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IMPLEMINTATION OF IT IN
ROLLCE ROYCE –“IOT”
INTERNET OF THINGS
Warsaw University Of technology
Faculty of Global Production engineering
and management
ICT and CAx in Production
Academic advisor: Prof. Dr. Jerzy
Krawiec
Authors,
Submitted on: 29.01.2017
Winter Semester
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Table of contents
1. INTRODUCTION.....................................................................................................................................................................5
COMPLIANCEWITH THE ITSTRATEGY IMPLEMENTATION....................................................................................................................6
ROLLS ROYCEINFORMATION SECURITY (POLICY)................................................................................................................................7
PROJECT DEFINITION.........................................................................................................................................................................8
THESCOPEOF THE PROJECT..............................................................................................................................................................9
SUB PROJECTS..................................................................................................................................................................................9
CHARACTERISTICS OF THEPROJECT..................................................................................................................................................10
ROADMAP OF THEORIGIN TO TOTALCARE........................................................................................................................................10
PROJECT LINKS...............................................................................................................................................................................13
SOCIAL AND ECONOMIC ENVIRONMENT...........................................................................................................................................14
IDENTIFIED PROBLEM......................................................................................................................................................................15
GENERAL OBJECTIVEOF THEPROJECT ..............................................................................................................................................15
OUTCOME INDICATOR....................................................................................................................................................................16
PRODUCT INDICATOR.....................................................................................................................................................................17
2. TECHNICAL ANALYSIS.........................................................................................................................................................18
TECHNICAL CAPABILITIES.................................................................................................................................................................18
THEFUNCTIONALITY.......................................................................................................................................................................25
ANALYSIS OF EXISTING ITRESOURCES..............................................................................................................................................25
DEVELOPMENTOF TARGET STRUCTURE OF ITSYSTEMS.....................................................................................................................26
SERVER ROOMADAPTATION ...........................................................................................................................................................28
PREPARATION AND IMPLEMENTATION OF NEW SYSTEMS..................................................................................................................29
TECHNICAL ASSUMPTION................................................................................................................................................................30
COMPLIANCEWITH RULES IN THEFIELD OF ITPROJECT.....................................................................................................................30
FUNCTION OF INTERNET OF THINGS TOTALCARE ...............................................................................................................................34
PROJECT MANAGEMENTMETHODOLOGY.........................................................................................................................................35
INNOVATIVE BUSINESS MODEL........................................................................................................................................................37
3. FINANCIAL ANALYSIS .........................................................................................................................................................42
ASSUMPTION AND METHODOLOGY .................................................................................................................................................42
EXPENDITURES FOR THEPROJECT....................................................................................................................................................43
EXPENDITURE FOR THEPROJECTIN THEYEARS..................................................................................................................................44
DISCOUNTED VALUEOF EXPENDITURE OF THEPROJECTIN THEYEARS................................................................................................45
BENEFIT COST RATE .......................................................................................................................................................................46
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THERESIDUAL INCOME...................................................................................................................................................................46
THEAMOUNT OF DISCOUNTED RESIDUAL VALUE..............................................................................................................................48
OPERATING INCOME.......................................................................................................................................................................49
4. RISK MANAGEMENT ..........................................................................................................................................................52
RISK ASSESSMENT CONCEPT ...........................................................................................................................................................52
RISK ASSESSMENT PROCESS............................................................................................................................................................53
SELECTION OF RISK ASSESSMENTTECHNIQUE ...................................................................................................................................55
COMPARISON OF RISK ASSESSMENTTECHNIQUES.............................................................................................................................56
RISK ASSESSMENTTECHNIQUE.........................................................................................................................................................58
5. SOCIAL ECONOMICS AND ENVIRONMENTAL ANALYSIS ............................................................................................59
ANALYSIS OF THEENVIRONMENTAL IMPACT.....................................................................................................................................59
SOCIAL AND ECONOMIC ANALYSIS...................................................................................................................................................60
WASTEREDUCTION........................................................................................................................................................................60
SOCIAL AND ECONOMIC GAIN.........................................................................................................................................................61
6. CONCLUSION .......................................................................................................................................................................63
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List of figure
Figure 1: Road Map at Rolls Royce, ......................................................................................... 11
Figure 2 Source: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:em0028 .... 14
Figure 3 Cloud backup system................................................................................................... 19
Figure 4 Company ISO system.................................................................................................. 24
Figure 5 Roles of existing IT System......................................................................................... 25
Figure 6 Development of target structure in IT system.......................................................... 27
Figure 7 Server Room................................................................................................................. 28
Figure 8 Implementation stage .................................................................................................. 29
Figure 9 OPC UNIFIED ............................................................................................................. 33
Figure 10 Function of IOT ......................................................................................................... 34
Figure 11 Prince2 methodology ................................................................................................. 36
Figure 12 Own Illustration......................................................................................................... 38
Annexe 1. 13 Scheduled by Gantt chart, Source: own Illustration ....................................... 64
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List of abbreviation
IOT Internet of Think
CSFs Critical success factors
MES Manufacturing Execution Systems
ERM Enterprise risk management
ERP Enterprise resource planning
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1. Introduction
Rolls-Royce Limited owned a British luxury-car and aero engine manufacturing business founded
in 1904 by Charles Stewart Rolls and Sir Frederick Henry Royce. Rolls-Royce Limited was
incorporated on 15 March 1906 as a vehicle for their ownership of their Rolls-Royce business.
Their business quickly developed a reputation for superior engineering quality, "best car in the
world", and building on F H Royce's existing standing. Rolls-Royce became a leading
manufacturer of piston aero-engines after it was brought into building them by the First World
War
Implementing an IOT system brings in changes to the way people work within the organization.
Most organizations implement IOT systems that have been purchased from software vendors.
These kind of IOT systems require customization during adoption. Processes will change and there
may be job cuts and rationalization of responsibilities within departments due to the customization.
All these will definitely evoke resistance from the employees and this has to be managed
effectively before, during and after the implementation of the IOT package.
IOT systems differ from in-house or custom development systems in a number of ways. One of
the ways stems from the fact that IOT systems are considered to be built on best business practices
and thus the user may be required to make changes to business processes and procedures in order
to fully utilize the system. The IOT system may need to be customized to match the business
process that the user is familiar with. After the successful implementation the user usually becomes
dependent on the IOT vendor for assistance and updates (Somers and Nelson; Wu and Wang).
The successful implementation or adoption of technology by an organization must take into
account the human and management issues. Users of these technologies, such as information
systems/technology, are at the central of these implementations and adoption. It is therefore
important to allow these users to participate in the implementation process. User participation has
traditionally been recognized as a critical component in Information System.
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Compliance with the IT Strategy implementation
Long-term on-going project aimed at studying the state-of-the-art of Internet of thing’s
implementations. The aviation industry is capital intensive and also has high operating and
maintenance costs. A single jet engine can cost $16 million, and on a Transatlantic flight will
consume 36,000 gallons of fuel, which at today’s airline fuel prices comes to around $54,000 per
trip, or more than $5,000 an hour.
Maintaining the aircraft on the ground can add hundreds of dollars per hour. Although fuel costs
have been falling, airlines are still pursuing ways to reduce running expenses. Some areas being
pursued include increasing fuel efficiency of jet engines, optimizing flight paths, and improving
maintenance.
KEY TECHNOLOGY ISSUES, SUCH AS DATA INTEGRITY AND TECHNOLOGY INFRASTRUCTURE,
WERE ADDRESSED EARLY.
“Aircraft and engines have gotten more talkative and the scope of our services has increased,” said
Nick Farrant, senior vice president of Rolls-Royce, in a recently published case study. “There are
terabytes of data coming from large aircraft fleets, with gigabytes per hour—rather than
kilobytes—to process and analyse.” He added that “we and our customers are drowning in data,
and many existing systems struggle to filter the signal from the noise and offer the means to analyse
things in a consistent way. “The implementation plan and subsequent progress was communicated
regularly to employees, suppliers and customers.
Lead the security input during design workshops, articulating risk mitigation requirements to the
business. Helping Rolls-Royce’s customers understand the value of the data analytics initiative is
vital to the success of the project, and Microsoft Power BI has played a critical role in those efforts.
“In the past, building our own chart and dashboard tools was laborious, and it really slowed down
some of our product development,” Beesley says. “With Power BI, we can very quickly and easily
create reports and dashboards that tell quite a compelling story.”
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Rolls Royce information security (policy)
Rolls-Royce foresees that by gaining access to wider sets of operational data, it will be able to
offer more valuable services to customers. Another important benefit is that the company will gain
a better understanding of how it should structure its support contracts, how it can better manage
risk, and what its product development needs are. Assist with research, review and selection of
security technologies to ensure alignment with security roadmaps. Support large programs of work
led by IT and the business by consulting on matters related to security and creation of security
requirements. Influence internal stakeholders across the business on all aspects of cyber security.
Apply and maintain specific security controls as required by policy and local risk assessments to
maintain confidentiality, integrity and availability of business information systems. (Brainy
Quotes, (2001). Richard Branson Quotes)
With IOT technology allowing Rolls-Royce engineers to track and analyse engine performance
mid-flight, the company is better placed to identify underperforming components. This allows the
team to implement proactive maintenance strategies (replacing underperforming components), not
only reducing the frequency of unexpected / severe faults but also improving engine efficienc y
and lowering fuel consumption. It is estimated a 1% reduction in fuel usage translates to
US$250,000/plane/year. Applying this to Delta’s current fleet of 830 planes sees a potential saving
of ~US$210M per year. Predicative maintenance also has the added benefit of allowing Rolls-
Royce to carry lower inventory.
Data analytics of engine performance could also be shared with plane body manufacturers (e.g.
Boeing, Airbus) to improve plane design / aerodynamics. Develop best in-class IOT capabilities –
IOT capability is still new, partnerships with leading tech-companies need to be collaborative and
progressive. Investigate the potential of mid-air feedback to pilots who are aren’t optimizing
engine performance. Not only has Rolls Royce been an early adopter of IOT technology but
strategic partnerships with tech-firms such as Microsoft have placed the company in a good
position to stay on the forefront of IOT advancement and continue to deliver real value for its
customers. (Robinson, D -2016)
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IN ADDITION TO THE REQUIREMENTS OF ISO9001, AS9100:
Requires Greater Emphasis on Risk Management
Introduces “Special Requirements”
Introduces “Critical Items”
Requires Measured: Requirements conformance
Requires Measured: Delivery performance
Adopts Proven Product Development Processes
Eliminates “recurring corrective actions”
Project definition
The focus of this paper is on user participation in the context of IOT systems implementation. Past
research on IOT implementation has focused on IOT adoption, success measurement,
implementation methodologies and success factors. There is a dearth of research as far as user
participation in IOT system implementation is concerned.
The closest attempt in recognizing the role of users in the successful implementation of IOT
systems is in the identification of critical success factors (CSFs) where user participation and
involvement is mentioned as one of the CSFs. Review of literature conducted by Moon and Addo-
Tenkorang and Helo mention that one of the most cited critical success factors in the
implementation of IOT systems is user participation and involvement. However, this is only
presented in form of user education and training in order to fully use the implemented system.
These studies do not argue for or against the contributions that user participation makes towards a
successful implementation of an IOT system.
Most studies have focused on participation of users in traditional data processing environments
such as participation in the development of transaction processing systems and management
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information systems. These studies, however, have identified the need for research into user
participation in other types of systems and in a variety of environments.
IOT systems cut across the entire enterprise in terms of functionality and usage. They are highly
complex and require a different implementation approach. Most studies on IOT implementation
have analysed the implementation from the organizational or industry perspective. There has been
little research focus in IOT system adoption at the individual or user level.
The scope of the Project
Rolls-Royce and Microsoft collaborate to create new digital capabilities. The Internet of Things is
an emerging topic of technical, social, and economic significance. Consumer products, durable
goods, cars and trucks, industrial and utility components, sensors, and other everyday objects are
being combined with Internet connectivity and powerful data analytic capabilities that promise to
transform the way we work, live, and play. Projections for the impact of IOT on the Internet and
economy are impressive, with some anticipating as many as 100 billion connected IOT devices
and a global economic impact of more than $11 trillion by 2025. And Rolls Royce is one of them
who is implementing IOT at the earlier stage.
At the same time, however, the Internet of Things raises significant challenges that could stand in
the way of realizing its potential benefits. Attention-grabbing headlines about the hacking of
Internet-connected devices, surveillance concerns, and privacy fears already have captured public
attention. Technical challenges remain and new policy, legal and development challenges are
emerging.
Sub Projects
VIRTUALIZATION
Implementing virtualization in manufacturing environments moves the technology into the
business-critical realm. Manufacturing Execution Systems (MES) and related automation
applications can gain advantages from virtualization that go beyond even those seen in typical
enterprise software applications — although special concerns apply as well.
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DIGITAL SALES
Rolls-Royce Motor Cars sold a record number of cars last year, breaking through the 4,000 mark
for the first time in its 111-year history. The luxury car maker sold 4,063 cars, up 12% on last year,
and marking the fifth consecutive year of record sales. Sales in the US increased by almost a third,
by 40% in Europe and in the Middle East by 20%, the firm said. And in the world there are more
than 13,000 jet engines manufactured and getting service by Rolls Royce. (www.rollsroyce.com )
SYSTEM INTEGRATION
Integrating IOT with other enterprise applications is the more problematic area of IOT system
integration. In addition to the IOT business information backbone, many companies have other
systems for Manufacturing Execution (MES) and data collection, Quality management and process
control (may be a part of MES), Warehouse Management , Transportation Management , and other
“outside” systems that could benefit from integration with the IOT backbone.
Characteristics of the project
Roadmap of the origin to totalcare
The IT implementation in the ROLLS ROYCE begin much more earlier, as all the industries are
now implementing IT system to replace all the human workforce with this system. This IT
implementation began with firstly SAP, for maintaining the Enterprise Resource Planning which
reduced the cost of human workers, which monitors the financial matters of the company by taking
into account the cash flow in the company, Supply Chain Management which is very helpful in
controlling the inventory, manage the customers’ orders etc., Customer Requirement Management
which helps to build a strong relations with customers and resolve all their product on time, Human
resources, manufacturing and data warehouse. This IT implementation will reduce the expenditure
with just one time investment.
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Figure 1: Road Map at Rolls Royce,
Source: own illustration
Further they also used BIG Data is used to better understand customers and their behaviours and
preferences. Companies are keen to expand their traditional data sets with social media data,
browser logs as well as text analytics and sensor data to get a more complete picture of their
customers.
As Roll Royce were just making the advancement in new product which is not sufficient to for
further profit to the company so the era begins. Total care with IOT in which they first sell the
product then, they charge for the maintenance of this product which increases the revenue of the
company.
THE ROADMAP SHOWS THE STEPS INVOLVED IN FINAL RUNNING OF THE PROJECT.
PROJECT PREPARATION: -
Initial project planning: - As in any project initial planning is required to make it successful. So
we have the plan when to implement the new product in the market, where will be our potential
customers, does this will increase the revenue for the company etc.
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Technical requirement: - After the initial project planning. We also look after the technical
requirement.
Quality check: - This is one of the major important step in every step as we need high quality as it
is cost of human life’s for total care.
BUSINESS REALISATION
Project management: - For completing the project we have to design complete project so that it
can be completed in the desired time and place. So that all the investment calculations are
accurately achieved.
Organisational change management: - Whenever we are progressing in our project there will be
many modification in the structure of the project as this is a huge project of the Rolls Royce the
change in the organisational managements are reduced.
Training: - As we are proceeding further in the project we need to train accordingly as this
implementation is new to the current market.
Develop system environment: - We must also develop a system environment which is workers
friendly which enhance their skills and talents for the progress of project.
Quality check: - This is one of the major important step in every step as we need high quality as it
is cost of human life’s for total care.
REALISATION
Baseline configuration and confirmation: - A configuration management database (CMDB) is
a data that contains all relevant information about the components of the information system used
in an organization's IT services and the relationships between those components.
Develop programs, interface: - All the programs required for the developing of the programs and
interface employees from Rolls Royce will just give the working of the hardware remaining
software are taken care by Microsoft.
Final integration: - After all the completion of the project we are going to integrate all software
and hardware engines from Rolls Royce to check the compatibility between them.
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Quality check: - This is one of the major important step in every step as we need high quality as it
is cost of human life’s for total care.
FINAL PREPARATION
Detailed project planning: - At the last the final preparation of the project is checked properly as
per the schedule plan of the project.
Cutover:- It specially refers to switching from an old (hardware/software) system to a replacement
system, covering the overlap system to a replacement system covering the overlap from when the
new system is live until the old system has been outdated.
Training: - Even from the start till end training is required even for the cutover estimation and
evaluation of the IT systems are of importance.
Quality check: - This is one of the major important step in every step as we need high quality as it
is cost of human life’s for total care.
GO LIVE AND SUPPORT
Production support: - After all the test and analysis the actual production begins with all the
support to go live and support the production.
