Managing Global Systems Case Study

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Chapter 15 Managing Global Systems

Case 1: Daum Runs Oracle Apps on Linux

Tags: Oracle, Linux, Daum, FIN, HRMS, Applications, ERP systems, globalization.

Summary

Oracle At Work: Daum Communications, one of South Korea’s largest internet content delivery and services
provider runs Oracle FIN & HRMS on Linux to maximize business efficiency. L=3:51

URL: http://www.youtube.com/watch?v=ayZ3OLmjAp0

Case

Daum is one of the most popular web portals in South Korea. The company offers many Internet services to
web users, including a popular free web-based e-mail, messaging service, forums, shopping and news.
Daum’s success is a reflection of the high level of Internet use in South Korea. The country has the highest
level of broadband users, and one of the most widespread levels of computer and Internet access.

The popularity of Daum stems from the range of services it offers, but also from the fact that it was the first
Korean web portal of significant size. Daum merged with the then most popular e-mail service, daum.net or
hanmail.net. After the merger, Daum started the forum service DaumCafe which solidified its status in the
South Korean Web site market. The terms cafe and even internet cafe, which is different from its meaning in
western usage, are now used as synonyms for “Internet forum” in Korean as a byproduct of Daum’s success.

On August 2, 2004, Daum announced the purchase of Lycos for $95.4 million. The company had more than
1,200 employees as of June 2008. Because of acquisitions like this and other attempts to expand worldwide,
Daum began to feel constrained by their disparate range of software packages and scattering of key data.
They sought out Oracle and installed an ERP management platform based on Oracle E-Business Suite.

Oracle Corporation’s E-Business Suite (“EB-Suite” or “EBS”) consists of a collection of enterprise resource
planning (ERP), customer relationship management (CRM), and supply-chain management (SCM)
computer applications either developed by or acquired by Oracle. The software utilizes Oracle’s core Oracle
relational database management system technology.

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The E-Business Suite contains several product lines, including Oracle CRM, Oracle Financials, Oracle
HRMS, Oracle Logistics, Oracle Mobile Supply chain Applications, Oracle Order Management, Oracle
Transportation Management, Oracle Warehouse Management Systems. Each product comprises several
separately licensed modules.

Significant technologies incorporated into the applications include the Oracle database technologies (engines
for RDBMS, PL/SQL, Java, HTML and XML), and the “technology stack” (Oracle Forms Server, Oracle
Reports Server, Apache Web Server, Oracle Discoverer, Jinitiator and Sun’s Java).

After Daum’s installation of Oracle E-Business Suite, the company was able to settle accounts 6 times as
quickly, improve their financial reporting systems, integrate the company’s accounting, sales, billing, and
online shopping systems, and reduce the work required to perform payroll bookkeeping by more than half.
And since Oracle’s systems run on Linux, the system cost about one-tenth as much as comparable Unix-
based ERP systems.

Case Study Questions

1. What efforts is Daum making to expand globally? In what countries does it maintain a presence?

2. Why was Oracle a good fit for Daum?

3. Describe the benefits of Linux as opposed to other operating systems.

4. What kind of broadband infrastructure does South Korea have? What does this mean for Daum?

5. What more can Daum do to gain ground on its competitors?

Copyright © 2009 Kenneth Laudon. Copyright © 2009 Pearson Education.