Çağrı Sarıgöz Honam Petrochemical’s Quest for Better Management Reports

Lotte Chemical Corporation ● Incorporated on March 16, 1976 with name “Honam Petrochemical Corp.” ● Headquartered in Seoul (South Korea) ● Overseas branches in Hong Kong, Russia, and USA, along with the sales corporation in China ● 4,556 employees at 2015, was 1,700 at 2011 ● Market Cap: $6.8 Billion as of May 2015 Had 2 mergers & 6 acquisitions in last decade: ● 2004 - 2010: Acquired 6 companies from Korea, UK, and Malaysia ● On January 1, 2009, the Company merged with Lotte Daesan Co., Ltd. ● On December 27, 2012, the Company merged with KP Chemical Corp. ○ Changed its name to “Lotte Chemical Corporation” Sources: http://english.lottechem.com/contents/financial/annualreport.asp http://www.forbes.com/companies/lotte-chemical/

Overseas Branches & Sales Locations of Lotte

Market Performance of Lotte - Lotte Shares in KRW vs USD/KRW Rate Source: http://www.bloomberg. com/quote/011170:KS

Financial Metrics of Lotte Source: http://english.lottechem.com/contents/financial/summaryFinance_01.asp

The problem - Need for Management Reports ● The company was expanding globally in the beginning of 2010s ● Needed reliable reports to ○ Measure management performance ○ Provide useful, accurate information to increase profitability

The problem - Existing System ● Data in the reports were out-of-date ● Individual managers were manipulating performance data to “look good” ○ The biggest “people” problem about the system (*Q2 - Part 1) ● Data were presented only on periodic basis

The problem - What Executives Wanted ★ Q1 - Information Requirements ● Anytime access to ○ Accurate ○ Timely ○ Relevant data ● Cross platform access to data via ○ Web ○ Mobile devices ● Enterprise-wide data accessed and shared easily across business units ○ to support global expansion

The Solution - New Reporting System Integration of New Technologies on already used SAP’s ERP system ● SAP BusinessObjects Dashboards ○ Performance management, planning, reporting, query and analysis, and enterprise information management ○ Provide self-service access to data from databases and Excel spreadsheets ● SAP BusinessObjects Web Intelligence ○ Ad hoc query, reporting, and analysis tool ○ Used to create queries or use existing reports, format retrieved information, and perform analysis to understand trends and root causes. ★ Q5 - Tools

The New System - Issues to be Addressed ★ Q2 - Part 2 ● Management ○ Developing new business processes ○ Monitoring implementation of the system ○ Allocation of human and financial resources ● Organization ○ Training end-users of the system ○ Cultural changes: Faster, Data-driven ● Technology ○ Building the system according to Information requirements ○ Making it user-friendly

The New System - User Friendly Design ★ Q2 - Part 3 ● Highly intuitive web-based user interface ○ very accessible system ● Required little training on how to use the system

The New System - End Users & Other Steps ★ Q3 - Involvement of End Users ● Interview and discuss with involved departments ○ Processing and reporting the relevant data ● Run campaigns to make sure managers are using the new system Without involvement of end users, the new system could have ● Less refined & less relevant data for decision making ● Inaccurate or untimely data appearing on executives’ dashboard ★ Q4 - Other Steps ● Benchmarking with other companies ○ Similar data and performance indicators

The New System - Phased Approach ★ Q5 - Methods ● Phased Approach ○ Waited for gaining experience on the new system ○ Making sure that data is accurate and timely ○ Then push the new system on executives’ dashboards

Impact - Benefits & Changes ★ Q6 Immediate benefits ● Executives no longer were limited to sanitized, stale data in an outdated presentation format. ● Management discussions and decisions are based on timely, consistent, and accurate company- wide data. Changes in the way company operates ● Personalized and differentiated dashboards and reports for ○ High-level executives ○ Middle Managers ○ Front-line employees ● Data-driven decision making supporting global expansion

Thank You