Project end: - Finally the project is completed after fulfilling all the support and delivered to
customers.
Here comes the next step the roadmap of our project. Implementation of Internet of things.
Real time support with Microsoft monitors every moment and reduce the downtime of any
aeroplanes total care services.
Project links
Order Management, Manufacturing, Human Resource, Financial system, and distribution with
external suppliers and Customers.
The Europe 2020 strategy should enable the European Union to achieve growth that is:
Smart, through the development of knowledge and innovation;
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Sustainable, based on a greener, more resource efficient and more competitive economy;
Inclusive, aimed at strengthening employment and social and territorial cohesion.
Figure 2 Source: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:em0028
Social and economic environment
SOCIAL VIEW
Increased number of employees during the construction of this project will require huge number
of workforce will create more job opportunities.
As we know that together we grow to solve the global problems. So as the new project
implementation involve globalised opportunities of engineers to solve problems instantly.
Development and maintenance service using high tech production base requires social interaction
with all the people in the globe.
ECONOMICAL VIEW
As we are the major gas turbine manufacturers for aeroplanes, for large ships, military equipment’s
in the world have become a major player in that and occupied almost all part of the engine
requirement. Due to which our revenue is being constant there was no room for the increasing
33.40%, 34%
8.30%, 8%
24.20%, 24%
30.00%, 30%
0.70%, 1%
3.30%, 3%
National strategy Refrance framework
Improving access to employment and
sustainability
Improving human capital
Improving the social inclusion of less-
favoured persons
Increasing the adaptability of workers
and fi rms, enterprises and
entrepreneurs
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revenue. So we started this new venture of business like Total care in which we first sell the engine
and then we charge for the maintenance and monitoring the engine on a real-time scenario, which
added one of the additional major income for our company. For accomplishment of this project we
require an advanced infrastructure with fully IT support system. This also requires a huge
investment by considering future demand.
Due advent of this IOT the Rolls Royce discovered this technology for revenue making and see
themselves how the products are being used in today and the upcoming generation.
Identified problem
CULTURAL PROBLEMS:
• The improvements made to the company as a whole, the implementation project team
expected a high acceptance of the system in areas that provide just as good or better
functionality than the old system.
• Thus, breaking the traditional segregation of OBUs and departments.
BUSINESS PROBLEMS:
• Business structure, to identify potential problem within new system
• over 1000 additional PCs will be required, over 6000 SAP licenses
TECHNICAL PROBLEMS
• accuracy of data, systems that has to be normalized, screened and stored in a sensible data
format within the new systems data repository
General objective of the project
A single jet engine can cost $16 million, and on a Transatlantic flight will consume 36,000 gallons
of fuel, which at today’s airline fuel prices comes to around $54,000 per trip, or more than $5,000
an hour. Maintaining the aircraft on the ground can add hundreds of dollars per hour. Some areas
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being pursued include increasing fuel efficiency of jet engines, optimizing flight paths, and
improving maintenance. Rolls-Royce addressed these growing data analysis challenges by
building a monitoring solution into its Total Care Services, which oversee responsibility for engine
reliability and maintenance. The company assumes all responsibilities for analysing engine data in
real time to manage customers’ engine maintenance and maximize aircraft availability.
Outcome Indicator
An indicator is an objective way of measuring that progress is being achieved, through collecting
factual information. Data collected about the indicator tells us if the expected change is happening
i.e. it indicates or shows if change has happened.
Indicators are selected at the initial planning stage of a project or programme so that change can
be measured from when implementation starts. The first set of data collected for each indicator at
the start of a programme is called the baseline.
Outcome indicators – measure the intermediate changes as a result of the project or programme
activities. Monitoring outcomes tells us if activities are bringing about the intended intermediate
changes. In all programmes, there is likely to be a wide variety of outcomes that are expected, for
example changes in community knowledge and attitudes, increased access to and utilisation of
Protection, Education, Health, and Emergency services, increased quality of services, and changes
in financing, policy or practice. These outcomes are expected to lead, in combination, to the final
impact that is planned.
The table below shows the Progress of engines delivered from base year to 2021
Table 1 Product Outcome
Indicators Source ofinformation Unit 2017 2021
number of Engine delivered in
civil aerospace (Trent100 , Trent
900 ,AE V2500 ,BR725)
www.rollsroyce.com no unit 830 850
number of Engines delivered in
defence aerospace (F35 ,F136 ,
AE2100)
www.rollsroyce.com no unit 555 580
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Underlying services revenues
from implementing in engines
Marine
www.rollsroyce.com % 43 51
number of Engines delivered in
civil nuclear energy
www.rollsroyce.com no unit 47 55
Sales per employee www.rollsroyce.com no unit 174 191
Product Indicator
The table below shows the progress in Number of departments that have been benefited, Number
of data bases available and Number of customer registers available online.
There is no strict rule about how many indicators should be used but there are a few issues to
consider. We need to collect information for each indicator at least at the beginning and end of the
programme, and probably more frequently (for education programmes most indicators need to be
tracked at the beginning and end of each school year). So, it is advisable not to choose too many
indicators that might require excessive work to collect. However, it is often the case that no single
indicator can give a full picture of the change that is occurring, particularly where information is
sensitive and difficult to collect reliably. Instead we often need to use more than one indicator, and
a combination of quantitative and qualitative indicators, to provide an overall assessment.
Indicators Source of
information
Unit 2017 2021
Number of departments
that have been benefited
Survey no unit 2 7
Number of data bases
available
Survey no unit 0 1
Number of customer
registers available online
Survey no unit 0 1
Table 2 product Indicator
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The strategy for selecting indicators should be based on what we are trying to measure i.e. the
project or programme rationale and logic, activities and objectives. It is therefore very important
for monitoring and evaluation that each programme has a clear proposal for how inputs and
activities will lead to expected outputs, outcomes and final impacts, before developing indicators.
2. Technical analysis
Technical capabilities
Most large enterprises run remarkably secure WLANs. They minimize open-authentication access
points – and those use captive portals – and implement WPA2-enterprise authentication and
encryption protocols, which are very difficult to crack.
However, well-configured access points inhibit the growth of the Internet of Things over Wi-Fi.
The emerging IOT model connects headless sensors over wireless connections to a cloud service
that manages them and collects traffic. This service then offers a portal for analytics and smart
phone based user control.
Enterprise lighting, energy management and other sensors are moving to this architecture where
the device hitches a ride on the Wi-Fi network, but only to connect to its service in the cloud: the
WLAN is essentially transparent in the architecture. The sensor later needs to authenticate to its
cloud service, but only after it have a path through the WLAN.
In general to implement and to run IOT Recommended connection speed 500-800 kb/s or
faster.TOI Business Objects Cloud requires no more bandwidth than is required to browse the
internet. All application modules are designed for speed and responsiveness with minimal use of
large graphic files.
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Improving the possibilities:
REMOTE OFFICES
A remote office is an office that is located in a different or remote geographical area. An
organization may have a main office, as well as remote offices in another city, country or continent.
Remote office data system storage and recovery is a common and useful organizational system.
REMOTE CONNECTIVITY
Remote access refers to the ability to access a computer, such as a home computer or an office
network computer, from a remote location. This allows employees to work offsite, such as at home
or in another location, while still having access to a distant computer or network, such as the office
network
BACKUP SYSTEM
Cloud backup, also known as online backup, is a strategy for backing up data that involves sending
a copy of the data over a proprietary or public network to an off-site server. The server is usually
hosted by a third-party service provider, who charges the backup customer a fee based on
capacity, bandwidth or number of users. In the enterprise, the off-site server might be owned by
the company, but the chargeback method would be similar.
Figure 3 Cloud backup system
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Online backup systems are typically built around a client software application that runs on a
schedule determined by the purchased level of service. If the customer has contracted for daily
backups, for instance, the application collects, compresses, encrypts and transfers data to the
service provider's servers every 24 hours. To reduce the amount of bandwidth consumed and the
time it takes to transfer files, the service provider might only provide incremental backups after
the initial full backup.
Cloud backups often include the software and hardware necessary to protect an organization's data,
including applications for Exchange and SQL Server. Most subscriptions run on a monthly or
yearly basis. While initially used mainly by consumers and home offices, online backup is now
used by small and medium-sized businesses (SMBs) and larger enterprises to back up some forms
of data. For larger companies, cloud data backup may serve as a supplementary form of backup.
FEATURES OF CLOUD BACKUP SYSTEM
In the enterprise, cloud data backup services are primarily used for non-critical data. Traditional
backup is a better offering for critical data that requires a short recovery time objective because
there are physical limits as to how much data can be moved in a given amount of time over a
network. When a large amount of data needs to be recovered, it may need to be shipped on tape or
some other portable storage media.
COST OF CLOUD DATA BACKUP
Third-party cloud backup has gained popularity with SMBs and home users because of its
convenience. The technology has an initial upfront cost and then lowers monthly or yearly payment
plans that appeal to many smaller operations. Capital expenditures for additional hardware are not
required and backups can be run dark. However, the cost of keeping data in the cloud for years
adds up. In addition, costs rise as the amount of data to be backed up to the cloud increases.
In terms of return on investment (ROI), it is important for an organization to consider the long-
term costs of backing up to the cloud. A five-year projection is recommended to properly estimate
future expenses and decide whether using the cloud will help the organization break even after
initial costs. After these costs are offset, ROI on cloud-based backups can be determined.
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INTEGRATION
 Systems that could benefit from integration with the TOI:
 Manufacturing Execution (MES)
 Quality management and process control (may be a part of MES)
 Warehouse Management (WMS)
 Transportation Management (TMS)
 And/or other “outside” systems
AUTHENTICATION
“RSA® SecurID® authentication has enabled Rolls Royce to use the Internet securely as a cost-
effective and efficient extension to corporate network. Rolls Royce evaluating using RSA SecurID
authentication as a standard security mechanism to enable their own workforce easier remote
access to the company LAN.
KEY REQUIREMENTS:
Strong authentication with one-time password to safeguard sensitive data on the Internet Accurate,
real-time fraud/threat detection with minimal impact to user experience Solution that is
interoperable with third-party applications
HARDWARE PLATFORM
Operating System: Microsoft® Windows Server 2012 64 Bit (x64)
Database: Microsoft® SQL Server 2012 64 Bit (x64)
CPU: 3-20 Users: 1x Intel® Xeon® E321-75 Users: 2x Intel® Xeon® E375+ Users: 4x Intel®
Xeon® E3
RAM Memory: 3-10 Users: 12 GB More than 10 Users: typically 12-32GB dependent on the user
count
HD Space: MS SQL Server – System partition 100GB/Data partition 100GB
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MANAGEMENT SYSTEMS
A quality management system (QMS) is a set of policies, processes and procedures required for
planning and execution (production/development/service) in the core business area of an
organization. (i.e. areas that can impact the organization's ability to meet customer requirements.)
QUALITY MANAGEMENT SYSTEM
Quality
Control
Quality
Assurance
Quality
Management
(Detection) (Prevention) (Direction)
BS 5750
1979-1987
ISO 9001
1987-2000
ISO 9001
2000
SCOPE
This International Standard describes fundamentals of quality management systems, which form
the subject of the ISO 9000 family, and defines related terms. This International Standard is
applicable to the following:
a) Organizations seeking advantage through the implementation of a quality management system;
b) organizations seeking confidence from their suppliers that their product requirements will be
satisfied;
c) Users of the products;
d) Those concerned with a mutual understanding of the terminology used in quality management
e) Those internal or external to the organization who assess the quality management system or
audit it for conformity with the requirements of ISO 9001 (e.g. auditors, regulators,
certification/registration bodies);
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f) Those internal or external to the organization who gives advice or training on the quality
management system appropriate to that organization;
g) Developers of related standards.
THE BENEFITS OF A QMS
The trend of implementing a quality management procedure is gaining popularity in all
organizations, since there are tremendous benefits in using a quality management system. Some
of the benefits are explained below:
Achievement of Project Scope
This system facilitates a business, to attain the objectives that have been defined in the organization
strategy. It ensures the achievement of stability and reliability regarding the techniques, equipment,
and resources being used in a project. All project activities are integrated and aligned towards the
achievement of quality products. These efforts commence by identifying the customer needs and
expectations, and culminate in their contentment.
Increase in Production
Improved production is achieved due to proper evaluation techniques being applied, and better
training of the employees. A strict process control is directed towards performance consistency,
and less scrap. Supervisors experience less late night problematic phone calls, since the employees
are trained on troubleshooting.
Less Rework
Quality is measured continuously due to the appropriate procedures that ensure immediate
corrective actions on occurrence of defects. Since efforts are directed towards quality products,
rework due to warranty claims is minimized. This reduction increases customer confidence, and
increase in business.
Increased Financial Performance
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Investment in quality management systems are rewarded by improved financial performance.
UCLA conducted a research on the companies being traded on the New York Stock Exchange,
and observed that the financial performance of the companies that obtained ISO 9000 Quality
Standard certification was improved significantly, compared to the other companies.
Increase in Market Share
Other quality management system benefits include proper management of project risks and costs,
and identification of development prospects. This results in an increase in market share and
reputation, and capability to react to industry opportunities.
Improvement in Internal Communications
The quality management system emphasizes the issues related to operations management. This
encourages frequent interaction between project departments or groups, and promotes harmony.
All these factors contribute to improved quality, and customer satisfaction.
Do What the
Customer Wants
Managed
Measure
Analyse
Improve
COMPANY
Policy
Customer Focus
Committed
Objectives
Determine & Communicate
Authority & Responsibilities
Review
People
Buildings, Equipment,
Machinery, etc
Environment
Planning
Provide Resources
Customer
Satisfaction
System
Processes
Product
Non-conforming
Product
Data & Info
Corrective
Action
Preventive
Action
Control Our Processes
Control Our Documentation
ISO
1.1
1.2
2.1
2.2
2.3 2.4
2.5
2.6
2
3.1
3.2
3.3
3.
4.2
4.3
4.4
4.
4.1
4.5
4.6
5.1.1
5.1.2
5.
5.2
5.1.3
5.1.4
5.3
5.4
5.5
Selling
Purchasing
Designing
Calibrating
Production
Figure 4 Company ISO system
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ISO 9001: 2000
ISO 9001:2000 specifies the requirements for a QMS that may be used by organizations for
internal application, certification or contractual purposes. The process approach is shown in the
conceptual model from the ISO 9001:2000 Standard, recognizing that customers play a significant
role in defining requirements as inputs, and monitoring of customer satisfaction is necessary to
evaluate and validate whether customer requirements have been met.
The functionality
Analysis of existing IT resources
The Existing IT system in Rolls Royce is ERP. The business environment is dramatically
changing. Companies today face the challenge of increasing competition, expanding markets, and
rising customer expectations. This increases the pressure on the company to lower total costs in
the entire supply chain, shorten throughput times, drastically reduce inventories, expand product
choice, provide more reliable delivery dates and better customer service, improve quality, and
efficiently coordinate global demand, supply, and production.
Figure 5 Roles of existing IT System
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EXCELLENT PROJECT MANAGEMENT
Successful ERP implementation requires that the organization engage in excellent project
management. This includes a clear definition of objectives, development of both a work plan and
are source plan, and careful tracking of project progress. And the project plan should establish
aggressive, but achievable, schedules that in still and maintain a sense of urgency.
DATA ACCURACY
Data accuracy is absolutely required for an ERP system to function properly. Because of the
integrated nature of ERP, if someone enters the wrong data, the mistake can have a negative
domino effect throughout the entire enterprise. Therefore, educating users on the importance of
data accuracy and correct data entry procedures should be a top priority in an ERP implementation.
ERP systems also require that everyone in the organization must work within the system, not
around it. Employees must be convinced that the company is committed to using the new system,
will totally changeover to the new system, and will not allow continued use of the old system. To
reinforce this commitment, all old and informal systems must be eliminated. If the organization
continues to run parallel systems, some employees will continue using the old systems
Development of target structure of IT systems
This figure shows the how the target structure of IT systems is developed in Rolls Royce. It
department is divided in Hardware Infrastructure, Software support, Network support and
Application support. Further Project management, User Support, System Support, Quality
Management. Finally, security support, Management Support, Database support,
Telecommunication
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Figure 6 Development of target structure in IT system
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Server room adaptation
Server room location is the first consideration, even before considering the layout of the room’s
contents. Most designers agree that, where possible, the computer room should not be built where
one of its walls is an exterior wall of the building. Exterior walls can often be quite damp and can
contain water pipes that could burst and drench the equipment. Avoiding exterior windows means
avoiding a security risk, and breakages. Avoiding both the top floors and basements means
avoiding flooding, and leaks in the case of roofs. If a centralized computer room is not feasible,
server closets on each floor may be an option. This is where computer, network and phone
equipment are housed in closets and each closet is stacked above each other on the floor that they
service.
The picture shows the connection of client and server. Maintenance / Administration UI and GUI
(web browser) are related to from server and client are related by means of RESTTUL API and
map server
Figure 7 Server Room
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Preparation and implementation of new systems.
