Enterprise information systems

project implementation: A case

study of ERP in Rolls-Royce
Case Study published in International journal
of production economics (2004)

Presented by Tim Moir
Bus550
June 3, 2013
The rise of Enterprise
Resource Planning systems
The global economy requires internationalization of
operations

Requires flexibility

Decentralized operations

Managing globally


What does ERP do?
Increase the efficiency of an organization
Integrates separate functions such as manufacturing,
finance, procurement, distribution into one system
Allows standardization of information across the entire
enterprise, Information only entered once
Key Benefits
Business process automation
Timey access to management information
Improvement in the supply chain via the use of E-communication
and E-Commerce
Implementation
The biggest risk associated with a ERP is the implementation
Must be managed as an organizational change rather then a
software installation
The way a company operates must be changed to make the
implementation successful
Organizational resistance must be managed
ERP is very adaptable but not malleable
Bridge software to legacy systems

Rolls-Royce Pre-ERP
New acquisitions lead to dramatic increase in size
Global company
Facilities in 14 countries by 1995
New organizational structure in 1998 to better meet customer
needs
1500 systems, mostly internally developed
Expensive to create, difficult to manage
Data not accurate, consistent or accessible
In 1996 IT was outsourced to EDS
Rolls-Royce Implementation
Project
EDS provided the management team of specialists
Key SAP Consultants
Project team is broken down into smaller segments
Each Operational Business Unit (OBU) has own planning
team
Responsible for implementing working changes and training
Problems:
Cultural
Business
Technical
Cultural Problems
Need to ensure high acceptance across all areas of the
company
Illustrate improvements made by the company as a whole
Training split into two separate groups
SAP specialists conducted technical training
SAP specialist trained expect users
Other end-users were trained internally with EDS consultants
Training used demonstrations within the workplace, info
meetings, and presentations for all 10,000 employees

Business Problems
In order to ensure ERP works successfully, the business
practices must fit the system
The internal business process had to be redesigned
Consisted of four steps
(1) Mapping the current process
(2) Identify issues / problems in the mapping
(3) Compare the mapping and problems with ERP process to
identify issues in the new system
(4) Re-mapping to bring process inline with ERP
Why not make changes to ERP system?

Technical Problems
Key issue has been the accuracy of data
Data from Legacy systems needed to be upload
Data duplication major concern
Systematic process of taking old systems offline
Customer user interfaces created to bridge data
Nine principal business processes
Business Process Model
Release Strategy
Implementation team had to define a release strategy for the
entire project
Items to consider:
Third party software to be accredited by SAP
Business reports had to be justified and developed
Data had to be identified, validated, cleaned, loaded, and
archived
Additional Hardware needed (1000 new PCs, 6000 licenses,
servers)
Release Strategy
Phase 1 Strategy and Direction
Intense Study during Q1 of 1998
Determine scope of project
Outline Plan
Determine Cost
Steering Committee for financial guidance
ERP Core Team was formed to oversee implementation
process
Phase 2 Planning Analysis &
Convergence / Early Development
Created a detailed plan
Protg system installed
Series of High Level Process workshops to discuss various
business processes (involved 200 employees)
Another set of workshops Business Simulation (involved
300 employees) to forge relationship with ERP core team
Next steps included:
Preliminary design review
High level review
Critical design review
Implementation realization
Technical/Operation review
Post implementation review

Project Changes
Significant timing change made during Phase 2 The
implementation phases (Wave 1 and Wave 2 were deferred
for six months)
Changes due to:
Allow more time to prepare, train, and clean up data
Allow 5 additional months for pilot running and early
development
Allow additional time for completion of projects needed for
which ERP is dependent
Resolve difficulties with ERP at RR Allison division
Phase 3 Implementation
The implementation phase was to large to be carried out at
once
Broken into Wave 1 and Wave 2
Wave 1 involved replacing the legacy systems currently in
place with new systems
End of Wave 1 involved a pilot project at one RR facility
Successful Pilot project allowed full Go-Live company-wide
one year later

Phase 3 Implementation
Wave 2 lasted about one year in length
Not started until completion of Wave 1
Concerned engine assembly, spares, logistics and human
resources
Legacy were read-only
Once the ERP showed to work properly, old systems phased
out
Changes during Implementation phases involved legacy
systems.
Changes planned in a number of suites
Suites 1, 2, 3
In order to handle the adaption of the ERP from the legacy
systems a three step process
Suite 1
Plan the supply chain
Master schedule key program
Suite 2
Plan and schedule the factory
Schedule the shop
Plan 3
Operate the factory
ERP Pilot
3 months
Facility known a number 4 shop selected
Only produced 280 parts
Low numbers involved
Used as a test of the ERP system to demonstrate:
Business principles
Processes
Procedures
Role definitions and behaviors (including new roles)
Software, hardware, data transfers
Additional pilots


Pilot projects
System testing and user acceptance
Creating ownership of process
Testing, Testing and more Testing
Data verification
Typical going live issues:
User authorization
Processing delays
Data variances
System processing
Go-Live
Transferring legacy data
Stable environment for 10 weeks
Changes in data need to add to new system
Data can not be carried over and must start fresh
Old systems shifted to read-only
Constant monitoring of system to ensure proper operations
System overview
Project risks
Possible failure to align goals within organization
IT Hardware issues before or during implementation
Failure to provide adequate support
Resistance of change
Change not properly understood
Incomplete training
Data load issues
Project not given adequate priority
Maintenance issues
Financial data issues

Questions
What conditions let to the rise of the ERP?
(a) Global marketplace
(b) Decentralized operations
(c) Business flexibility
(d) All of the above

What is the biggest risk associated with ERP?
(a) Costs
(b) Implementation
(c) Strategy
(d) None of the above
Final Question
Which of the following was not identified as a key problem
(A) Cultural
(B) Business
(C) Procedural
(D) Technical

Thank you