Korea Electric Power Corporation (KEPCO) is preparing to start on a project that involves construction of $251 million (300 billion KRW) worth business system that will be the biggest ever in South Korea’s public agencies’ history.
It will go through a preliminary feasibility test and send out an order for the project sometime during the first half of 2021. Because it is looking into adopting various solutions instead of upgrading its current SAP ERP (Enterprise Resource Planning) software, it is expected that domestic and foreign ERP vendors will have intense competitions against one another in order to win the bid.
“We applied for a preliminary feasibility test regarding construction of a next-generation business system that will upgrade our current ERP software.” said a representative for KEPCO. “We will be able to receive a result back from a preliminary feasibility test by the end of this year at the earliest and we expect that we will send out an order sometime early 2021.”
It has been 15 years since KEPCO introduced SAP ERP and it took 3 years just for a process innovation (PI) to introduce a next ERP software. KEPCO chose a consortium led by Samjong KPMG as the consortium that will be in charge of PI at the end of last year and applied for a preliminary feasibility test after completing a PI recently.
Relevant industries are keen on the direction that KEPCO will take regarding its next ERP software.
KEPCO was involved in a dispute with SAP regarding a license issue in 2016. SAP filed a lawsuit against KEPCO through the International Chamber of Commerce’s International Court of Arbitration while alleging that KEPCO violated an ERP license agreement between them. In 2019, the court ordered KEPCO KDN to submit materials regarding KEPCO’s use of SAP ERP software to SAP. Although the ball is now in the hands of KEPCO KDN, it will be interesting to see whether KEPCO will introduce an upgraded version of SAP ERP software as its next ERP software while the lawsuit is still in progress.

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<Korea Electric Power Corporation’s headquarters in Naju Innovation City >

KEPCO decided not to settle on a specific solution as its next ERP software.
“Rather than deciding on a specific solution, we decided to include necessary features into our request for proposal (RFP).” said a representative for KEPCO. “We will either choose a company or a product that satisfies most of features that we included in the RFP.”
The industry believes that KEPCO will invest about $251 million in purchasing an ERP software and constructing necessary systems such as hardware. This investment is the biggest ERP project for a public agency in the last ten years.
As a result, domestic and foreign IT service providers and ERP vendors will have intense competitions against one another in order to win the bid from KEPCO.
KEPCO’s current ERP software is built by LG CNS and SAP. LG CNS developed its own ERP software in 2018 and entered the ERP market. It is expected that top ERP vendors such as Douzone and YoungLimWon Soft Lab from South Korea and foreign ERP vendors such as SAP and Oracle will have their eyes on KEPCO’s project. Although SAP is still involved in a lawsuit with KEPCO, there is a high chance that it will still participate in the bid because its understanding in current ERP software used by KEPCO is very high and KEPCO’s project is a large-scale project.
“As relevant workers in the industry recently finished up Samsung Electronics’ next ERP software project, they will likely flock towards companies that are preparing to win the bid from KEPCO.” said a representative for the industry. “There is a high chance South Korean IT service providers and domestic and foreign ERP vendors will form consortiums and participate in the bid.”
Staff Reporter Kim, Jiseon | river@etnews.com & Staff Reporter Byun, Sanggeun | sgbyun@etnews.com