THE IMPLEMENTATION IS DONE IN THE FOLLOWING STEPS
Exploration: Asses needs are examined and implementation is considered
Installation: Resources are acquired, and organisation prepares for the implementation of new
systems and prepares the staff
Initial Implementation: Implementation adjusts, manage the changes, and Initiate improvement
cycle
Full implementation: The software is monitored and manages, Achieves fidelity and outcome and
further improves fidelity and outcomes.
Figure 8 Implementation stage
COMPATIBILITY
 More Flexible but Harder to implement
 Under name type compatibility, only two type names must
 Be compared to determine compatibility
 Under structure type compatibility , the entire structure
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 Of the two types must be compared.
Technical assumption
"Companies that successfully alter their business around IT can achieve a significant window of
competitive advantage" [Tapscott D (2004)]. This doesn't 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 costs 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 down 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 works 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 processed information provided to them it won't be possible for them to carry out these tasks.
Compliance with rules in the field of IT project
TECHNOLOGICAL NEUTRALITY
Technology neutrality is one of the key principles of the European regulatory framework for
electronic communications. Since 2011, technology neutrality has also been recognized as a key
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principle for Internet policy IOTCD, 2011.Technology neutrality means that technical standards
designed to limit negative externalities (e.g. radio interference, pollution, safety) should describe
the result to be achieved, but should leave companies free to adopt whatever technology is most
appropriate to achieve the result. Microsoft has signed a deal with aeroplane engine maker Rolls-
Royce that looks like a textbook demonstration project for the Internet of
Things (IOT). Microsoft's cloud-based IOT and analytics platforms will be used to improve
efficiency for airlines by diagnosing problems with jet engines.
Rolls-Royce will adopt Microsoft's Azure IOT Suite and Cortana Intelligence Suite to quickly
diagnose potential faults in engines fitted to aircraft in service around the globe. Information
on engine health, air traffic control, route restrictions and fuel use will be collected from
hundreds of sensors inside the engines, and analysed to detect any operational anomalies or
signs of developing faults. Airlines will be able to use the data to cut fuel use, fly on more
efficient routes and ensure they have the right replacement parts in the places they are needed
most.
One of the promises of the IOT is that it will enable new business models, and the new
capabilities will become an important part of the Rolls-Royce Total-Care programme, which is
based on earning revenue when aircraft fly, rather than when engines are serviced. Azure IOT
Suite has been generally available since September as a collection of services running on
Microsoft's Azure platform. It includes the Azure IOT Hub service to connect to devices in the
real world and gather data, along with storage and analytics services.
Cortana Intelligence Suite, previously Cortana Analytics, was announced earlier this year as a
platform that combines machine learning and analytics with what Microsoft.
METHODOLOGY FOR RESEARCH FOR INFORMATION
Rolls Royce used data analytics for the research for information after big data. But the analytics
changed the structure and lead to the new business venture, which is known as Total care product.
Rolls Royce since 1971, is one of the leaders in big data. Investing in analytics was
transformational for Rolls Royce and made a loss-making aircraft manufacturer become number
two player in the aircraft engine industry.
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To bring its vision of a powerful and scalable data analytics system to life, Rolls-Royce chose to
build it on the Microsoft Azure platform. “We realized early on, as customer and engine data
volumes increased, that we were looking at a big-data problem,” so “Microsoft quickly concluded
that a cloud platform like Azure was a ready-made solution for us.”
“With Microsoft, it isn’t just about the infrastructure, its end-to-end and global. There are the skills,
the capabilities, the service offering, the development environment, the security. It all just fit
together.” Once Rolls-Royce started to collaborate with Microsoft, it began to develop a number
of new capabilities using an expansive set of Azure platform services.
Starting with Azure IOT Suite, Rolls-Royce will be able to collect and aggregate data from
disparate and geographically distributed sources at an unprecedented scale. “With the increase in
the volume and velocity of data that we’re looking at, Microsoft Azure IOT Suite will have a key
part to play in our ability to reliably aggregate data across our customers’ fleets. Initially, the types
of data being processed include snapshots of engine performance that the planes send wirelessly
during a flight, massive downloads of comprehensive “black box”–type data, technical logs, and
flight plans as well as forecast and actual weather data provided by third parties.
Using Microsoft Cortana Intelligence Suite, Rolls-Royce will be able to analyse a rich set of data
and perform data modelling at scale to accurately detect operational anomalies and help customers
plan relevant actions. “Microsoft Cortana Intelligence capabilities are helping us filter the signal
from the noise across large data sets so we can focus on finding the real value in the data. Our
vision of future digital capability will need to aggregate many sources of data and provide a
platform for collaboration with customers.”
UNIFIED ARCHITECTURE
The OPC Unified Architecture (UA), released in 2008, is a platform independent service-oriented
architecture that integrates all the functionality of the individual OPC Classic specifications into
one extensible framework.
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THIS MULTI-LAYERED APPROACHACCOMPLISHES THE ORIGINAL DESIGN SPECIFICATION GOALS
OF:
Functional equivalence: all
COM OPC Classic
specifications are mapped to
UA
Platform
independence: from an
embedded micro-controller
to cloud-based infrastructure
Secure: encryption,
authentication, and auditing
Extensible: ability to add new features without affecting existing applications
Comprehensive information modelling: for defining complex information
FUNCTIONAL EQUIVALENCE
Building on the success of OPC Classic, OPC UA was designed to enhance and surpass the
capabilities of the OPC Classic specifications. OPC UA is functionally equivalent to OPC Classic,
yet capable of much more:
Discovery: find the availability of OPC Servers on local PCs and/or networks
Address space: all data is represented hierarchically (e.g. files and folders) allowing for simple
and complex structures to be discovered and utilized by OPC Clients
On-demand: read and write data/information based on access-permissions
Subscriptions: monitor data/information and report-by-exception when values change based on a
client’s criteria
Events: notify important information based on client’s criteria
Methods: clients can execute programs, etc. based on methods defined on the server
Figure 9 OPC UNIFIED
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Integration between OPC UA products and OPC Classic products is easily accomplished with
COM/Proxy wrappers that are available in the download section.
Function of internet of things totalcare
Basic parameter sensing: - Whenever the aeroplane is in flight the engine is connected to many
varieties of sensors which will continuously sensing all the changes inside the engine.
Local monitoring and prognostics: - All the sensors connected to the engines are monitored in a
real time basis in the local area of the station.
Figure 10 Function of IOT
Low bandwidth real-time streaming:-Low bandwidth is used to transfer the data as it can travel
at a faster rate of data along with highly accurate data with minimum errors in it. We can
process real-time streaming data as fast as you collect it, you can respond to changing conditions
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like never before. With Tale-end, you can capture and aggregate millions of events per second then
instantly.
Operation centres: - At each and every few airport we have set a service station to prevent a long
downtime of the flights for maintenance purposes. To prevent in the differences between live
streaming and the downtime due to huge failure, we have come up with this new business called
the total care.
Advanced sensors, high bandwidth communication and big data: - After complete setting of
the part we use some advanced sensors which can monitor some of the advanced features like
future prediction. We also use BIG data in monitoring and knowing the future requirement by
collecting information as we run the further fleets at higher distances.
After this implementation of the project 52% of the revenue comes from this new business ventures
of the Rolls Royce. The above graph shows how the implementation of this project resulted in
various increase in the cash-flow values of the company. We can also see that 92% of the fleets
improved the business by 92% and also 87% of the existing fleets have signed for this total-care
services.
Project management methodology
PRINCE2 (an acronym for Projects IN Controlled Environments) is a de facto process-based
method for effective project management. Used extensively by the UK Government, PRINCE2 is
also widely recognised and used in the private sector, both in the UK and internationally
Application of Prince-2 in Rolls-Royce
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Figure 11 Prince2 methodology
As Prince-2 is of most important in project management Rolls Royce is also of implementing this.
Rolls Royce is selling their engines in different varieties. Firstly only the engine and other one is
making the Rolls Royce engine and then service of maintaining with total-care.
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From the above figure we can see that how the business works.
Is there a total-care agreement?? If no then it will have lessor airline airframe then time and flow
of the parts in the total engine motion and time flow line in the manufacturing changes. And also
the contractual after-market deal depends with the customers. If yes Then the flow begins like was
the Total care agreement negotiated with the same counter-part as IOT??
If no then lessor airframe and they will sell only the engine and regarded as unlinked total care
contract and contractual aftermarket rights depends. If yes then Total care and IOT linked contract
accounting with the Airline
Innovative Business model
Invest in R&D and Skilled people
The strength of our current product portfolio results from consistent and long-term investment in
R&D and our ability to bring technology to industrial applications. In addition to our extensive in-
house technology capability, we have partnerships with world-leading universities in order to
create new technology. We continuously invest in our global network of 31 world-class University
Technology Centres (UTCs) where we build the foundation for the next generation of products.
These technologies feed into our demonstration programmes, where robust validation takes place
before proceeding in a structured and controlled way into new production
Developed Technology that anticipates customers need
Hold a two-way conversation in multiple places and engage the customer in ways you can further
alleviate their pain points or solve problems. You must create open, inviting channels for them to
use and effective ways to capture what they say and do. This can take the form of direct customer
feedback via online forums or phone conversations. Identifying additional potential problems or
areas where customers are not fully satisfied can drive innovation. Finding the right projects you
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can execute precisely and quickly will allow you to sink your teeth into the bigger, more time-Figure 12 Own Illustration
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consuming
Engineering Excellence
Innovation is our lifeblood. Our capacity to innovate, year on year, is key to our competitive edge.
It is our strong tradition of innovation that helps us to continually deliver value to our customers.
We are embedding a culture of innovation across the business. We are looking to all our people
for ideas that improve how we work and how we are organised, as well as the technology we
develop and the products and services we provide. We know that to drive innovation we must
create the right environment; curious, challenging, unafraid of failure, open-minded and able to
change with pace. We have over 15,690 professional engineers worldwide who can apply their
intellect and experience to improving the performance of our products. In 2015 we recruited 160
graduates into Engineering and Manufacturing Engineering Early Career Development
Programmes. Our 150 strong Rolls-Royce Engineering Fellowship applies world-class leadership
of technical expertise to our most complex challenges. The annual Sir Henry Royce Awards
celebrate excellence in innovation, along with other innovation awards across the Group. We also
have a global network of 31 University Technology Centres, engaging over 700 academics in
fundamental research into cutting edge technologies.
Operational Excellence
Rolls-Royce has shaken up its senior management team and scrapped two divisions as part of his
attempt to turnaround the struggling engineer. Warren East, who took charge of the company in
July, will scrap the aerospace and land & sea divisions that split Rolls into two parts, leading to
the departure of two senior executives. The move means that Rolls will operate with five smaller
businesses all reporting directly to East. The Rolls chief executive plans to bring in a chief
operating officer to assist him in running the company. In total, roughly a dozen senior jobs will
be affected by East’s change Rolls said the revamp will “simplify the organization, drive
operational excellence and reduce cost”.
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Capturing aftermarket value
The acquisition of ITP strengthens Rolls-Royce’s position on its Civil Aerospace large engine
growth programmes by capturing significant additional value from long-term aftermarket
revenues, including on the high volume Trent 1000 and Trent XWB engine programmes where
ITP has played a key role as a risk and revenue sharing partner. It also enhances the group’s
manufacturing and services capabilities and adds value to the Defence Aerospace business,
particularly on the TP400 and EJ200 programmes. With their excellent facilities, services and
products, ITP has been a trusted partner for Rolls-Royce and other engine manufacturers.
Investment in future program development
While advances in aircraft and engine technology have delivered significant progress in reducing
the environmental impact of civil aircraft, there are still more challenging improvement targets
being set. The newly established Flightpath 2050 environmental goals (which are all relative to
the capabilities of typical new aircraft in 2000) include a 75 per cent reduction in CO2 emissions
per passenger kilometre and 90 per cent reduction in NOx emissions. The perceived noise emission
of flying aircraft is reduced by 65 per cent. Although our engines are hugely competitive in today’s
market, looking forward, we anticipate that a new generation of engines will be required to keep
pace with these changing demands.
In 2014.
Grow market share and installed base
Rolls is structured into four divisions: Aerospace, Defence Aerospace, Marine and Energy. The
company experienced some rare negative headlines after a fleet of new Qantas A380s was
grounded after an explosion in a Rolls engine. These issues have now been rectified. Earlier this
year the latest Trent XWB engine took to the skies for the first time and Rolls opened a new
manufacturing and training facility in Singapore, close to growth markets. The secret to Rolls’
business model is in the aftercare market. As the company’s installed base of equipment grows,
the market for parts and maintenance also grows. The Company makes precision equipment and
appropriate care of turbines is essential. This means each new piece of equipment delivered should
boost future profitability.
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Secure and maximize service opportunity
Rolls-Royce has more than 13,000 engines for commercial aircraft in service around the world,
and for the past 20 years, it has offered customer’s comprehensive engine maintenance services
that help keep aircraft available and efficient. As the rapidly increasing volume of data coming
from many different types of aircraft equipment overtakes the airlines’ ability to analyze and gain
insight from it, Rolls-Royce is using the Microsoft Azure platform to fundamentally transform
how it uses data to better serve its customers.
Worldwide, flight delays and disruptions cost the airline industry millions of dollars every year.
Even a small reduction in “aircraft on ground” (AOG) time can translate into significant amount
of money, so airlines are always looking for ways to improve the efficiency of maintenance
activities. The same applies to fuel costs. Fuel generally accounts for a whopping 40 percent of
airlines’ operating expenses. Even a 1 percent optimization of fuel consumption can save an airline
millions of dollars annually. A lot of factors affect how much fuel is consumed on a flight,
including the flight path selected, weather, engine efficiency, and operational choices such as how
much fuel to carry on each flight. The heavier the fuel load, the more fuel the aircraft will burn. A
clean engine burns less fuel, but washing engines is time consuming and expensive. Determining
when the optimum time is for each of the engines in a fleet to get washed requires the analysis of
a lot of data.
Design and make world-class products
A geared design with a variable pitch system, the carbon titanium fan system is further developed
to allow the deletion of the thrust reverser, enabling a truly slim–line nacelle system. In essence,
these designs are an evolution of our three-shaft architecture. Advance evolves the core
architecture for further efficiency benefits and future growth of overall pressure ratio, as well as
applying lightweight LP system technologies.
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3. Financial analysis
Assumption and methodology
VIABILITY OF THE PROJECT
Viability is when the state of development of an ICT project is sufficient to enable it to survive
over time and provide ongoing benefit. Project must show good potential for financial viability,
be capable of evolution and expansion, be financially viable with ongoing benefits.
For our project we propose seven best practices fostering a project’s viability over time
 Drafting a viability plan
 Establishing a profile of our client
 Determining your priority needs
 Establishing a budget
 Planning activities
 Ensuring financial self-sufficiency
 Measuring performance
METHODOLOGY
We are using Web Estimation Methodology WEM includes a parametric model estimation of
effort; the effort is calculated by estimating the amount of man-hours needed to meet with a set of
functional requirements of a system. Definition of time constraints, Budget constraints, expected
returns and effort, Determines whether the project is feasible within the technical and financial
expectations of the company rend Forecasting Method, Extrapolation Method
In the percent of sales method, we assumed that you are given the sales forecast.
Assume that you are not given the sales forecast but you have to do it yourself
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Expenditures for the project
PROJECT BUDGET
The own contribution for the project is ₤ 58155 which is 15 % of the Project Gross budget .And
the financial aid from the fedral and state gran ts for the project is ₤ 329545 which is 85 % of the
gross project budget .
Categories Amount in Pounds ₤
1.Servieces
Technical Assistance 250000
Monitoring Evaluation and audit 20000
2.Suppliers
Equipment , software 2000
Publications 700
3.Operating Costs
Events ( Training , Mentoring, Co
ordination
50000
Office operating costs ( staff , consumables 20000
4.IEC
Project information and Education 14000
Communication visibility 6000
5.Contegencies
Contingencies 25000
Total (Gross) 387700
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Expenditure for the project in the years
The above table shows the expenditure of the project in the years from 2017 – 2021 with details
of amount of EU funding and own finding with a total expenditure of ₤ 384700.
year EU Funding ₤ Own funding ₤ Total ₤
2017 40000 10000 50000
2018 52000 13000 65000
2019 56000 14000 70000
2020 61000 16000 77000
2021 68000 17000 85000
Total 277000 70000 347000
40000,7%
52000,10%
56000,10%
61000,11%
68000,12%
277000,50%
345000,62%
EU Funding
2017
2018
2019
2020
2021
Total
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Discounted value of Expenditure of the project in the years
The discounted value of expenditure in the years is calculated in table below at a discount rate 6%
The
year
year Total
value
Discounted rate 6 % DCF 6%
2017 0 50000 1 32500
2018 1 65000 0.94 18599.21
2019 2 70000 0.88 3278.698
2020 3 77000 0.82 2338.78
2021 4 85000 0.76 347000
Total 347000 403716.7
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
0 1 2 3 4
2017 2018 2019 2020 2021 Total
Total value Discounted rate 6 % DCF 6%
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Benefit Cost Rate
The benefit and cost ratio are calculated in e above table and a ranking is given depending on the
cost ratio. Project 4 has highest cost ratio of 29.1 standing in the first place.
