Background Of Rolls Royce Information Technology Essay

compass Of Rolls Royce In melodic lineation Technology Essay randomness Technology in a flash a day is growing in rapid pace. Almost e rattling atomic number 18a and the activities in this orbit argon being attached with the selective information Technology. seam government activitys great dealnot survive in this matched world with away using some form of engineering science however, they must direct to workout technology strategically in order to have their existence for a long margin. In this try out I am going to present the case of one of a large, power engine manufacturing face ie, Rolls Royce. This essay get out discuss some the scenario of Rolls Royce with its clay before the machineation of Enterprise Resource Planning (ERP) corpse, why the organisation felt need for executing of ERP and what ar the vocation benefits they argon able to get with the strategic implementation of ERP and how.IntroductionTodays worry organisations pose themselves in a to a greater extent(prenominal) vibrant and combative environment. Business leading have responded to these by laying more emphasis on technology so as to continue with smooth and efficient running of rail linees and gaining war give c ar receiptss.Computer based information systems have been very popular in recent years, organisations like Rolls Royce have stake most of the duty trading surgerys on Enterprise Resource Planning (ERP).ERP is an information system that integrates financial, substantive and human resources of an organisation, it also facilitate information flow amongst varied bank line functions and connection to immaterial stake holders.This paper ordain render to desert the implementation of ERP by Rolls Royce, understand the stock needs of ERP, and perish but not the least the by and bymath implementation of ERP.Background of Rolls RoyceRolls-Royce is a multinational association which manufactures power solutions for the guests in aerospace , marine and energy marketplaces. The founders of this company be Henry Royce and Charles Rolls. The brand name Rolls Royce came after their surnames. The company came into existence about 100 years before. It is first established with the intension of manufacturing the topper car in the world. Later on Rolls Royce organisation slowly expands its personal credit line in various markets, its name and brand was extended and now it has its manufacturing industries placed in 20 different countries and has its customers in more than 120 countries.1 outright it has became one of the worlds largest power engine manufacturing companies. genius of the main reasons behind their conquest is the strategic utilization of technology to compete in this calling world. though its main headquarter is in UK 45 % of their employees ar based outside the UK. They are running a civil aerospace art from UK with emerging capabilities in Ger legion(predicate) and the US. They are growing up day by day. All the transactions, interde break apartmental coordination, coordination with their supplier, consumers and customers are retained wholesome and utilely and it is possible for them only by using modern technologies to communicate, gather and offshoot the information. Rolls-Royce Group plc, Annual report 2009.They examine forward to their customers need for the next 30 to 40 years and do research in the technology to stay private-enterprise(a). They are having good market strength with many convergences and many customers. It produces goods as well as leave alones go to its customers in fact, serve are the most important part of their business it accounts for nearly above half of their revenue every year. So in that location is the great importance of real term entropy management which enables them to be predictive and they can immediately react to the issues related to the engine that comes for the service.2 training governing body development Technology (IT) and Information System (IS) are part of each other. Information system is the computerized program which collects data, processes it and gives the lend oneselfful information. This information can be employ for various purposes to add up the nurse in the business. It can be used for report generation, planning, decision making, business operation and which further will lead the organisation to obtain agonistic advantage. auspicate Strategic Framework3Information technology has become one of the largest components where organisations are investiture their capital. Most of the business organisation are wisely investing large sum of money of their bills in information systems. The wise preference of coronation can outperform competitors and if it was the poor choice then it will be nothing more than wasting their valuable capital. Laudon (2006).Today the world is getting smaller and smaller this is because of the information technology and hence contest in the businesses is rising day by day. So to gain the competitory advantage, strategic use of information system is the must no social occasion it is smaller business organisation or the larger. According to Brooks (2003), adding comfort to the business means to extend products, decrease the hail, improve the quality of services and products and so on. The reason for adding value to the business is to attract more customers, and keep organisation in a better place in the market. The use of Information technology and information system has become the efficient and more common way for adding value to the organisations of todays business world. Only the use of IT system is not sufficient to add value and to take competitive advantage of it, the strategic use of IT System is the most. According to WU J (n.d.), ERP system is such(prenominal) a strategic fauna, which integrates information and information-based processes within and across functional areas in an organization.Rolls Royce was using inform ation system since long. It was using 1500 systems before using ERP (SAP R/3), many of those systems were built internally by Rolls-Royce in pop off both decades. Those systems were costly to operate and not easy to maintain. They didnt give precise and still result because these systems were not centralised and using the values from different systems will give inconsistent result. Looking at all these problems Rolls-Royce formed a matchship with electronic data services (EDS) in 1996 and EDS was prudent for the development of ERP for Rolls Royce Yusuf Y, Gunasekaran A and Abthorpe MS (2004). Though there are many implementation unwieldyies such as cultural difficulties (Training of sweet system to the employees), business difficulties (modification of working to fit in the ERP) and technical problem (transferring of previous records into the new system and to reach the consistent stage), Rolls Royce needs to implement the ERP because they knew the necessity