LG CNS earning stripes as global IT provider

LG CNS, a leading provider of information technology solutions, is involved in a wide range of markets overseas and also participated in designing the network for this Bulgarian solar power facility. / Courtesy of LG CNS

By Kim Yoo-chul

LG CNS is locked in fierce competition with domestic rivals Samsung SDS and SK C&C, but the provider of information technology services and corporate office solutions hopes it will do better abroad.

As one of several technology affiliates of the LG Group, the company is just beginning to benefit from efforts to carve a niche in the global market.

The expanded international presence comes at a critical time when policymakers are employing stronger regulations on inter-affiliate deals at conglomerates to help small- and medium-sized firms, and restore parity in competition.

LG CNS is winning orders from China, Japan, India, Malaysia and the Philippines and also in developing nations in South America.

As the company depends on corporate and government customers, being fast out of the gate in each market is crucial, and company officials believe they are managing to do just that.

While the entry barriers are higher in Europe and North America, LG CNS says it also doesn’t intend to miss out there.

``Growth will have to come from global markets. We are applying targeted strategies for different areas in different countries. Strengthening our ties with corporate partners like Microsoft and SAS is critical as well,’’ said LG CNS spokeswoman Choi So-young.

It’s critical for LG CNS to see quick returns from its global business. Its operating profit of 2.24 billion won for the first nine months of 2012 was well off the pace of the 24.3 billion won in 2011, as companies and government organizations cut their information technology budgets amid a worsening economy.

Choi said the company’s overseas annual revenue will account for half of its total by 2020, though she declined to give specific figures as the company is in the process of fine-tuning strategies.

The spokeswoman admitted that further talks are under way for capitalizing on North America, Japan and China, stressing its smart transportation systems and green solutions are receiving favorable responses from promising future clients.

The Middle East and South America are the main targets for LG CNS. Last year, the company won a deal from the e-government authority of Bahrain to implement a Business Licensing Integrated System there.

As of 2012, CNS had 16 bases in 11 countries. Asked about financial figures from its overseas affiliates, Choi said they’ve been seeing a gradual rather than a drastic increase.

While ties with governments are vital for the company to find new business chances, it is receiving additional support from Microsoft, a long-time ally for LG Electronics.

LG CNS CEO Kim Dae-hoon has agreed with Microsoft CEO Steve Ballmer to collaborate on motion detection technology.