Projects Costs in
million
₤(C)
Benefits
(B)
B-C Benefit B/C Cost Ratio
B-C/C
Ranking
1 26 30 4 1.153846154 3.466666667 4
2 50 70 20 1.4 14.28571429 2
3 45 30 -15 0.666666667 -22.5 6
4 70 120 50 1.714285714 29.16666667 1
5 30 45 15 1.5 10 3
6 100 99 -1 0.99 -1.01010101 5
The benefit and cost ratio are calculated in e above table and a ranking is given depending on the
cost ratio. Project 4 has highest cost ratio of 29.1 standing in the first place.
The residual income
Warren East, Chief Executive, said: “In the context of challenging trading conditions our overall
performance for the year was in line with the expectations we set out in July 2015. It was a year
of considerable change for Rolls-Royce: in our management, in some market conditions and in our
near-term outlook. At the same time, there were some important constants: the underlying growth
of our long-term markets, the quality of our mission critical technology and services, and strength
of customer demand for these, which are reflected in our growing order book.”
KEY FINANCIALS
Underlying revenue £13.4bn (FY 2014: £13.9bn), down 1% at constant exchange rates Underlying
profit before tax £1,432m (FY 2014: £1,620m), down 12% at constant exchange rates
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£1,355m before one-off items (see page 4) in line with lower half of 2015 guidance range
restructuring programmes started prior to November 2015 continue to make good progress:
£145m of annualised cost savings expected by end 2017Final payment to shareholders reduced by
50% to 7.1 pence per share (2014 final: 14.1 pence)
Trading outlook for 2016 unchanged
4% growth in order book underpins confidence in strong market share growth for Civil Aerospace
(ref http://www.rolls-royce.com/media/press-releases/yr-2016/pr-2016-02-12-rr-holdings-plc-
2015-full-year-results.aspx)
Equity Charge=Equity Capital*Cost of Equity
The amount of the residual value
New transformation programme launch Set up a transformation team to focus activities, add pace
and simplicity to the business and drive cost reductions of between £150m and £200m per
annum:20% reduction in top two layers of senior management; further reductions planned Roughly
Residual
income
Disposable
income
Cost of its
Capital
Opportunity
cost
Bondholders
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50% of targeted cost savings already identified Initial exceptional restructuring charge of £75-
100m in 2016
Further actions underway to generate additional savings in 2017
24/7 - 24 hours a day, 365 days a year. Full transfer of financial risk - resulting in tax benefits
Enhanced aircraft resale value - fully transferable with the aircraft, therefore increasing its residual
value Increased aircraft availability - A lease engine is included in the plan when your engine is in
the shop
The amount of discounted residual value
Corporate Care covers the cost of all Engine parts and labor when the time comes for the engine
to be sent to an authorized Rolls-Royce overhaul facility. The cost of parts and labor for mandatory
and recommended service bulletins, as well as unscheduled shop visit costs for non-FOD events
is also covered. There is also an optional service that covers the replacement of Life Limited Parts.
This comprehensive coverage permits accurate budgeting based on each operator's forecast
utilization. The Rolls-Royce global network of repair and overhaul operations ensures convenient
0
1
2
3
4
5
6
7
8
9
2017 2018 2019 2020 2021
ResidualIncomes*TenThousand
Years
THE RESIDUAL VALUE
49 | P a g e
access to the required facilities. Quality is assured as only authorized Rolls-Royce facilities are
used for CorporaCteare.
Experience
For more than 100 years Rolls-Royce has been providing power for aircraft, ships and land
applications and during this time has constantly been at the forefront of technological innovation.
As a result, Rolls-Royce engines now power the largest, fastest and longest-range business jets in
the world. We were the creators of the revolutionary "Power by the Hour" concept and on that
strong foundation have built a complete range of engine services.
Reliability
Rolls-Royce is the business jet engine market leader, designing, manufacturing and supporting
engines on the fastest, longest-range, most reliable business jets. The same level of attention to
detail that is applied to the design of these engines has now been used to develop Corporate Care.
Proven logistics, rigorous quality control and scrupulous record keeping are among the many
features that combine to make Corporate Care the perfect choice for owners of Rolls-Royce
engines.
Operating income
Underlying revenue up 3%; solid growth in aftermarket revenues offset lower new engine sales
Underlying profit before financing 14% lower than 2014; largely reflecting lower gross margins,
due to adverse mix effects and higher R&D charges, partially offset by the impact of life-cycle
cost improvements, retrospective long-term contract accounting benefits, a reversal of impairment
of Contractual Aftermarket Rights and lower restructuring costs
50 | P a g e
Example £m OE Total care 5 year Linked
Revenue 10 8 18
Less concessions 6 - 6
Netrevenue 4 8 12
Cost 5 4 9
Cash 1 4 3
Overall margin 25%
£3.8bn order book growth; led by Trent 900 and XWB orders – XWB now nearly 50% of order
book New Trent engines, 1000 TEN, XWB-97 and 7000, on track for entry into service in 2017
0 2 4 6 8 10 12 14 16 18 20
Revanue
Less concessions
Net revanue
Cost
Cash
Overall margine
TotalCare
Linked Total care 5 year OE
51 | P a g e
and 2018Good progress modernising supply chain to reduce costs and increase capacity for Trent
XWB ramp up over next four years
Example £m OE Total care 5 year Linked
Cash net Revenue 4 8 12
Marginal adjustment 2.7 2.7 _
Netrevenue 6.7 5.3 12
Cost 5 4 9
Cash 5 4 9
Profit recognized 1.7 1.3 3
Overall margined 25% 25% 25%
cash flow 1 4 3
Profit Vs cash 2.7 2.7 _
0
2
4
6
8
10
12
14
Cash net
Revanue
Marginal
adjustment
Net revanue Cost Cash Profit
recognised
Overall
margine
cash flow Profit Vs
cash
OE Total care 5 year Linked
52 | P a g e
4. Risk Management
Risk Assessment Concept
In today’s competitive business environment, companies are faced with greater uncertainties (risks
and opportunities) as they strive to create value. And in the wake of the current global economic
crisis, businesses in a bid to stay competitive have taken crucial measures. It is therefore of great
importance for businesses to make appropriate strategic decisions on uncertain outcomes, as it
would, at worst, cut down losses due to disaster and, at best, improve profitability in cases of
opportunities. According to the Committee of Sponsoring Organisations of the Tread way
Commission. “Uncertainties present both risks and opportunities, with potential to erode or
enhance value.”
ERM describes the set of activities businesses undertake to deal with all the diverse risks that face
it in a holistic, strategic and integrated method. These risks include financial, strategic, operational,
hazardous and compliance, spanning the organization. Many such risks have significant impact on
the profitability, effectiveness and reputation of business enterprises.
ENTERPRISE RISKS
Enterprise risk is the aggregate of all functional and process risks a business entity faces in the
course of carrying out its business activities. Such risks would include the types described by the
Casualty Actuarial Society18 1. Hazard risk listed below: 2. financial risk 3. Operational risk 4.
Strategic risk
ERM is clearly distinguished from risk management and financial risk management in the Risk
and Insurance Management Society Inc. (RIMS) Executive Report, 2009. While risk management
is described as a broad term for the business discipline that is concerned with the protection of the
assets and profits of an organization by either reducing the potential before it occurs, mitigating
the impact of a loss if it occurs and the execution of a swift recovery after a loss occurs, financial
risk management is the term often used by non-financial institutions to describe the mitigation
process for their financial exposure; enterprise risk management on the other hand is said to
53 | P a g e
represent a revolutionary change in the risk management discipline that broadens the scope of risk
management behaviour.
Risk Assessment Process
The major issue is the persistent contextual myopia in risk management, concentrated solely on
hazard risk; risk management has been a disconnected function and risks do not always fit into
categories quite neatly. An example would be business interruption at a plant; this has finance,
marketing and reputational implications beyond the effects on production and the applicability of
the property insurance policy. The growing recognition that coordinating and financing all facets
of organizational risk effectively is critical for the maximization of success.
The strategic implications of ERM refer to the effects of the ERM process on setting strategic
objectives and on strategy. As ERM is a process whose mechanisms should be/are built into the
infrastructure of the entity with the goal of ensuring, with reasonable assurance, that the entity’s
objectives in all four categories—strategic, operations, reporting and compliance—are achieved,
the strategic implication may be described as follows:
1. The board of directors and management have reasonable assurance that they understand to what
extent the entity’s strategic objectives are being met or affected.
2. The same as above goes for their operations objectives.
3. The entity’s reporting is reliable.
4. All applicable laws and regulations are being complied with
ERM in an organization that adequately supports its implementation in its day-to-day activities as
follows:
• Increased transparency, through accountability, responsibility and performance management
from top-down
• Increased traceability, for the purpose of compliance, audit and analysis
• Improved responsiveness and flexibility, through monitoring, anticipation of events and
definition of responses
54 | P a g e
• Continuous business optimization, through clear understanding of strategic options
• Improved strategic alignment, through de-risking of business processes
• Improved business/information technology alignment, through de-risking the links between
business and IT
In recent times, it has become clear it is not enough to manage the business supply chain effectively
and efficiently as a disruption in business activities in remote points of a business’s value chain
may have substantial adverse effect on it due to the bullwhip effect. The management of both the
downstream and upstream stakeholders of your supply chain become essential if you are to have a
stable supply chain. Thus, by extending your business network, you not only manage supplier and
customer relationships, you also aim at monitoring and supporting de-risking their activities as it
effects your business. In such a case, we look at ERM as managing an enterprise that comprises
all the substantial enterprises that make up the value-chain of the business.
Starting from the top, the board of directors is responsible for the oversight of ERM as well as
reporting to stakeholders on the risk management strategy and risk issues. The board may decide
to delegate specific aspects of its ERM duties to the audit or risk committee. The audit or risk
committee reports to the board.
55 | P a g e
Selection of risk assessment technique
Rolls-Royce management was heavily focused on safety and compliance. They proposed all
projects must attach a risk register that analyses the key risks and their potential consequences.
The risk registers are a review of business performance.
They established a structured approach to risk management, where risks were formally identified
and recorded in a corporate register, which was viewed and updated on a regular basis, and
mitigation plans were proposed for all significant risks. External assessment showed that the risk
management process at Rolls-Royce more satisfied the Turnbull compliance requirements. (The
Turnbull report was published by the Institute of Chartered Accountants in England and Wales on
the implementation of the international control requirements of the combined code of corporate
governance.)
Risk appetite
Judging again from the management philosophy and style, it is clear that they had, in more or less
a qualitative measure, a medium appetite for risk as they were not in the habit of avoiding or
accepting the total responsibility for very high risks (such as new product development in the
aerospace industry) but rather shared such very high risks among risk relationship partners.
Oversight by board of directors
The director of operational risks oversaw all risks. The board of directors regularly reviewed the
group’s exposuree
Control Activities
In such cases where the control activities are not stated, the control activities may either be the
same as the response action or had been integrated into regular business activities.
56 | P a g e
Information and Communication
The effectiveness of their communication and the flow of information are evaluated from the
“Assignment of responsibility and authority” part of the section titled Internal Environment.
Monitoring
Apart from the regular or periodic reviews, other monitoring activities that may be specific to the
particular topic or risk in question may be stated. Where none is given in the analysis table, or not
explicitly stated that there is none, it is taken that the regular ongoing monitoring is in place.
Comparison of risk assessment techniques
See the “Assignment of responsibility” part of the section titled Internal Environment.
The company manages an array of risks with a mixture of its own management style and standard
risk management techniques. A risk culture is evident in its management philosophy. With Rolls-
Royce’s medium risk appetite, Rolls-Royce continues to strive in a volatile business environment.
Simple calculation of the risk priorities following the scientific definition of risk: Risk priority
number/index/weighted value=(likelihood of occurrence)x(severity of impact):
57 | P a g e
1-8 = Low priority (light green)
9-15 = Medium priority (yellow)
16-25 = High priority (red)
The logic behind the weighting system used is based on the following:
• The priority is set as low where either the likelihood of occurrence or the impact is below
moderate (3) or is inversely related as one counter balances the other hypothetically.
• The priority is set as medium where both likelihoods of occurrence and impact are above rare (2)
but are both not major (4) as one counterbalances the other hypothetically and fall between low
and high.
• The priority is high where both the likelihood of occurrence and the impact is above or equal to
major (4).
It is observed that the three highest risks to Rolls-Royce, according to the prioritization exercise
shown above, were foreign exchange transaction risk, new engines sales and engine parts sales.
The one with the most priority was foreign exchange transaction risk.
58 | P a g e
Risk assessment technique
a. Internal environment of the firm. This brings into consideration the management
philosophy, risk appetite, objectives and business operations. It was earlier observed that
even though they both had a management philosophy, the risk appetite and their objectives,
which exposed them to this risk, differ, as do their business operations. The latter means a
different market environment, which implies different influential forces.
External environment of the firm. This relates to the potential economic, social, technological
(and so on) factors, as well as competitors that influence the firm’s decisions. In the case of Infosys,
a large portion of its expenses is in Indian rupees and a depreciation of this currency is favourable
to its bottom line. For Rolls-Royce, a substantial amount of its income — 38 percent of the U.K.
turnover — was in U.S. dollars and, therefore, the company tried to minimize the impact.
59 | P a g e
5. Social Economics and environmental analysis
Analysis of the environmental impact
We focus on maintaining our drive to reduce the environmental impact of our business activities
globally. This is part of our Group environmental strategy. Our Global HS&E policy sets out the
commitments we have made. Our vision is to be known for the excellence in our HS&E
performance in all our business activities, and our products.
We are committed to full compliance with all relevant legal requirements and we continually
monitor performance in all our businesses. We have global standards and guidance notes in place
for identifying mandatory requirements and for the evaluation of legal compliance. This forms a
key aspect of our HS&E management system framework that meets the requirements of the
environmental management systems standard ISO 14001.
We have global certification to international environmental management standard ISO 14001
across our manufacturing facilities.
In 2015 we had one environmental incident. This involved a discharge to controlled waters from
a site in the UK, related to a loss of containment follow a leak that subsequently entered the local
water course. A comprehensive spill response operation minimized any impact on the local
environment. In 2015 we had one environmental incident. This involved a discharge to controlled
waters from a site in the UK, related to a loss of containment follow a leak that subsequently
entered the local water course. A comprehensive spill response operation minimized any impact
on the local environment.
We continue to invest in improving the operational performance of our facilities, both production
and office environments, and our process with the intent of building a better business. The
investment will be increased public access to information and wide modern public services, and
thus will improve the living conditions of the people. The functioning of the system will not be
associated with the creation of a nuisance for residents and employees of the building and in the
neighbourhood.
60 | P a g e
Social and economic analysis
Understanding our energy use helps us to identify inefficiencies and opportunities for
improvement across our global business.
Our energy use in 2015 was 112 MWh/£m. This represents a decrease of 3% compared to 2014.
We have a global target to reduce our energy use in our operations and facilities by 30%,
normalized by revenue, by 2020. This is base-lined on our 2014 performance and excludes product
test and development. We continue to invest in energy efficient technology to reduce our
energy consumption and cost. These include upgrading lighting systems, variable speed drives and
voltage optimization.
GREENHOUSE GAS EMISSIONS
Investing in renewable energy sources and other opportunities to reduce our greenhouse gas
(GHG) emissions reduces costs and mitigates the risks associated with energy price volatility.
Our total GHG emissions for 2015, excluding product test and development, was 455 ktCO2e.
This represents a 8% reduction compared to 2014. We have a global target to reduce the GHG
emissions in our operations and facilities by 50%, absolute, by 2025. This is base-lined on our
2014 performance and excludes product test and development.
We continue to drive energy efficiency and have developed a number of low carbon and renewable
energy projects across our global facilities. These include tri-generation power systems, combined
heat and power systems, and solar projects.
Waste reduction
At Rolls-Royce over 60 per cent of our waste is generated from four principal sources:
 Metals
 Chemical processing and cleaning wastes
 Packaging
 Foundry sand
61 | P a g e
Social and Economic gain
We have introduced a new higher-stretching target to reduce our total solid and liquid waste by 25
per cent by 2020. This is normalized by revenue, baseline at 2014. To support this target we have
initiated a global waste improvement programmed to drive efficiencies and associated cost
reductions.
Whilst our main focus has been on our principal waste streams we are also working to embed a
strong culture of waste management across the business. In our UK catering sites we have
introduced re-usable coffee cups this year and have already seen a 25 per cent reduction in the use
of disposal single-use coffee cups.
