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The purpose of this paper is to discuss the implementation of an enterprise

resource planning (ERP) system within Rolls-Royce plc. as described by Yusuf,


Gunasekaran & Abthorpe (2004) in their article Enterprise information systems
project implementation: A case study of ERP in Rolls-Royce. The data in their paper
was gathered using the case study methodology.
Rolls-Royce is a British Multinational Power Systems Company with over 100
years experience in providing power for use in the air, on land and at sea (RollsRoyce, 2015). As Yusuf et al., (2004) describe, the company experienced a series of
acquisitions between 1987 and 1995, and in 1996 the company decided to outsource
its Information Technology (IT) department to electronic data services (EDS). The
factors that determined this decision were: the incapacity of legacy systems to offer an
on-line connection with the customers, partners and suppliers, the increasing numbers
of orders and the need to change their approach in order to please their customers and
maintain their competitiveness, the external requirements for using ERP within the
Aerospace and Defence Industry and the previous introduction of SAP R/3 at the
facility in the US.
The implementation of the new ERP was conducted by a team consisting of
EDS specialists and SAP consultants, internal managers and staff, and additional ERP
planning team for every operational business unit within the company. The
implementation process was conducted in three phases.
Phase 1 consisted of an intense analysis of the companys needs. Based on this
analysis it was developed a plan for ERP implementation and the costs associated
with it.
Phase 2 consisted of development of a more detailed plan and the installation of a
prototype system. The activities conducted during this phase included: preliminary,
high level and critical design review, implementation realisation, technical review and
post implementation review.
Phase 3 involved the fully implementation of the new system together with
changes associated with the working practices. This phase was split in two waves:
firstly, they worked towards the replacement of the old systems, and ruled a SAP pilot
project; secondly, the implementation team switched the legacy system with the SAP
R/3 after about 1 year.
Out of the three phases, the second phase was the most challenging one and
involved the most changes to the in-use system. These changes were adopted in three
stages and included changes at a process level as well as changes regarding the name
of the departments, processes or activities, in order to fit within the SAP framework.

(Yusuf et al., 2004)


At the beginning of the partnership between Rolls-Royce and EDS, RollsRoyce outsourced their IT department and empowered the EDS to reorganise the
structure of the organisation in order to fit the new system. As a result, in 1998 the
structural hierarchy was flatten and the company was overall controlled by an
Executive Group, customer focused business units (CFBU) focused on sales, and
operational business units (OBU) responsible for the manufacturing support for
producing the product (Yusuf et al., 2004). The outsourcing of IT department and the
changes in the organisational structure designed by the EDS specialists and SAP
consultants are a useful framework for a successful implementation of an ERP
system. In fact, according to Piccoli (2012) the structure of an organisation and the
relationships between the employees and organisational departments are crucial
factors to be considered before, during and after the implementations of an ERP.
In Rolls-Royce case, the software adopted was SAP R/3. In order to be a
suitable environment for this software, and to avoid the present and future costs
associated with a modified SAP software, Rolls-Royce had to undergo a third-order
change (Piccoli, 2012). They successfully did this by using an internal business
process re-engineering programme (Yusuf et al., 2004). As a result of this programme,
the way in which Rolls-Royce used to conduct the business processes had to change
to be in line with SAP R/3. According to Pearlson and Saunders (2009) this was a
favourable moment for enrolling in a change process conducted by a team from the
outside - because the company was experiencing a lack of capacity to effectively
manage resources in order to complete the orders on time; they did not have the
knowledge and the necessary license to implement their own ERP system and their
main concern was to be able to continuously manufacture turbine engines (Yusuf et
al., 2004).
In addition to the business problems (Yusuf et al., 2004) the implementation
team experienced problems regarding the formats in which data was stored in the inuse system. Some of them were not compatible with the format used by SAP R/3 and
the team had to develop interfaces between the system in order to facilitate the
transfer of files to the data repository within SAP R/3, developed for aerospace and
defence industry (Yusuf et al., 2004).

As part of the challenges encountered by the Rolls-Royce and the ERP

implementation team, a series of cultural problems (Yusuf et al., 2004) were


emphasised, especially the fact that the employees were reluctant to fully appreciate
the new system. They were more attached to the legacy systems (Yusuf et al., 2004)
and their basic assumptions (Schein, 1983) about the best practices associated with the
business processes stopped them from fully appreciate the benefits of the new system.
This barrier contributed to their resistance to change that plays a crucial role in the
success of ERP implementation (Hong & Kim, 2002). The implementation team
acknowledged this problem and added extra training sessions focused on emphasising
the benefits of the new system over the working experience.
The data presented in the article does not reflect the post implementation
period fully and its accuracy might have been affected by the authors subjectivity
(Flyvbjerg, 2006). However, the ERP implementation seemed to be successful within
Rolls-Royce. The old system was only available in view-only mode to allow
comparison of data, by the end of implementation period (Yusuf et al., 2004).
Moreover, EDS team anticipated various risks associated with the new system, how
the system will be accepted and used by the company and developed a risk register.
This register was meant to stock all the problematic issues within the company. The
implementation team reviewed and addressed them periodically in order to support
the success of ERP implementation. By doing so, it can be said that the team was
interested in constantly coordinating the organisation with the information system and
the system with the changes experienced by the organisation which contributes to the
success of an ERP implementation (Piccoli, 2012)
All in all, the SAP R/3 was successfully adopted by Rolls-Royce in Britain and
the team responsible for its functionality seems to be willing to constantly assess
evolution within this company. However, as Yusuf et al., (2004) noted, in order to
support this conclusion it is necessary to conduct an evaluation of the ERP
sustainability during the post implementation period.

References:
Flyvbjerg, B. (2006). Five Misunderstandings About Case-Study Research.
Qualitative Inquiry, 12(2), pp.219-245.
Hong, K. and Kim, Y. (2002). The critical success factors for ERP implementation: an
organizational fit perspective. Information & Management, 40(1), pp.25-40.
Pearlson, K. and Saunders, C. (2009). Strategic Management of Information Systems.
4th ed. John Wiley & Sons.
Piccoli, G. (2012). Essentials of Information Systems for Managers. John Wiley &
Sons, Inc.
Rolls-Royce,

(2015).

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<

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Schein, E. (1983). The role o f the founder in creating organizational culture.
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Yusuf, Y., Gunasekaran, A. and Abthorpe, M. (2004). Enterprise information systems
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Economics,

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pp.251-266.

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