according to sources on October 25.

SE is implementing its Globally Integrated Enterprise (GIE) plan to SE headquarters as well as its overseas branches.

The group-wide consulting drive is unprecedented for SE and is allegedly a part of the firm’s efforts to realize the commitment of Lee Kun-hee, the chairman of Samsung Group, who said, “Explore ways to strengthen global competitiveness.”

Yoon Jong-yong, CEO of Samsung Electronics, also called for benchmarking of IBM in his monthly speech, saying, “A creative culture should spread across the board for us to leap forward as a world-class company. We should find ways to spread the new ideas of all our employees throughout the firm.”

The consulting aid is focused on establishing effective resource management systems linking all of SE’s offices and plants overseas. SE is also considering a system that enables the sharing of ideas from bottom to top without filtering, as it has decided that a large and bureaucratic organization cannot take an innovative approach.

SE is expected to start a new restructuring covering production and distribution.

SE has already increased the share of mobile phone production overseas by more than 50 percent. More recently, Samsung SDS introduced a new intranet ‘Open Place’ model, which is a knowledge management system.

SE had contacted renowned consulting firms for restructuring aid before choosing IBM.

IBM is famous for transforming itself from a mainframe manufacturer to a global force since Samuel J. Palmisano took the reins of the firm in 2002.

GIEs are restructured businesses that emphasize integration of all aspects, including accounting and procurement, on a global basis, which is different from traditional multinational operations based on local offices.

Currently, IBM’s financial department operates in Malaysia, Human Resources in the Philippines, and Procurement in China. IBM runs a unique system enabling all employees to participate in important decision-making processes through ‘Online Jam’ sessions.

Lee Hwi-seong, President of IBM Korea, said, “GIE is a solution to maximize business competitiveness by tapping the benefits of global integration.”