RECYCLING AND ZERO WASTE TO LANDFILL
We have made good progress with improving our solid waste recycling rate over the past 15 years
and continue to explore further opportunities for improvement. This includes the introduction of
Society
culture
Social institutions ( Economic , Political ,
Education , Religion )
Social inequality ( Class , Race , Gender)
Groups
Roles
Socialisation
Interaction
Self
62 | P a g e
new technology to improve against the waste hierarchy. We manage the closed loop recycling of
high value metals through our well-established Revert program.
We have made significant improvements especially to the recycling rate of our Asia-Pacific
operations over the last year through diverting previously land filled and incinerated waste to
suitable recyclers. Building on this success we have set a new global target to achieve zero waste
to landfill by 2020, excluding hazardous waste.
Conflict minerals
Rolls-Royce is committed to creating a sustainable business. For us that means driving profitable
growth whilst achieving a positive economic, social and environmental impact. We fully support
the principles of regulations that promote socially responsible sourcing of minerals.
We set high standards for the way we do business. This helps our customers know that we can be
trusted to deliver excellence. We request our suppliers to only provide us with raw materials,
components and subassemblies that are derived from responsibly-sourced minerals that can be
certified in accordance with OECD guidelines. Suppliers must cascade these requirements through
their own suppliers to ensure rigor throughout the supply chain.
We recognize that determination of the original source of many of the materials used in our supply
chain will be a difficult and lengthy process. Despite these challenges, we are committed to
working with our suppliers and industrial partners to take all practical steps to meet customer
requirements and assure supply chain compliance.
63 | P a g e
6. Conclusion
As implementation of IT systems has become an important part of almost all the organisation
which involves huge risk, funds to support and feasibility study gives the conclusion for an
organisation to go ahead and implement or to follow the same old traditional system.
In the current project we have completed the feasibility study of implementation of IOT in total
care which gives the higher return on investment within few years after completion and selling of
the project. We have studied the various compliances with the IT strategy implementation
pertaining to certain policies specified by the standard organisation for this project. The future
scope of the project is also set. The characteristics of the project pertaining to various parameters
like social and economic, and project links for the IOT in Rolls Royce is also specified. The general
objective of the project is also set depending upon product indicator and outcome indicator.
As we have set the objectives to fulfil that the technical analysis is also performed like the
functional requirement and comparing with the current IT system from which after investing how
much extra revenue adds to our company is evaluated. Depending on the result of the outcome
indicators we started preparation of the server room, preparation and implementation of new
systems, compliances with rules in the field of IT project. The functioning of the IOT for total-
care preparation begins to achieve this we used Prince-2 project management methodology for
managing the entire project. We made an innovative business model according to our comforts
and customer requirement.
The financial analysis made some assumption and methodology by considering around 5 years.
We calculated expenditure for the project in the years by considering 6% of the discounted present
value. What will be? The future residual values for current project systems and operating income
per flight is all calculated. As the investment of the IT requires huge investment we followed ISO
31000 for risk management.
Finally what will be the impact of our project on the social economic and environmental analysis
is also analysed.
In the current project we will be getting the profit around 25% per flight after 6 years of the
complete implementation of IOT in our total care project.
64 | P a g e
ANNEXES:
Annexe 1. 13 Scheduled by Gantt chart, Source: own Illustration
65 | P a g e
REFERENCE:
Wu, J., Wang, Y. 2007. Measuring IT implementation success: The key-users' viewpoint of the IT
to produce a viable IS in the organization. Computer in Human Behavior, Vol. 23, pp. 1582–1596
Addo-Tenkorang, R., Helo, P. 2011. IT implementation: A Review Literature Report. Proceedings
of the World Congress on Engineering and Computer Science (WCECS), Vol. II, October 19-21,
San Francisco, USA
Somers, T. M., Nelson, K. G. 2004. A taxonomy of players and activities across the IT
implementation project life cycle. Information and Management, 41, pp. 257 – 278.
Moon, Y. B. 2007. A review of the literature. Int. J. Management and EntIOTrise Development,
Vol. 4, No. 3, pp. 235 – 264.
Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2004. “Enterprise
Risk Management — Integration Framework.” Application Technique.
Dittmar, L. n.d. “What are the Primary Challenges and Trends in Governance, Risk and
Compliance?” Mash Compliance Television video.
http://compliance.mashnetworks.com/player.aspx?channelGUID=74fe7a5d-7fce-427e- 863d-
c0b597c427fb&clipGUID=5615f32e-e0fc-4cd6-9edc-f259766a6abd
Gilbert, Jill Barson. 2007. “Enterprise Risk Management: The New Imperative.” Lexicon Systems
Inc. white paper. (November).
http://www.lexiconsystems.com/pubs/whitepapers/EnterpriseRiskManagementNewImperative.p
df. Jablonowski, M. 2009. “The Bigger Picture: Recognizing Risk Management’s Social
Responsibility.” BNET.com: CBS Business network. (September).
http://findarticles.com/p/articles/mi_qa5332/is_7_56/ai_n35637633/?tag=content;col1
https://www.ukessays.com/essays/information-technology/background-of-rolls-royce-
information-technology-essay.php
http://www.computerweekly.com/news/2240077174/Rolls-Royce-reduces-transport-costs-with-
new-logistics-system
66 | P a g e
https://www.google.co.in/search?q=roadmap+of+it+implementation+in+rolls+royce&biw=15
17&bih=708&tbm=isch&imgil=6iNSR1W02I80XM%253A%253BjB32NN4defrczM%253Bhttps
%25253A%25252F%25252Fwww.linkedin.com%25252Fpulse%25252F20140613210540-
308844246-erp-implementation-project-rolls-royce-
case&source=iu&pf=m&fir=6iNSR1W02I80XM%253A%252CjB32NN4defrczM%252C_&usg=
__ZJBXmuY9Wi2lASLE4QYRr6I_BDU%3D&ved=0ahUKEwiIj-
DfmuXRAhWH_SwKHSZbBJQQyjcIKQ&ei=87-MWMjJOYf7swGmtpGgCQ
https://books.google.co.in/books?id=xJuuCwAAQBAJ&pg=PR16&lpg=PR16&dq=social+and
+economical+rolls+royce+in+iot&source=bl&ots=OtFiZBxI2I&sig=nCQFnvdEP723fWidm_e
Oe48vbYc&hl=en&sa=X&ved=0ahUKEwjJt7yfm-
XRAhVJEiwKHebiCpsQ6AEIKDAC#v=onepage&q=social%20and%20economical%20rolls%2
0royce%20in%20iot&f=false
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV%3Asi0016
https://www.wrike.com/blog/project-management-basics-prince2-explained/
http://www.rolls-royce.com/~/media/Files/R/Rolls-Royce/documents/investors/annual-
reports/2015-annual-report-v1.pdf
http://www.rolls-royce.com/~/media/Files/R/Rolls-Royce/documents/investors/annual-reports/rr-
ar-2008-tcm92-11217.pdf
https://www.google.pl/search?q=Benefit-
cost+rate&espv=2&biw=1366&bih=638&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiMu
53_y8zRAhWK3SwKHdALCXsQ_AUICCgB#imgrc=UCf4luoSG9FYcM%3A
https://www.google.pl/search?q=social+aspects+definition&espv=2&biw=1366&bih=638&sou
rce=lnms&tbm=isch&sa=X&ved=0ahUKEwj8lOGA0MzRAhVCXSwKHcluA4wQ_AUICCgB#i
mgrc=iAU8El6FN8PcUM%3A

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IoT

  • 1. 0 | P a g e IMPLEMINTATION OF IT IN ROLLCE ROYCE –“IOT” INTERNET OF THINGS Warsaw University Of technology Faculty of Global Production engineering and management ICT and CAx in Production Academic advisor: Prof. Dr. Jerzy Krawiec Authors, Submitted on: 29.01.2017 Winter Semester
  • 2. 1 | P a g e Table of contents 1. INTRODUCTION.....................................................................................................................................................................5 COMPLIANCEWITH THE ITSTRATEGY IMPLEMENTATION....................................................................................................................6 ROLLS ROYCEINFORMATION SECURITY (POLICY)................................................................................................................................7 PROJECT DEFINITION.........................................................................................................................................................................8 THESCOPEOF THE PROJECT..............................................................................................................................................................9 SUB PROJECTS..................................................................................................................................................................................9 CHARACTERISTICS OF THEPROJECT..................................................................................................................................................10 ROADMAP OF THEORIGIN TO TOTALCARE........................................................................................................................................10 PROJECT LINKS...............................................................................................................................................................................13 SOCIAL AND ECONOMIC ENVIRONMENT...........................................................................................................................................14 IDENTIFIED PROBLEM......................................................................................................................................................................15 GENERAL OBJECTIVEOF THEPROJECT ..............................................................................................................................................15 OUTCOME INDICATOR....................................................................................................................................................................16 PRODUCT INDICATOR.....................................................................................................................................................................17 2. TECHNICAL ANALYSIS.........................................................................................................................................................18 TECHNICAL CAPABILITIES.................................................................................................................................................................18 THEFUNCTIONALITY.......................................................................................................................................................................25 ANALYSIS OF EXISTING ITRESOURCES..............................................................................................................................................25 DEVELOPMENTOF TARGET STRUCTURE OF ITSYSTEMS.....................................................................................................................26 SERVER ROOMADAPTATION ...........................................................................................................................................................28 PREPARATION AND IMPLEMENTATION OF NEW SYSTEMS..................................................................................................................29 TECHNICAL ASSUMPTION................................................................................................................................................................30 COMPLIANCEWITH RULES IN THEFIELD OF ITPROJECT.....................................................................................................................30 FUNCTION OF INTERNET OF THINGS TOTALCARE ...............................................................................................................................34 PROJECT MANAGEMENTMETHODOLOGY.........................................................................................................................................35 INNOVATIVE BUSINESS MODEL........................................................................................................................................................37 3. FINANCIAL ANALYSIS .........................................................................................................................................................42 ASSUMPTION AND METHODOLOGY .................................................................................................................................................42 EXPENDITURES FOR THEPROJECT....................................................................................................................................................43 EXPENDITURE FOR THEPROJECTIN THEYEARS..................................................................................................................................44 DISCOUNTED VALUEOF EXPENDITURE OF THEPROJECTIN THEYEARS................................................................................................45 BENEFIT COST RATE .......................................................................................................................................................................46
  • 3. 2 | P a g e THERESIDUAL INCOME...................................................................................................................................................................46 THEAMOUNT OF DISCOUNTED RESIDUAL VALUE..............................................................................................................................48 OPERATING INCOME.......................................................................................................................................................................49 4. RISK MANAGEMENT ..........................................................................................................................................................52 RISK ASSESSMENT CONCEPT ...........................................................................................................................................................52 RISK ASSESSMENT PROCESS............................................................................................................................................................53 SELECTION OF RISK ASSESSMENTTECHNIQUE ...................................................................................................................................55 COMPARISON OF RISK ASSESSMENTTECHNIQUES.............................................................................................................................56 RISK ASSESSMENTTECHNIQUE.........................................................................................................................................................58 5. SOCIAL ECONOMICS AND ENVIRONMENTAL ANALYSIS ............................................................................................59 ANALYSIS OF THEENVIRONMENTAL IMPACT.....................................................................................................................................59 SOCIAL AND ECONOMIC ANALYSIS...................................................................................................................................................60 WASTEREDUCTION........................................................................................................................................................................60 SOCIAL AND ECONOMIC GAIN.........................................................................................................................................................61 6. CONCLUSION .......................................................................................................................................................................63
  • 4. 3 | P a g e List of figure Figure 1: Road Map at Rolls Royce, ......................................................................................... 11 Figure 2 Source: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:em0028 .... 14 Figure 3 Cloud backup system................................................................................................... 19 Figure 4 Company ISO system.................................................................................................. 24 Figure 5 Roles of existing IT System......................................................................................... 25 Figure 6 Development of target structure in IT system.......................................................... 27 Figure 7 Server Room................................................................................................................. 28 Figure 8 Implementation stage .................................................................................................. 29 Figure 9 OPC UNIFIED ............................................................................................................. 33 Figure 10 Function of IOT ......................................................................................................... 34 Figure 11 Prince2 methodology ................................................................................................. 36 Figure 12 Own Illustration......................................................................................................... 38 Annexe 1. 13 Scheduled by Gantt chart, Source: own Illustration ....................................... 64
  • 5. 4 | P a g e List of abbreviation IOT Internet of Think CSFs Critical success factors MES Manufacturing Execution Systems ERM Enterprise risk management ERP Enterprise resource planning
  • 6. 5 | P a g e 1. Introduction Rolls-Royce Limited owned a British luxury-car and aero engine manufacturing business founded in 1904 by Charles Stewart Rolls and Sir Frederick Henry Royce. Rolls-Royce Limited was incorporated on 15 March 1906 as a vehicle for their ownership of their Rolls-Royce business. Their business quickly developed a reputation for superior engineering quality, "best car in the world", and building on F H Royce's existing standing. Rolls-Royce became a leading manufacturer of piston aero-engines after it was brought into building them by the First World War Implementing an IOT system brings in changes to the way people work within the organization. Most organizations implement IOT systems that have been purchased from software vendors. These kind of IOT systems require customization during adoption. Processes will change and there may be job cuts and rationalization of responsibilities within departments due to the customization. All these will definitely evoke resistance from the employees and this has to be managed effectively before, during and after the implementation of the IOT package. IOT systems differ from in-house or custom development systems in a number of ways. One of the ways stems from the fact that IOT systems are considered to be built on best business practices and thus the user may be required to make changes to business processes and procedures in order to fully utilize the system. The IOT system may need to be customized to match the business process that the user is familiar with. After the successful implementation the user usually becomes dependent on the IOT vendor for assistance and updates (Somers and Nelson; Wu and Wang). The successful implementation or adoption of technology by an organization must take into account the human and management issues. Users of these technologies, such as information systems/technology, are at the central of these implementations and adoption. It is therefore important to allow these users to participate in the implementation process. User participation has traditionally been recognized as a critical component in Information System.
  • 7. 6 | P a g e Compliance with the IT Strategy implementation Long-term on-going project aimed at studying the state-of-the-art of Internet of thing’s implementations. The aviation industry is capital intensive and also has high operating and maintenance costs. A single jet engine can cost $16 million, and on a Transatlantic flight will consume 36,000 gallons of fuel, which at today’s airline fuel prices comes to around $54,000 per trip, or more than $5,000 an hour. Maintaining the aircraft on the ground can add hundreds of dollars per hour. Although fuel costs have been falling, airlines are still pursuing ways to reduce running expenses. Some areas being pursued include increasing fuel efficiency of jet engines, optimizing flight paths, and improving maintenance. KEY TECHNOLOGY ISSUES, SUCH AS DATA INTEGRITY AND TECHNOLOGY INFRASTRUCTURE, WERE ADDRESSED EARLY. “Aircraft and engines have gotten more talkative and the scope of our services has increased,” said Nick Farrant, senior vice president of Rolls-Royce, in a recently published case study. “There are terabytes of data coming from large aircraft fleets, with gigabytes per hour—rather than kilobytes—to process and analyse.” He added that “we and our customers are drowning in data, and many existing systems struggle to filter the signal from the noise and offer the means to analyse things in a consistent way. “The implementation plan and subsequent progress was communicated regularly to employees, suppliers and customers. Lead the security input during design workshops, articulating risk mitigation requirements to the business. Helping Rolls-Royce’s customers understand the value of the data analytics initiative is vital to the success of the project, and Microsoft Power BI has played a critical role in those efforts. “In the past, building our own chart and dashboard tools was laborious, and it really slowed down some of our product development,” Beesley says. “With Power BI, we can very quickly and easily create reports and dashboards that tell quite a compelling story.”