of the centralise d, robust, accessible and accurate system to gain the competitive advantage and to improve their return chain.ERP combines all departments unneurotic into a single system in a single computer. It uses internet technology and it can be accessed by charge department and authorised personnel anytime from anywhere so interdepartmental conference can be done easily and efficiently and hence optimizes the time and the cost.Impacts of ERP Implementation in Rolls RoyceAccording to the annual report (2009) of Rolls Royce Our process integrity and approach journeys continued throughout 2009. Our joint venture engine modernize facilities, Hong Kong Aero Engine Services curb (HAESL) and Singapore Aero Engine Services Limited (SAESL), were the latest to benefit from the rollout of the enterprise resource planning (ERP) and SAP process systems. Rolls Royce has implemented and is making use of information systems very efficiently and efficaciously that is why they are in the apex of succ ess today. Rolls Royce is making use of ERP for talk, decision making, to manage their business operations, improve value chain, to reduce competitive forces and as a whole to gain competitive advantage.We will now discuss one by one how Management Information System (MIS) like ERP will help the business organisation to gain the advantages maintained above and we will see the impact of using ERP in the Rolls Royce. parleyOne of the critical factors which lead the organisation towards its success is the effective communication (intra-organisation and inter-organisation). Employer and managers of todays business organisation must have to be familiar with the effective communication techniques for the success of the organisation. And effective communication has become an important tool for the organisations success. ERP boost the communication between the functional boundaries within the organisation. Rolls Royce is efficiently and effectively using this advantage put upd by ERP. Rol ls Royce is also a service provider to its customers. When customers demand services to be delivered in more timely and blameless way, organisations must overcome functional boundaries to meet this challenge.Rolls Royce is widely spread in different countries and all of its organisational functions are not carried out in a single place. ERP helps the effective communication within different departments and between their suppliers, customers as well as with their partner organisations. And this obviously adds value to the organisation by reducing the research time, providing the accurate and the optimized reports and minimizing the communication cost. Lets take an example, Rolls Royce uses Suppliermanager website to pull together all the information their supplier needs. They are using SABRe which shows the external part of the Rolls-Royce Quality Management System, and is applicable to all its suppliers or partners who are providing products or services that effect upon Rolls-Royce and its customer requirements.4By using these dodging of using information system and providing the information, Rolls Royce is minimizing the cost and time for the communication.Decision weeDecision Making is one of the important factors in every business organisation. Again the decision is made with the help of report generated by the Information System. One of the major advantages of using good information system like ERP is that it make ups the speed of decision making within an organisation and provides the circumstances to shoot faultless decisions in strategic, managerial as well as running(a) level.Lets take the case of Rolls Royce, the legacy systems used in Rolls Royce did not provide accurate, consistent and accessible data that was required for good and timely decision-making and public presentation assessment. Those old systems mostly did not fit to the modern manufacturing environment. But in the ERP system a data warehouse (integrated collection of data) is cr eated. Data is stored centrally and is extracted from different databases. The data is monitored, edited and then finally standardised for hereafter use. The data is kept in a logical and user cozy format. It also allows nontechnical users to queries the databases which allow and provide the management information for business intelligence and helps Rolls Royce for operational, managerial and strategic decision making Yusuf Y, Gunasekaran A and Abthorpe MS (2004).Business Process ManagementBusiness Process is the set of activities carried out by a business organisation that is initiated by an event, transforms information, materials, or business commitments, and produces an output Harmon (2003). Business Process Management is the process of managing the activities of business process. One of the major benefits of using ERP is the business process automation. So, ERP can be very useful for the management of business process, in fact, ERP itself defines the business process because the organisations business process is integrated in the ERP system. Rolls Royce had also faced difficulties to change their business process in order to fit the SAP. But they need to implement the ERP to automate their business process, to access accurate management information in less time and to add value in their supply chain. abide by ChainFigure Value Chain in an Organisation adapted from doorman ME (1985) Competitive Advantage Creating and Sustaining Superior Performance, Free PressThe value chain simulate includes the exact activities in business organisation where we can apply the competitive strategies door guard ME (1985) and where we can implement the information system effectively to gain competitive advantages. These activities of the organisation defined by value chain model are distinguished in two different categories indigenous activities andSupportive activitiesPrimary activities are those activities which are involved in the process of exertion and dispersion of the organisations product and the services. Those activities shown by the value chain model are inbound logistics, operations, outbound logistics, sales and marketing and services. Inbound logistics define the receiving and storing of the materials for the production of the goods. operations define the process to convert the inputs to the end products. Outbound logistics define the storing and distribution of end product. Sales and marketing describes the promotion and selling of the outbound logistics and last but not the least is the services which includes after sale reconstruct and maintenance of the end products. Supportive activities support for the successful outcome of the direct activities which includes infrastructure of organisation (administration and management), human resources (recruitment, hiring and training of employees), technology (technology used for the improvement of product and production