LG ELECTRONICS INDIA -“We have opted for different partners for different services”

Arindam Bose, head-IT, LG Electronics India is different. First, he comes
from product management and not from traditional IT background. Second, he
considers IT a strategic proposition. He started his career in the US with
Bellsouth. Later he returned to India and joined Philips India as regional
manager (marketing) and then LG in product management. Bose spoke to
VOICE&DATA on various aspects like outsourcing, SLA, wireless, and
e-business. Excerpts:

LG believes in partnership and that's the reason it has grown more than
the industry average every year. What model is LG is practicing for connectivity
services?

We believe in partnership and that's the way we have grown. We have opted
for different partners for different services, e.g., for national long distance
we have partnered with Bharti and BSNL, for VSAT we have chosen Tata Indicom and
Bharti, VPN is through HCL Infinet, and IPLC has been subscribed through MCI and
Equant.

With networks becoming cumbersome and difficult to manage, do you feel
outsourcing is the need of the hour?

Initially, we had a big team but later we moved to outsourcing and it was a
great learning experience. It is around five years since we have been
outsourcing our services and different services are being looked at by different
companies, e.g., ERP software is maintained by LG Soft (a part of LG CNS
Global); e-mail is managed by Softcell; e-business support is through Path
Infotech; LAN administration by HCL Comnet (which also takes care of security,
reporting, and network management); systems administration is taken care of by
Wipro Infotech; and user support is through CCS Computech.

Presently the focus is more on planning and monitoring the weaknesses of the
current system. Care has also been taken to see that there is faster adoption of
new technologies thereby adding value. This year, the focus is on Oracle ERP and
business intelligence package.

Are you satisfied with QoS on the bandwidth front (local, domestic, and
international)?

Initially, we had problems with SLAs but we have corrected it. We monitor
SLAs on a quarterly basis and in case of downtime it gets accumulated over the
next cycle. We have different SLAs for different services, e.g., 99.5 percent
for VSAT; 98 percent for VPN; and 98 percent for NLD. SLAs are valid from eight
in the morning till midnight, excluding Sundays.

The major challenge is not in the backbone but in last mile. In the last mile
we opt for incumbent as well as private operators but in most places it is not
possible to opt for private operator as connectivity is not available for remote
branches.

With mobility gaining ground, service providers are focusing on
mobilitybased solutions and applications. Is LG planning to opt for
mobility-based applications and solutions in the days to come?

This year, we are looking at wireless deployment in the last mile and we
plan to bypass last mile as there is a major bottleneck. We have signed letter
of intent (LoI) with service provider for WiMax deployment and the proof of
concept is presently being tested at Coimbatore.

LG has been leveraging a lot on e-business. What is your present and
future strategy on the e-biz front?

We have been early adapters of e-biz in India. The dealer network is around
4,000 of which a majority are being connected to lgdealernet.com, a B2B site for
all LG dealers. The site helps in easy monthly reconciliation of accounts and
provides an interactive platform for sharing information with all the dealers.
Presently, around 75 percent of LG's turnover is through this channel. The
channel is also useful in imparting education so that dealers can increase
productivity and reduce on staff cost.

On the supply side we have lgesource.com for domestic vendors and
lgimports.com for overseas vendors for maintaining inventory status. On the B2C
side, lgezbuy.com is for establishing strong customer relationship, besides
creating an additional revenue channel. Even for customer service, LG has
created lgcsnet.com where service is outsourced to service franchisee (around
800). An SMS interface with lgcsnet.com application has been developed where
calls are mapped to zip code and service franchisee gets alerts for different
request that LG receives from the customer.

What are the new technologies that LG is presently testing?

LG is about speed and empowerment and its infrastructure is backed up with the
best so that sales decision can be taken on the fly. We are evaluating
Blackberry mainly for e-mail applications.

We are designing an SMS-based query system whereby a service franchisee knows
whether the component is in the regional godown, so that he can give a realistic
estimate of correcting a faulty system.

LG has been expanding its offices in remote locations. Do you get proper
connectivity in remote areas? Are you satisfied with the quality of the network?

For setting up offices in remote areas LG has devised a different strategy,
the selection is not on the basis of business but on telecom connectivity in
that particular city. The office is selected first by the IT department to see
if there is proper connectivity. Lack of infrastructure forced us to focus on
Asansol rather than Durgapur, where LG was planning to open its office.

What is the IT/telecom budget for FY 2004—05 and what is your projected
expenditure on IT/telecom in FY 2005—06?

The total IT as well as communications cost is at around 0.3 percent of the
total investment.

What is the process that LG has laid down for choosing the technol-ogies.
Do you opt for a pilot before full-scale deployment of any technology?

We adapt to the latest technology by doing a small pilot, seeing how the
technology can help us. Once we feel that it is up to the mark we deploy it in a
big way.

How do you keep your internal as well as external customers (like
customers, dealers, service franchisee) happy?

We are a listening department and we always feel that internal as well as
external customers are right. We see what the problems are and then look for
solutions. We have meetings every quarter with the team to sort out or thrash
any problems that come regularly.

Pravin Prashant