  • 8. 7 | P a g e Rolls Royce information security (policy) Rolls-Royce foresees that by gaining access to wider sets of operational data, it will be able to offer more valuable services to customers. Another important benefit is that the company will gain a better understanding of how it should structure its support contracts, how it can better manage risk, and what its product development needs are. Assist with research, review and selection of security technologies to ensure alignment with security roadmaps. Support large programs of work led by IT and the business by consulting on matters related to security and creation of security requirements. Influence internal stakeholders across the business on all aspects of cyber security. Apply and maintain specific security controls as required by policy and local risk assessments to maintain confidentiality, integrity and availability of business information systems. (Brainy Quotes, (2001). Richard Branson Quotes) With IOT technology allowing Rolls-Royce engineers to track and analyse engine performance mid-flight, the company is better placed to identify underperforming components. This allows the team to implement proactive maintenance strategies (replacing underperforming components), not only reducing the frequency of unexpected / severe faults but also improving engine efficienc y and lowering fuel consumption. It is estimated a 1% reduction in fuel usage translates to US$250,000/plane/year. Applying this to Delta’s current fleet of 830 planes sees a potential saving of ~US$210M per year. Predicative maintenance also has the added benefit of allowing Rolls- Royce to carry lower inventory. Data analytics of engine performance could also be shared with plane body manufacturers (e.g. Boeing, Airbus) to improve plane design / aerodynamics. Develop best in-class IOT capabilities – IOT capability is still new, partnerships with leading tech-companies need to be collaborative and progressive. Investigate the potential of mid-air feedback to pilots who are aren’t optimizing engine performance. Not only has Rolls Royce been an early adopter of IOT technology but strategic partnerships with tech-firms such as Microsoft have placed the company in a good position to stay on the forefront of IOT advancement and continue to deliver real value for its customers. (Robinson, D -2016)
  • 9. 8 | P a g e IN ADDITION TO THE REQUIREMENTS OF ISO9001, AS9100: Requires Greater Emphasis on Risk Management Introduces “Special Requirements” Introduces “Critical Items” Requires Measured: Requirements conformance Requires Measured: Delivery performance Adopts Proven Product Development Processes Eliminates “recurring corrective actions” Project definition The focus of this paper is on user participation in the context of IOT systems implementation. Past research on IOT implementation has focused on IOT adoption, success measurement, implementation methodologies and success factors. There is a dearth of research as far as user participation in IOT system implementation is concerned. The closest attempt in recognizing the role of users in the successful implementation of IOT systems is in the identification of critical success factors (CSFs) where user participation and involvement is mentioned as one of the CSFs. Review of literature conducted by Moon and Addo- Tenkorang and Helo mention that one of the most cited critical success factors in the implementation of IOT systems is user participation and involvement. However, this is only presented in form of user education and training in order to fully use the implemented system. These studies do not argue for or against the contributions that user participation makes towards a successful implementation of an IOT system. Most studies have focused on participation of users in traditional data processing environments such as participation in the development of transaction processing systems and management
  • 10. 9 | P a g e information systems. These studies, however, have identified the need for research into user participation in other types of systems and in a variety of environments. IOT systems cut across the entire enterprise in terms of functionality and usage. They are highly complex and require a different implementation approach. Most studies on IOT implementation have analysed the implementation from the organizational or industry perspective. There has been little research focus in IOT system adoption at the individual or user level. The scope of the Project Rolls-Royce and Microsoft collaborate to create new digital capabilities. The Internet of Things is an emerging topic of technical, social, and economic significance. Consumer products, durable goods, cars and trucks, industrial and utility components, sensors, and other everyday objects are being combined with Internet connectivity and powerful data analytic capabilities that promise to transform the way we work, live, and play. Projections for the impact of IOT on the Internet and economy are impressive, with some anticipating as many as 100 billion connected IOT devices and a global economic impact of more than $11 trillion by 2025. And Rolls Royce is one of them who is implementing IOT at the earlier stage. At the same time, however, the Internet of Things raises significant challenges that could stand in the way of realizing its potential benefits. Attention-grabbing headlines about the hacking of Internet-connected devices, surveillance concerns, and privacy fears already have captured public attention. Technical challenges remain and new policy, legal and development challenges are emerging. Sub Projects VIRTUALIZATION Implementing virtualization in manufacturing environments moves the technology into the business-critical realm. Manufacturing Execution Systems (MES) and related automation applications can gain advantages from virtualization that go beyond even those seen in typical enterprise software applications — although special concerns apply as well.
  • 11. 10 | P a g e DIGITAL SALES Rolls-Royce Motor Cars sold a record number of cars last year, breaking through the 4,000 mark for the first time in its 111-year history. The luxury car maker sold 4,063 cars, up 12% on last year, and marking the fifth consecutive year of record sales. Sales in the US increased by almost a third, by 40% in Europe and in the Middle East by 20%, the firm said. And in the world there are more than 13,000 jet engines manufactured and getting service by Rolls Royce. (www.rollsroyce.com ) SYSTEM INTEGRATION Integrating IOT with other enterprise applications is the more problematic area of IOT system integration. In addition to the IOT business information backbone, many companies have other systems for Manufacturing Execution (MES) and data collection, Quality management and process control (may be a part of MES), Warehouse Management , Transportation Management , and other “outside” systems that could benefit from integration with the IOT backbone. Characteristics of the project Roadmap of the origin to totalcare The IT implementation in the ROLLS ROYCE begin much more earlier, as all the industries are now implementing IT system to replace all the human workforce with this system. This IT implementation began with firstly SAP, for maintaining the Enterprise Resource Planning which reduced the cost of human workers, which monitors the financial matters of the company by taking into account the cash flow in the company, Supply Chain Management which is very helpful in controlling the inventory, manage the customers’ orders etc., Customer Requirement Management which helps to build a strong relations with customers and resolve all their product on time, Human resources, manufacturing and data warehouse. This IT implementation will reduce the expenditure with just one time investment.
  • 12. 11 | P a g e Figure 1: Road Map at Rolls Royce, Source: own illustration Further they also used BIG Data is used to better understand customers and their behaviours and preferences. Companies are keen to expand their traditional data sets with social media data, browser logs as well as text analytics and sensor data to get a more complete picture of their customers. As Roll Royce were just making the advancement in new product which is not sufficient to for further profit to the company so the era begins. Total care with IOT in which they first sell the product then, they charge for the maintenance of this product which increases the revenue of the company. THE ROADMAP SHOWS THE STEPS INVOLVED IN FINAL RUNNING OF THE PROJECT. PROJECT PREPARATION: - Initial project planning: - As in any project initial planning is required to make it successful. So we have the plan when to implement the new product in the market, where will be our potential customers, does this will increase the revenue for the company etc.
  • 13. 12 | P a g e Technical requirement: - After the initial project planning. We also look after the technical requirement. Quality check: - This is one of the major important step in every step as we need high quality as it is cost of human life’s for total care. BUSINESS REALISATION Project management: - For completing the project we have to design complete project so that it can be completed in the desired time and place. So that all the investment calculations are accurately achieved. Organisational change management: - Whenever we are progressing in our project there will be many modification in the structure of the project as this is a huge project of the Rolls Royce the change in the organisational managements are reduced. Training: - As we are proceeding further in the project we need to train accordingly as this implementation is new to the current market. Develop system environment: - We must also develop a system environment which is workers friendly which enhance their skills and talents for the progress of project. Quality check: - This is one of the major important step in every step as we need high quality as it is cost of human life’s for total care. REALISATION Baseline configuration and confirmation: - A configuration management database (CMDB) is a data that contains all relevant information about the components of the information system used in an organization's IT services and the relationships between those components. Develop programs, interface: - All the programs required for the developing of the programs and interface employees from Rolls Royce will just give the working of the hardware remaining software are taken care by Microsoft. Final integration: - After all the completion of the project we are going to integrate all software and hardware engines from Rolls Royce to check the compatibility between them.
  • 14. 13 | P a g e Quality check: - This is one of the major important step in every step as we need high quality as it is cost of human life’s for total care. FINAL PREPARATION Detailed project planning: - At the last the final preparation of the project is checked properly as per the schedule plan of the project. Cutover:- It specially refers to switching from an old (hardware/software) system to a replacement system, covering the overlap system to a replacement system covering the overlap from when the new system is live until the old system has been outdated. Training: - Even from the start till end training is required even for the cutover estimation and evaluation of the IT systems are of importance. Quality check: - This is one of the major important step in every step as we need high quality as it is cost of human life’s for total care. GO LIVE AND SUPPORT Production support: - After all the test and analysis the actual production begins with all the support to go live and support the production. Project end: - Finally the project is completed after fulfilling all the support and delivered to customers. Here comes the next step the roadmap of our project. Implementation of Internet of things. Real time support with Microsoft monitors every moment and reduce the downtime of any aeroplanes total care services. Project links Order Management, Manufacturing, Human Resource, Financial system, and distribution with external suppliers and Customers. The Europe 2020 strategy should enable the European Union to achieve growth that is: Smart, through the development of knowledge and innovation;
  • 15. 14 | P a g e Sustainable, based on a greener, more resource efficient and more competitive economy; Inclusive, aimed at strengthening employment and social and territorial cohesion. Figure 2 Source: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:em0028 Social and economic environment SOCIAL VIEW Increased number of employees during the construction of this project will require huge number of workforce will create more job opportunities. As we know that together we grow to solve the global problems. So as the new project implementation involve globalised opportunities of engineers to solve problems instantly. Development and maintenance service using high tech production base requires social interaction with all the people in the globe. ECONOMICAL VIEW As we are the major gas turbine manufacturers for aeroplanes, for large ships, military equipment’s in the world have become a major player in that and occupied almost all part of the engine requirement. Due to which our revenue is being constant there was no room for the increasing 33.40%, 34% 8.30%, 8% 24.20%, 24% 30.00%, 30% 0.70%, 1% 3.30%, 3% National strategy Refrance framework Improving access to employment and sustainability Improving human capital Improving the social inclusion of less- favoured persons Increasing the adaptability of workers and fi rms, enterprises and entrepreneurs
  • 16. 15 | P a g e revenue. So we started this new venture of business like Total care in which we first sell the engine and then we charge for the maintenance and monitoring the engine on a real-time scenario, which added one of the additional major income for our company. For accomplishment of this project we require an advanced infrastructure with fully IT support system. This also requires a huge investment by considering future demand. Due advent of this IOT the Rolls Royce discovered this technology for revenue making and see themselves how the products are being used in today and the upcoming generation. Identified problem CULTURAL PROBLEMS: • The improvements made to the company as a whole, the implementation project team expected a high acceptance of the system in areas that provide just as good or better functionality than the old system. • Thus, breaking the traditional segregation of OBUs and departments. BUSINESS PROBLEMS: • Business structure, to identify potential problem within new system • over 1000 additional PCs will be required, over 6000 SAP licenses TECHNICAL PROBLEMS • accuracy of data, systems that has to be normalized, screened and stored in a sensible data format within the new systems data repository General objective of the project A single jet engine can cost $16 million, and on a Transatlantic flight will consume 36,000 gallons of fuel, which at today’s airline fuel prices comes to around $54,000 per trip, or more than $5,000 an hour. Maintaining the aircraft on the ground can add hundreds of dollars per hour. Some areas
  • 17. 16 | P a g e being pursued include increasing fuel efficiency of jet engines, optimizing flight paths, and improving maintenance. Rolls-Royce addressed these growing data analysis challenges by building a monitoring solution into its Total Care Services, which oversee responsibility for engine reliability and maintenance. The company assumes all responsibilities for analysing engine data in real time to manage customers’ engine maintenance and maximize aircraft availability. Outcome Indicator An indicator is an objective way of measuring that progress is being achieved, through collecting factual information. Data collected about the indicator tells us if the expected change is happening i.e. it indicates or shows if change has happened. Indicators are selected at the initial planning stage of a project or programme so that change can be measured from when implementation starts. The first set of data collected for each indicator at the start of a programme is called the baseline. Outcome indicators – measure the intermediate changes as a result of the project or programme activities. Monitoring outcomes tells us if activities are bringing about the intended intermediate changes. In all programmes, there is likely to be a wide variety of outcomes that are expected, for example changes in community knowledge and attitudes, increased access to and utilisation of Protection, Education, Health, and Emergency services, increased quality of services, and changes in financing, policy or practice. These outcomes are expected to lead, in combination, to the final impact that is planned. The table below shows the Progress of engines delivered from base year to 2021 Table 1 Product Outcome Indicators Source ofinformation Unit 2017 2021 number of Engine delivered in civil aerospace (Trent100 , Trent 900 ,AE V2500 ,BR725) www.rollsroyce.com no unit 830 850 number of Engines delivered in defence aerospace (F35 ,F136 , AE2100) www.rollsroyce.com no unit 555 580
  • 18. 17 | P a g e Underlying services revenues from implementing in engines Marine www.rollsroyce.com % 43 51 number of Engines delivered in civil nuclear energy www.rollsroyce.com no unit 47 55 Sales per employee www.rollsroyce.com no unit 174 191 Product Indicator The table below shows the progress in Number of departments that have been benefited, Number of data bases available and Number of customer registers available online. There is no strict rule about how many indicators should be used but there are a few issues to consider. We need to collect information for each indicator at least at the beginning and end of the programme, and probably more frequently (for education programmes most indicators need to be tracked at the beginning and end of each school year). So, it is advisable not to choose too many indicators that might require excessive work to collect. However, it is often the case that no single indicator can give a full picture of the change that is occurring, particularly where information is sensitive and difficult to collect reliably. Instead we often need to use more than one indicator, and a combination of quantitative and qualitative indicators, to provide an overall assessment. Indicators Source of information Unit 2017 2021 Number of departments that have been benefited Survey no unit 2 7 Number of data bases available Survey no unit 0 1 Number of customer registers available online Survey no unit 0 1 Table 2 product Indicator
  • 19. 18 | P a g e The strategy for selecting indicators should be based on what we are trying to measure i.e. the project or programme rationale and logic, activities and objectives. It is therefore very important for monitoring and evaluation that each programme has a clear proposal for how inputs and activities will lead to expected outputs, outcomes and final impacts, before developing indicators. 2. Technical analysis Technical capabilities Most large enterprises run remarkably secure WLANs. They minimize open-authentication access points – and those use captive portals – and implement WPA2-enterprise authentication and encryption protocols, which are very difficult to crack. However, well-configured access points inhibit the growth of the Internet of Things over Wi-Fi. The emerging IOT model connects headless sensors over wireless connections to a cloud service that manages them and collects traffic. This service then offers a portal for analytics and smart phone based user control. Enterprise lighting, energy management and other sensors are moving to this architecture where the device hitches a ride on the Wi-Fi network, but only to connect to its service in the cloud: the WLAN is essentially transparent in the architecture. The sensor later needs to authenticate to its cloud service, but only after it have a path through the WLAN. In general to implement and to run IOT Recommended connection speed 500-800 kb/s or faster.TOI Business Objects Cloud requires no more bandwidth than is required to browse the internet. All application modules are designed for speed and responsiveness with minimal use of large graphic files.
  • 20. 19 | P a g e Improving the possibilities: REMOTE OFFICES A remote office is an office that is located in a different or remote geographical area. An organization may have a main office, as well as remote offices in another city, country or continent. Remote office data system storage and recovery is a common and useful organizational system. REMOTE CONNECTIVITY Remote access refers to the ability to access a computer, such as a home computer or an office network computer, from a remote location. This allows employees to work offsite, such as at home or in another location, while still having access to a distant computer or network, such as the office network BACKUP SYSTEM Cloud backup, also known as online backup, is a strategy for backing up data that involves sending a copy of the data over a proprietary or public network to an off-site server. The server is usually hosted by a third-party service provider, who charges the backup customer a fee based on capacity, bandwidth or number of users. In the enterprise, the off-site server might be owned by the company, but the chargeback method would be similar. Figure 3 Cloud backup system
  • 21. 20 | P a g e Online backup systems are typically built around a client software application that runs on a schedule determined by the purchased level of service. If the customer has contracted for daily backups, for instance, the application collects, compresses, encrypts and transfers data to the service provider's servers every 24 hours. To reduce the amount of bandwidth consumed and the time it takes to transfer files, the service provider might only provide incremental backups after the initial full backup. Cloud backups often include the software and hardware necessary to protect an organization's data, including applications for Exchange and SQL Server. Most subscriptions run on a monthly or yearly basis. While initially used mainly by consumers and home offices, online backup is now used by small and medium-sized businesses (SMBs) and larger enterprises to back up some forms of data. For larger companies, cloud data backup may serve as a supplementary form of backup. FEATURES OF CLOUD BACKUP SYSTEM In the enterprise, cloud data backup services are primarily used for non-critical data. Traditional backup is a better offering for critical data that requires a short recovery time objective because there are physical limits as to how much data can be moved in a given amount of time over a network. When a large amount of data needs to be recovered, it may need to be shipped on tape or some other portable storage media. COST OF CLOUD DATA BACKUP Third-party cloud backup has gained popularity with SMBs and home users because of its convenience. The technology has an initial upfront cost and then lowers monthly or yearly payment plans that appeal to many smaller operations. Capital expenditures for additional hardware are not required and backups can be run dark. However, the cost of keeping data in the cloud for years adds up. In addition, costs rise as the amount of data to be backed up to the cloud increases. In terms of return on investment (ROI), it is important for an organization to consider the long- term costs of backing up to the cloud. A five-year projection is recommended to properly estimate future expenses and decide whether using the cloud will help the organization break even after initial costs. After these costs are offset, ROI on cloud-based backups can be determined.
