FEASIBILITY ANALYSIS

Feasibility Analysis



Executive Summary

Economic globalisation and internationalisation of operations are essential factors in integration of suppliers, partners and customers within and across national borders, the objective being to achieve integrated supply chains. In this effort, implementation of information technologies and systems such as enterprise resource planning (ERP) facilitate the desired level of integration. There are cases of successful and unsuccessful implementations. The principal reason for failure is often associated with poor management of the implementation process. This paper examines key dimensions of implementation of ERP system within a large manufacturing organisation and identifies core issues to confront in successful implementation of enterprise information system. A brief overview of the application of ERP system is also presented and in particular, ERP software package known as SAP R/3, which was the ERP software package selected by Rolls-Royce plc. The paper takes an in-depth look at the issues behind the process of ERP implementation via a case study methodology. It focuses on business and technical as well as cultural issues at the heart of the Rolls-Royce implementation. The case study also looks at the implementation time scales and assesses the benefits from the project both tangible and intangible.

Introduction

Rolls-Royce returned to the private sector in 1987 and acquired Northern Engineering Industries in 1989. This acquisition allowed Rolls-Royce to consolidate its capabilities in the area of industrial power. A further acquisition was made in 1995 when Rolls-Royce bought the Allison Engine Company in the United States, thus enlarging the company's presence in aero propulsion and industrial gas turbines. The acquisition allowed Rolls-Royce a major foothold within US markets. The most modern family of engines is the Trent series, which are also powerful three-shaft turbofan engines similar to the RB211, and are used to power the Airbus A330, A340-500/600. The Trent series of engines offer greater thrust, long range flight capabilities and economical operating and maintenance costs. The Rolls-Royce Power Generation Market includes both electrical and nuclear power, which also includes marine applications, such as providing power plants for nuclear and naval vessels. Rolls-Royce is a truly global business offering a range of first class world leading products. It has facilities over 14 different countries and also offers first rate after sales services, covering mechanical overhauls and spare part distribution. In March 1998 a new organisational structure was adopted that recognised the strategy and the need for change to reflect customer requirements.

Problem Definition

Rolls-Royce used over 1500 systems before the ERP project was started, many of which were developed internally by Rolls-Royce over the last two decades. These legacy systems were expensive to operate and difficult to maintain and develop. They did not provide accurate, consistent and accessible data that was required for good and timely decision-making and performance assessment (e.g. delivery performance, quality metrics). These ageing systems often did not lend themselves fully to a modern manufacturing environment. Some of the legacy systems were so old that they had year 2000 compliance problems. Work within Rolls-Royce was functionally orientated and various departments worked in ...