process) and procurement (gathering inputs for the organisation) Laudon (2006).ERP system connects every department of the organisation with each other so every activity can be monitored at any time. The information about those activities provided by ERP system is used to find the point in the value chain where the cost can be lowered and value can be added. Moreover, it can be used to tie up the organisations supporting bodies such as suppliers, customers, partner organisations and distributers and the value chain of the organisation will be linked with the value chain of its supporting bodies. The use of the information system for the linkage between value chains will enable the organisation to reduce the cost for inventory and to response the customers demand promptly.Competitive ForcesFigure Competitive Forces adapted from Porter ME, Harvard Business review, January 2008According to Porters competitive force model there are five major forces that are acting upon any business organisation which tries to diminish the organisations performance and these forces must be made ineffective by the organisation in order to survive in the market. These five forces arePossibility of new entrance of competitorBargaining power of customerBargaining power of supplierSubstitute products or services office of the existing competitorsDifferent strategies can be applied to reduce these forces. And use of information system can make ease for the organisation to congeal the strategy that should be applied in order to gain the competitive advantage.Rolls Royce has very low risk of new entrants. Because of their brand name and their well establishment make hard for the possible competitor to compete with Rolls Royce. The luxuriously initial investment cost will also discourage the threat of new entrants into this market. Rolls-Royce collects real-time data of their engines which are direct all nigh the world. By analysing, sharing and acting upon this information, they can optimise the performance of their engines in service Rolls-Royce Group plc, Annual report 2009. They have such a good information system to take care of the services call for by their customers, which reduces the bargaining power of customers and threat of substitute product and services. Information system in Rolls Royce and their direct communication with the suppliers are also helping them to maintain good relationship with their suppliers minimising their bargaining power. Rolls Royce is operating its business in a very competitive market in response to its competitors such as Pratt and Whitney, General Electric, CFM International. That is why they invest large amount of money for research and technology to differentiate themselves from their competitors.Rolls Royce has developed a balanced business portfolio and continues to maintain a steady focus on improvement in operational performance by modernisation of its facilities and focusing on managing the cost of operations and products. Continual investment in technology and strong safeifi cation of intellectual property, together with the establishment of long-term customer relationships, allow the Rolls Royce to make its products and services different from its competitors Rolls-Royce Group plc, Annual Report 2009. One of the examples for their investment in technology is the implementation of ERP re wretched their old systems investing huge amount of money in it.Competitive AdvantageIn a fair sentence, we can define competitive advantage in the business term as the advantage gained by a company in the market competition with their competitors. Any organisation can gain competitive advantage over their competitor by the following meansReducing their production cost and then the cost of their product,Improving the quality of their product,Providing good after sale services,By differentiating their products from the product of their competitors,Growth of the companyCompanies that successfully demasculinise their business around IT can achieve a significant window o f competitive advantage Tapscott D (2004). This doesnt mean that all those companies who use IT and IS in their business processes can gain competitive advantage but, the organisation who smartly and strategically use IT and IS will certainly gain the competitive advantage.Rolls Royce is operating in the market which wants them to deliver increased value in terms of cost, quality and delivery performance. So they always try to minimize the cost, increase the quality of their product and promptness in services. Management information system like ERP implemented in Rolls Royce provides the relevant information which directly or indirectly helping them to achieve those advantages. ERP benefits Rolls Royce to control the business operations and helps cost reductions. It is used for real time data management which also helps them to provide good and on time service to their customers. For instance, real time data management enables them to be more predictive they can know when engines are going to come along and they can provide the exact put through time for the aircraft and the maintenance. According to the article by Ashford W (2007), the CIO of Rolls Royce, Mr Jonathan Mitchell states that We have traditionally operated factories independently, but the standardisation of systems and processes means we can now operate more effectively at the global scale. ERP is the integrated system for business processes so, moving of the factories, expanding the business and production throughout the globe is not so difficult. They have got a different department for the research purpose only, which always flora on how to add value to the products? They are trying to make their product different from other competitors by inventing the engines that produce less pollution and without the touch information provided to them it wont be possible for them to carry out these tasks. shoemakers lastThe niche behind the success of Rolls Royce in its market place is the implementati on of the latest technologies and the information system in its business processes, which provide a message to those who think that, investment in the IT and the IS is nothing but just waste of the organisations capital. Rolls Royce were using many systems since long however, looking at the feasibleness and importance of ERP in strategic decision making, business process and connecting their departments as well as business functions, they invested large amount of money for growing and implementing ERP system replacing the old systems.The smart integration and implementation of Information System and Information Technology in a business organisation and its processes will lead it to the competitive advantage in its industry. Its very difficult to find any organisation which has faced up to the failure in spite of strategic implementation of IS in its business processes.