  • 22. 21 | P a g e INTEGRATION  Systems that could benefit from integration with the TOI:  Manufacturing Execution (MES)  Quality management and process control (may be a part of MES)  Warehouse Management (WMS)  Transportation Management (TMS)  And/or other “outside” systems AUTHENTICATION “RSA® SecurID® authentication has enabled Rolls Royce to use the Internet securely as a cost- effective and efficient extension to corporate network. Rolls Royce evaluating using RSA SecurID authentication as a standard security mechanism to enable their own workforce easier remote access to the company LAN. KEY REQUIREMENTS: Strong authentication with one-time password to safeguard sensitive data on the Internet Accurate, real-time fraud/threat detection with minimal impact to user experience Solution that is interoperable with third-party applications HARDWARE PLATFORM Operating System: Microsoft® Windows Server 2012 64 Bit (x64) Database: Microsoft® SQL Server 2012 64 Bit (x64) CPU: 3-20 Users: 1x Intel® Xeon® E321-75 Users: 2x Intel® Xeon® E375+ Users: 4x Intel® Xeon® E3 RAM Memory: 3-10 Users: 12 GB More than 10 Users: typically 12-32GB dependent on the user count HD Space: MS SQL Server – System partition 100GB/Data partition 100GB
  • 23. 22 | P a g e MANAGEMENT SYSTEMS A quality management system (QMS) is a set of policies, processes and procedures required for planning and execution (production/development/service) in the core business area of an organization. (i.e. areas that can impact the organization's ability to meet customer requirements.) QUALITY MANAGEMENT SYSTEM Quality Control Quality Assurance Quality Management (Detection) (Prevention) (Direction) BS 5750 1979-1987 ISO 9001 1987-2000 ISO 9001 2000 SCOPE This International Standard describes fundamentals of quality management systems, which form the subject of the ISO 9000 family, and defines related terms. This International Standard is applicable to the following: a) Organizations seeking advantage through the implementation of a quality management system; b) organizations seeking confidence from their suppliers that their product requirements will be satisfied; c) Users of the products; d) Those concerned with a mutual understanding of the terminology used in quality management e) Those internal or external to the organization who assess the quality management system or audit it for conformity with the requirements of ISO 9001 (e.g. auditors, regulators, certification/registration bodies);
  • 24. 23 | P a g e f) Those internal or external to the organization who gives advice or training on the quality management system appropriate to that organization; g) Developers of related standards. THE BENEFITS OF A QMS The trend of implementing a quality management procedure is gaining popularity in all organizations, since there are tremendous benefits in using a quality management system. Some of the benefits are explained below: Achievement of Project Scope This system facilitates a business, to attain the objectives that have been defined in the organization strategy. It ensures the achievement of stability and reliability regarding the techniques, equipment, and resources being used in a project. All project activities are integrated and aligned towards the achievement of quality products. These efforts commence by identifying the customer needs and expectations, and culminate in their contentment. Increase in Production Improved production is achieved due to proper evaluation techniques being applied, and better training of the employees. A strict process control is directed towards performance consistency, and less scrap. Supervisors experience less late night problematic phone calls, since the employees are trained on troubleshooting. Less Rework Quality is measured continuously due to the appropriate procedures that ensure immediate corrective actions on occurrence of defects. Since efforts are directed towards quality products, rework due to warranty claims is minimized. This reduction increases customer confidence, and increase in business. Increased Financial Performance
  • 25. 24 | P a g e Investment in quality management systems are rewarded by improved financial performance. UCLA conducted a research on the companies being traded on the New York Stock Exchange, and observed that the financial performance of the companies that obtained ISO 9000 Quality Standard certification was improved significantly, compared to the other companies. Increase in Market Share Other quality management system benefits include proper management of project risks and costs, and identification of development prospects. This results in an increase in market share and reputation, and capability to react to industry opportunities. Improvement in Internal Communications The quality management system emphasizes the issues related to operations management. This encourages frequent interaction between project departments or groups, and promotes harmony. All these factors contribute to improved quality, and customer satisfaction. Do What the Customer Wants Managed Measure Analyse Improve COMPANY Policy Customer Focus Committed Objectives Determine & Communicate Authority & Responsibilities Review People Buildings, Equipment, Machinery, etc Environment Planning Provide Resources Customer Satisfaction System Processes Product Non-conforming Product Data & Info Corrective Action Preventive Action Control Our Processes Control Our Documentation ISO 1.1 1.2 2.1 2.2 2.3 2.4 2.5 2.6 2 3.1 3.2 3.3 3. 4.2 4.3 4.4 4. 4.1 4.5 4.6 5.1.1 5.1.2 5. 5.2 5.1.3 5.1.4 5.3 5.4 5.5 Selling Purchasing Designing Calibrating Production Figure 4 Company ISO system
  • 26. 25 | P a g e ISO 9001: 2000 ISO 9001:2000 specifies the requirements for a QMS that may be used by organizations for internal application, certification or contractual purposes. The process approach is shown in the conceptual model from the ISO 9001:2000 Standard, recognizing that customers play a significant role in defining requirements as inputs, and monitoring of customer satisfaction is necessary to evaluate and validate whether customer requirements have been met. The functionality Analysis of existing IT resources The Existing IT system in Rolls Royce is ERP. The business environment is dramatically changing. Companies today face the challenge of increasing competition, expanding markets, and rising customer expectations. This increases the pressure on the company to lower total costs in the entire supply chain, shorten throughput times, drastically reduce inventories, expand product choice, provide more reliable delivery dates and better customer service, improve quality, and efficiently coordinate global demand, supply, and production. Figure 5 Roles of existing IT System
  • 27. 26 | P a g e EXCELLENT PROJECT MANAGEMENT Successful ERP implementation requires that the organization engage in excellent project management. This includes a clear definition of objectives, development of both a work plan and are source plan, and careful tracking of project progress. And the project plan should establish aggressive, but achievable, schedules that in still and maintain a sense of urgency. DATA ACCURACY Data accuracy is absolutely required for an ERP system to function properly. Because of the integrated nature of ERP, if someone enters the wrong data, the mistake can have a negative domino effect throughout the entire enterprise. Therefore, educating users on the importance of data accuracy and correct data entry procedures should be a top priority in an ERP implementation. ERP systems also require that everyone in the organization must work within the system, not around it. Employees must be convinced that the company is committed to using the new system, will totally changeover to the new system, and will not allow continued use of the old system. To reinforce this commitment, all old and informal systems must be eliminated. If the organization continues to run parallel systems, some employees will continue using the old systems Development of target structure of IT systems This figure shows the how the target structure of IT systems is developed in Rolls Royce. It department is divided in Hardware Infrastructure, Software support, Network support and Application support. Further Project management, User Support, System Support, Quality Management. Finally, security support, Management Support, Database support, Telecommunication
  • 28. 27 | P a g e Figure 6 Development of target structure in IT system
  • 29. 28 | P a g e Server room adaptation Server room location is the first consideration, even before considering the layout of the room’s contents. Most designers agree that, where possible, the computer room should not be built where one of its walls is an exterior wall of the building. Exterior walls can often be quite damp and can contain water pipes that could burst and drench the equipment. Avoiding exterior windows means avoiding a security risk, and breakages. Avoiding both the top floors and basements means avoiding flooding, and leaks in the case of roofs. If a centralized computer room is not feasible, server closets on each floor may be an option. This is where computer, network and phone equipment are housed in closets and each closet is stacked above each other on the floor that they service. The picture shows the connection of client and server. Maintenance / Administration UI and GUI (web browser) are related to from server and client are related by means of RESTTUL API and map server Figure 7 Server Room
  • 30. 29 | P a g e Preparation and implementation of new systems. THE IMPLEMENTATION IS DONE IN THE FOLLOWING STEPS Exploration: Asses needs are examined and implementation is considered Installation: Resources are acquired, and organisation prepares for the implementation of new systems and prepares the staff Initial Implementation: Implementation adjusts, manage the changes, and Initiate improvement cycle Full implementation: The software is monitored and manages, Achieves fidelity and outcome and further improves fidelity and outcomes. Figure 8 Implementation stage COMPATIBILITY  More Flexible but Harder to implement  Under name type compatibility, only two type names must  Be compared to determine compatibility  Under structure type compatibility , the entire structure
  • 31. 30 | P a g e  Of the two types must be compared. Technical assumption "Companies that successfully alter their business around IT can achieve a significant window of competitive advantage" [Tapscott D (2004)]. This doesn't 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 costs 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 down 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 works 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 processed information provided to them it won't be possible for them to carry out these tasks. Compliance with rules in the field of IT project TECHNOLOGICAL NEUTRALITY Technology neutrality is one of the key principles of the European regulatory framework for electronic communications. Since 2011, technology neutrality has also been recognized as a key
  • 32. 31 | P a g e principle for Internet policy IOTCD, 2011.Technology neutrality means that technical standards designed to limit negative externalities (e.g. radio interference, pollution, safety) should describe the result to be achieved, but should leave companies free to adopt whatever technology is most appropriate to achieve the result. Microsoft has signed a deal with aeroplane engine maker Rolls- Royce that looks like a textbook demonstration project for the Internet of Things (IOT). Microsoft's cloud-based IOT and analytics platforms will be used to improve efficiency for airlines by diagnosing problems with jet engines. Rolls-Royce will adopt Microsoft's Azure IOT Suite and Cortana Intelligence Suite to quickly diagnose potential faults in engines fitted to aircraft in service around the globe. Information on engine health, air traffic control, route restrictions and fuel use will be collected from hundreds of sensors inside the engines, and analysed to detect any operational anomalies or signs of developing faults. Airlines will be able to use the data to cut fuel use, fly on more efficient routes and ensure they have the right replacement parts in the places they are needed most. One of the promises of the IOT is that it will enable new business models, and the new capabilities will become an important part of the Rolls-Royce Total-Care programme, which is based on earning revenue when aircraft fly, rather than when engines are serviced. Azure IOT Suite has been generally available since September as a collection of services running on Microsoft's Azure platform. It includes the Azure IOT Hub service to connect to devices in the real world and gather data, along with storage and analytics services. Cortana Intelligence Suite, previously Cortana Analytics, was announced earlier this year as a platform that combines machine learning and analytics with what Microsoft. METHODOLOGY FOR RESEARCH FOR INFORMATION Rolls Royce used data analytics for the research for information after big data. But the analytics changed the structure and lead to the new business venture, which is known as Total care product. Rolls Royce since 1971, is one of the leaders in big data. Investing in analytics was transformational for Rolls Royce and made a loss-making aircraft manufacturer become number two player in the aircraft engine industry.
  • 33. 32 | P a g e To bring its vision of a powerful and scalable data analytics system to life, Rolls-Royce chose to build it on the Microsoft Azure platform. “We realized early on, as customer and engine data volumes increased, that we were looking at a big-data problem,” so “Microsoft quickly concluded that a cloud platform like Azure was a ready-made solution for us.” “With Microsoft, it isn’t just about the infrastructure, its end-to-end and global. There are the skills, the capabilities, the service offering, the development environment, the security. It all just fit together.” Once Rolls-Royce started to collaborate with Microsoft, it began to develop a number of new capabilities using an expansive set of Azure platform services. Starting with Azure IOT Suite, Rolls-Royce will be able to collect and aggregate data from disparate and geographically distributed sources at an unprecedented scale. “With the increase in the volume and velocity of data that we’re looking at, Microsoft Azure IOT Suite will have a key part to play in our ability to reliably aggregate data across our customers’ fleets. Initially, the types of data being processed include snapshots of engine performance that the planes send wirelessly during a flight, massive downloads of comprehensive “black box”–type data, technical logs, and flight plans as well as forecast and actual weather data provided by third parties. Using Microsoft Cortana Intelligence Suite, Rolls-Royce will be able to analyse a rich set of data and perform data modelling at scale to accurately detect operational anomalies and help customers plan relevant actions. “Microsoft Cortana Intelligence capabilities are helping us filter the signal from the noise across large data sets so we can focus on finding the real value in the data. Our vision of future digital capability will need to aggregate many sources of data and provide a platform for collaboration with customers.” UNIFIED ARCHITECTURE The OPC Unified Architecture (UA), released in 2008, is a platform independent service-oriented architecture that integrates all the functionality of the individual OPC Classic specifications into one extensible framework.
  • 34. 33 | P a g e THIS MULTI-LAYERED APPROACHACCOMPLISHES THE ORIGINAL DESIGN SPECIFICATION GOALS OF: Functional equivalence: all COM OPC Classic specifications are mapped to UA Platform independence: from an embedded micro-controller to cloud-based infrastructure Secure: encryption, authentication, and auditing Extensible: ability to add new features without affecting existing applications Comprehensive information modelling: for defining complex information FUNCTIONAL EQUIVALENCE Building on the success of OPC Classic, OPC UA was designed to enhance and surpass the capabilities of the OPC Classic specifications. OPC UA is functionally equivalent to OPC Classic, yet capable of much more: Discovery: find the availability of OPC Servers on local PCs and/or networks Address space: all data is represented hierarchically (e.g. files and folders) allowing for simple and complex structures to be discovered and utilized by OPC Clients On-demand: read and write data/information based on access-permissions Subscriptions: monitor data/information and report-by-exception when values change based on a client’s criteria Events: notify important information based on client’s criteria Methods: clients can execute programs, etc. based on methods defined on the server Figure 9 OPC UNIFIED
  • 35. 34 | P a g e Integration between OPC UA products and OPC Classic products is easily accomplished with COM/Proxy wrappers that are available in the download section. Function of internet of things totalcare Basic parameter sensing: - Whenever the aeroplane is in flight the engine is connected to many varieties of sensors which will continuously sensing all the changes inside the engine. Local monitoring and prognostics: - All the sensors connected to the engines are monitored in a real time basis in the local area of the station. Figure 10 Function of IOT Low bandwidth real-time streaming:-Low bandwidth is used to transfer the data as it can travel at a faster rate of data along with highly accurate data with minimum errors in it. We can process real-time streaming data as fast as you collect it, you can respond to changing conditions
  • 36. 35 | P a g e like never before. With Tale-end, you can capture and aggregate millions of events per second then instantly. Operation centres: - At each and every few airport we have set a service station to prevent a long downtime of the flights for maintenance purposes. To prevent in the differences between live streaming and the downtime due to huge failure, we have come up with this new business called the total care. Advanced sensors, high bandwidth communication and big data: - After complete setting of the part we use some advanced sensors which can monitor some of the advanced features like future prediction. We also use BIG data in monitoring and knowing the future requirement by collecting information as we run the further fleets at higher distances. After this implementation of the project 52% of the revenue comes from this new business ventures of the Rolls Royce. The above graph shows how the implementation of this project resulted in various increase in the cash-flow values of the company. We can also see that 92% of the fleets improved the business by 92% and also 87% of the existing fleets have signed for this total-care services. Project management methodology PRINCE2 (an acronym for Projects IN Controlled Environments) is a de facto process-based method for effective project management. Used extensively by the UK Government, PRINCE2 is also widely recognised and used in the private sector, both in the UK and internationally Application of Prince-2 in Rolls-Royce
  • 37. 36 | P a g e Figure 11 Prince2 methodology As Prince-2 is of most important in project management Rolls Royce is also of implementing this. Rolls Royce is selling their engines in different varieties. Firstly only the engine and other one is making the Rolls Royce engine and then service of maintaining with total-care.
  • 38. 37 | P a g e From the above figure we can see that how the business works. Is there a total-care agreement?? If no then it will have lessor airline airframe then time and flow of the parts in the total engine motion and time flow line in the manufacturing changes. And also the contractual after-market deal depends with the customers. If yes Then the flow begins like was the Total care agreement negotiated with the same counter-part as IOT?? If no then lessor airframe and they will sell only the engine and regarded as unlinked total care contract and contractual aftermarket rights depends. If yes then Total care and IOT linked contract accounting with the Airline Innovative Business model Invest in R&D and Skilled people The strength of our current product portfolio results from consistent and long-term investment in R&D and our ability to bring technology to industrial applications. In addition to our extensive in- house technology capability, we have partnerships with world-leading universities in order to create new technology. We continuously invest in our global network of 31 world-class University Technology Centres (UTCs) where we build the foundation for the next generation of products. These technologies feed into our demonstration programmes, where robust validation takes place before proceeding in a structured and controlled way into new production Developed Technology that anticipates customers need Hold a two-way conversation in multiple places and engage the customer in ways you can further alleviate their pain points or solve problems. You must create open, inviting channels for them to use and effective ways to capture what they say and do. This can take the form of direct customer feedback via online forums or phone conversations. Identifying additional potential problems or areas where customers are not fully satisfied can drive innovation. Finding the right projects you
  • 39. 38 | P a g e can execute precisely and quickly will allow you to sink your teeth into the bigger, more time-Figure 12 Own Illustration
  • 40. 39 | P a g e consuming Engineering Excellence Innovation is our lifeblood. Our capacity to innovate, year on year, is key to our competitive edge. It is our strong tradition of innovation that helps us to continually deliver value to our customers. We are embedding a culture of innovation across the business. We are looking to all our people for ideas that improve how we work and how we are organised, as well as the technology we develop and the products and services we provide. We know that to drive innovation we must create the right environment; curious, challenging, unafraid of failure, open-minded and able to change with pace. We have over 15,690 professional engineers worldwide who can apply their intellect and experience to improving the performance of our products. In 2015 we recruited 160 graduates into Engineering and Manufacturing Engineering Early Career Development Programmes. Our 150 strong Rolls-Royce Engineering Fellowship applies world-class leadership of technical expertise to our most complex challenges. The annual Sir Henry Royce Awards celebrate excellence in innovation, along with other innovation awards across the Group. We also have a global network of 31 University Technology Centres, engaging over 700 academics in fundamental research into cutting edge technologies. Operational Excellence Rolls-Royce has shaken up its senior management team and scrapped two divisions as part of his attempt to turnaround the struggling engineer. Warren East, who took charge of the company in July, will scrap the aerospace and land & sea divisions that split Rolls into two parts, leading to the departure of two senior executives. The move means that Rolls will operate with five smaller businesses all reporting directly to East. The Rolls chief executive plans to bring in a chief operating officer to assist him in running the company. In total, roughly a dozen senior jobs will be affected by East’s change Rolls said the revamp will “simplify the organization, drive operational excellence and reduce cost”.
  • 41. 40 | P a g e Capturing aftermarket value The acquisition of ITP strengthens Rolls-Royce’s position on its Civil Aerospace large engine growth programmes by capturing significant additional value from long-term aftermarket revenues, including on the high volume Trent 1000 and Trent XWB engine programmes where ITP has played a key role as a risk and revenue sharing partner. It also enhances the group’s manufacturing and services capabilities and adds value to the Defence Aerospace business, particularly on the TP400 and EJ200 programmes. With their excellent facilities, services and products, ITP has been a trusted partner for Rolls-Royce and other engine manufacturers. Investment in future program development While advances in aircraft and engine technology have delivered significant progress in reducing the environmental impact of civil aircraft, there are still more challenging improvement targets being set. The newly established Flightpath 2050 environmental goals (which are all relative to the capabilities of typical new aircraft in 2000) include a 75 per cent reduction in CO2 emissions per passenger kilometre and 90 per cent reduction in NOx emissions. The perceived noise emission of flying aircraft is reduced by 65 per cent. Although our engines are hugely competitive in today’s market, looking forward, we anticipate that a new generation of engines will be required to keep pace with these changing demands. In 2014. Grow market share and installed base Rolls is structured into four divisions: Aerospace, Defence Aerospace, Marine and Energy. The company experienced some rare negative headlines after a fleet of new Qantas A380s was grounded after an explosion in a Rolls engine. These issues have now been rectified. Earlier this year the latest Trent XWB engine took to the skies for the first time and Rolls opened a new manufacturing and training facility in Singapore, close to growth markets. The secret to Rolls’ business model is in the aftercare market. As the company’s installed base of equipment grows, the market for parts and maintenance also grows. The Company makes precision equipment and appropriate care of turbines is essential. This means each new piece of equipment delivered should boost future profitability.
  • 42. 41 | P a g e Secure and maximize service opportunity Rolls-Royce has more than 13,000 engines for commercial aircraft in service around the world, and for the past 20 years, it has offered customer’s comprehensive engine maintenance services that help keep aircraft available and efficient. As the rapidly increasing volume of data coming from many different types of aircraft equipment overtakes the airlines’ ability to analyze and gain insight from it, Rolls-Royce is using the Microsoft Azure platform to fundamentally transform how it uses data to better serve its customers. Worldwide, flight delays and disruptions cost the airline industry millions of dollars every year. Even a small reduction in “aircraft on ground” (AOG) time can translate into significant amount of money, so airlines are always looking for ways to improve the efficiency of maintenance activities. The same applies to fuel costs. Fuel generally accounts for a whopping 40 percent of airlines’ operating expenses. Even a 1 percent optimization of fuel consumption can save an airline millions of dollars annually. A lot of factors affect how much fuel is consumed on a flight, including the flight path selected, weather, engine efficiency, and operational choices such as how much fuel to carry on each flight. The heavier the fuel load, the more fuel the aircraft will burn. A clean engine burns less fuel, but washing engines is time consuming and expensive. Determining when the optimum time is for each of the engines in a fleet to get washed requires the analysis of a lot of data. Design and make world-class products A geared design with a variable pitch system, the carbon titanium fan system is further developed to allow the deletion of the thrust reverser, enabling a truly slim–line nacelle system. In essence, these designs are an evolution of our three-shaft architecture. Advance evolves the core architecture for further efficiency benefits and future growth of overall pressure ratio, as well as applying lightweight LP system technologies.
  • 43. 42 | P a g e 3. Financial analysis Assumption and methodology VIABILITY OF THE PROJECT Viability is when the state of development of an ICT project is sufficient to enable it to survive over time and provide ongoing benefit. Project must show good potential for financial viability, be capable of evolution and expansion, be financially viable with ongoing benefits. For our project we propose seven best practices fostering a project’s viability over time  Drafting a viability plan  Establishing a profile of our client  Determining your priority needs  Establishing a budget  Planning activities  Ensuring financial self-sufficiency  Measuring performance METHODOLOGY We are using Web Estimation Methodology WEM includes a parametric model estimation of effort; the effort is calculated by estimating the amount of man-hours needed to meet with a set of functional requirements of a system. Definition of time constraints, Budget constraints, expected returns and effort, Determines whether the project is feasible within the technical and financial expectations of the company rend Forecasting Method, Extrapolation Method In the percent of sales method, we assumed that you are given the sales forecast. Assume that you are not given the sales forecast but you have to do it yourself
  • 44. 43 | P a g e Expenditures for the project PROJECT BUDGET The own contribution for the project is ₤ 58155 which is 15 % of the Project Gross budget .And the financial aid from the fedral and state gran ts for the project is ₤ 329545 which is 85 % of the gross project budget . Categories Amount in Pounds ₤ 1.Servieces Technical Assistance 250000 Monitoring Evaluation and audit 20000 2.Suppliers Equipment , software 2000 Publications 700 3.Operating Costs Events ( Training , Mentoring, Co ordination 50000 Office operating costs ( staff , consumables 20000 4.IEC Project information and Education 14000 Communication visibility 6000 5.Contegencies Contingencies 25000 Total (Gross) 387700
  • 45. 44 | P a g e Expenditure for the project in the years The above table shows the expenditure of the project in the years from 2017 – 2021 with details of amount of EU funding and own finding with a total expenditure of ₤ 384700. year EU Funding ₤ Own funding ₤ Total ₤ 2017 40000 10000 50000 2018 52000 13000 65000 2019 56000 14000 70000 2020 61000 16000 77000 2021 68000 17000 85000 Total 277000 70000 347000 40000,7% 52000,10% 56000,10% 61000,11% 68000,12% 277000,50% 345000,62% EU Funding 2017 2018 2019 2020 2021 Total
  • 46. 45 | P a g e Discounted value of Expenditure of the project in the years The discounted value of expenditure in the years is calculated in table below at a discount rate 6% The year year Total value Discounted rate 6 % DCF 6% 2017 0 50000 1 32500 2018 1 65000 0.94 18599.21 2019 2 70000 0.88 3278.698 2020 3 77000 0.82 2338.78 2021 4 85000 0.76 347000 Total 347000 403716.7 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 0 1 2 3 4 2017 2018 2019 2020 2021 Total Total value Discounted rate 6 % DCF 6%
  • 47. 46 | P a g e Benefit Cost Rate The benefit and cost ratio are calculated in e above table and a ranking is given depending on the cost ratio. Project 4 has highest cost ratio of 29.1 standing in the first place. Projects Costs in million ₤(C) Benefits (B) B-C Benefit B/C Cost Ratio B-C/C Ranking 1 26 30 4 1.153846154 3.466666667 4 2 50 70 20 1.4 14.28571429 2 3 45 30 -15 0.666666667 -22.5 6 4 70 120 50 1.714285714 29.16666667 1 5 30 45 15 1.5 10 3 6 100 99 -1 0.99 -1.01010101 5 The benefit and cost ratio are calculated in e above table and a ranking is given depending on the cost ratio. Project 4 has highest cost ratio of 29.1 standing in the first place. The residual income Warren East, Chief Executive, said: “In the context of challenging trading conditions our overall performance for the year was in line with the expectations we set out in July 2015. It was a year of considerable change for Rolls-Royce: in our management, in some market conditions and in our near-term outlook. At the same time, there were some important constants: the underlying growth of our long-term markets, the quality of our mission critical technology and services, and strength of customer demand for these, which are reflected in our growing order book.” KEY FINANCIALS Underlying revenue £13.4bn (FY 2014: £13.9bn), down 1% at constant exchange rates Underlying profit before tax £1,432m (FY 2014: £1,620m), down 12% at constant exchange rates
  • 48. 47 | P a g e £1,355m before one-off items (see page 4) in line with lower half of 2015 guidance range restructuring programmes started prior to November 2015 continue to make good progress: £145m of annualised cost savings expected by end 2017Final payment to shareholders reduced by 50% to 7.1 pence per share (2014 final: 14.1 pence) Trading outlook for 2016 unchanged 4% growth in order book underpins confidence in strong market share growth for Civil Aerospace (ref http://www.rolls-royce.com/media/press-releases/yr-2016/pr-2016-02-12-rr-holdings-plc- 2015-full-year-results.aspx) Equity Charge=Equity Capital*Cost of Equity The amount of the residual value New transformation programme launch Set up a transformation team to focus activities, add pace and simplicity to the business and drive cost reductions of between £150m and £200m per annum:20% reduction in top two layers of senior management; further reductions planned Roughly Residual income Disposable income Cost of its Capital Opportunity cost Bondholders
  • 49. 48 | P a g e 50% of targeted cost savings already identified Initial exceptional restructuring charge of £75- 100m in 2016 Further actions underway to generate additional savings in 2017 24/7 - 24 hours a day, 365 days a year. Full transfer of financial risk - resulting in tax benefits Enhanced aircraft resale value - fully transferable with the aircraft, therefore increasing its residual value Increased aircraft availability - A lease engine is included in the plan when your engine is in the shop The amount of discounted residual value Corporate Care covers the cost of all Engine parts and labor when the time comes for the engine to be sent to an authorized Rolls-Royce overhaul facility. The cost of parts and labor for mandatory and recommended service bulletins, as well as unscheduled shop visit costs for non-FOD events is also covered. There is also an optional service that covers the replacement of Life Limited Parts. This comprehensive coverage permits accurate budgeting based on each operator's forecast utilization. The Rolls-Royce global network of repair and overhaul operations ensures convenient 0 1 2 3 4 5 6 7 8 9 2017 2018 2019 2020 2021 ResidualIncomes*TenThousand Years THE RESIDUAL VALUE
  • 50. 49 | P a g e access to the required facilities. Quality is assured as only authorized Rolls-Royce facilities are used for CorporaCteare. Experience For more than 100 years Rolls-Royce has been providing power for aircraft, ships and land applications and during this time has constantly been at the forefront of technological innovation. As a result, Rolls-Royce engines now power the largest, fastest and longest-range business jets in the world. We were the creators of the revolutionary "Power by the Hour" concept and on that strong foundation have built a complete range of engine services. Reliability Rolls-Royce is the business jet engine market leader, designing, manufacturing and supporting engines on the fastest, longest-range, most reliable business jets. The same level of attention to detail that is applied to the design of these engines has now been used to develop Corporate Care. Proven logistics, rigorous quality control and scrupulous record keeping are among the many features that combine to make Corporate Care the perfect choice for owners of Rolls-Royce engines. Operating income Underlying revenue up 3%; solid growth in aftermarket revenues offset lower new engine sales Underlying profit before financing 14% lower than 2014; largely reflecting lower gross margins, due to adverse mix effects and higher R&D charges, partially offset by the impact of life-cycle cost improvements, retrospective long-term contract accounting benefits, a reversal of impairment of Contractual Aftermarket Rights and lower restructuring costs
  • 51. 50 | P a g e Example £m OE Total care 5 year Linked Revenue 10 8 18 Less concessions 6 - 6 Netrevenue 4 8 12 Cost 5 4 9 Cash 1 4 3 Overall margin 25% £3.8bn order book growth; led by Trent 900 and XWB orders – XWB now nearly 50% of order book New Trent engines, 1000 TEN, XWB-97 and 7000, on track for entry into service in 2017 0 2 4 6 8 10 12 14 16 18 20 Revanue Less concessions Net revanue Cost Cash Overall margine TotalCare Linked Total care 5 year OE
  • 52. 51 | P a g e and 2018Good progress modernising supply chain to reduce costs and increase capacity for Trent XWB ramp up over next four years Example £m OE Total care 5 year Linked Cash net Revenue 4 8 12 Marginal adjustment 2.7 2.7 _ Netrevenue 6.7 5.3 12 Cost 5 4 9 Cash 5 4 9 Profit recognized 1.7 1.3 3 Overall margined 25% 25% 25% cash flow 1 4 3 Profit Vs cash 2.7 2.7 _ 0 2 4 6 8 10 12 14 Cash net Revanue Marginal adjustment Net revanue Cost Cash Profit recognised Overall margine cash flow Profit Vs cash OE Total care 5 year Linked
  • 53. 52 | P a g e 4. Risk Management Risk Assessment Concept In today’s competitive business environment, companies are faced with greater uncertainties (risks and opportunities) as they strive to create value. And in the wake of the current global economic crisis, businesses in a bid to stay competitive have taken crucial measures. It is therefore of great importance for businesses to make appropriate strategic decisions on uncertain outcomes, as it would, at worst, cut down losses due to disaster and, at best, improve profitability in cases of opportunities. According to the Committee of Sponsoring Organisations of the Tread way Commission. “Uncertainties present both risks and opportunities, with potential to erode or enhance value.” ERM describes the set of activities businesses undertake to deal with all the diverse risks that face it in a holistic, strategic and integrated method. These risks include financial, strategic, operational, hazardous and compliance, spanning the organization. Many such risks have significant impact on the profitability, effectiveness and reputation of business enterprises. ENTERPRISE RISKS Enterprise risk is the aggregate of all functional and process risks a business entity faces in the course of carrying out its business activities. Such risks would include the types described by the Casualty Actuarial Society18 1. Hazard risk listed below: 2. financial risk 3. Operational risk 4. Strategic risk ERM is clearly distinguished from risk management and financial risk management in the Risk and Insurance Management Society Inc. (RIMS) Executive Report, 2009. While risk management is described as a broad term for the business discipline that is concerned with the protection of the assets and profits of an organization by either reducing the potential before it occurs, mitigating the impact of a loss if it occurs and the execution of a swift recovery after a loss occurs, financial risk management is the term often used by non-financial institutions to describe the mitigation process for their financial exposure; enterprise risk management on the other hand is said to
  • 54. 53 | P a g e represent a revolutionary change in the risk management discipline that broadens the scope of risk management behaviour. Risk Assessment Process The major issue is the persistent contextual myopia in risk management, concentrated solely on hazard risk; risk management has been a disconnected function and risks do not always fit into categories quite neatly. An example would be business interruption at a plant; this has finance, marketing and reputational implications beyond the effects on production and the applicability of the property insurance policy. The growing recognition that coordinating and financing all facets of organizational risk effectively is critical for the maximization of success. The strategic implications of ERM refer to the effects of the ERM process on setting strategic objectives and on strategy. As ERM is a process whose mechanisms should be/are built into the infrastructure of the entity with the goal of ensuring, with reasonable assurance, that the entity’s objectives in all four categories—strategic, operations, reporting and compliance—are achieved, the strategic implication may be described as follows: 1. The board of directors and management have reasonable assurance that they understand to what extent the entity’s strategic objectives are being met or affected. 2. The same as above goes for their operations objectives. 3. The entity’s reporting is reliable. 4. All applicable laws and regulations are being complied with ERM in an organization that adequately supports its implementation in its day-to-day activities as follows: • Increased transparency, through accountability, responsibility and performance management from top-down • Increased traceability, for the purpose of compliance, audit and analysis • Improved responsiveness and flexibility, through monitoring, anticipation of events and definition of responses
  • 55. 54 | P a g e • Continuous business optimization, through clear understanding of strategic options • Improved strategic alignment, through de-risking of business processes • Improved business/information technology alignment, through de-risking the links between business and IT In recent times, it has become clear it is not enough to manage the business supply chain effectively and efficiently as a disruption in business activities in remote points of a business’s value chain may have substantial adverse effect on it due to the bullwhip effect. The management of both the downstream and upstream stakeholders of your supply chain become essential if you are to have a stable supply chain. Thus, by extending your business network, you not only manage supplier and customer relationships, you also aim at monitoring and supporting de-risking their activities as it effects your business. In such a case, we look at ERM as managing an enterprise that comprises all the substantial enterprises that make up the value-chain of the business. Starting from the top, the board of directors is responsible for the oversight of ERM as well as reporting to stakeholders on the risk management strategy and risk issues. The board may decide to delegate specific aspects of its ERM duties to the audit or risk committee. The audit or risk committee reports to the board.
  • 56. 55 | P a g e Selection of risk assessment technique Rolls-Royce management was heavily focused on safety and compliance. They proposed all projects must attach a risk register that analyses the key risks and their potential consequences. The risk registers are a review of business performance. They established a structured approach to risk management, where risks were formally identified and recorded in a corporate register, which was viewed and updated on a regular basis, and mitigation plans were proposed for all significant risks. External assessment showed that the risk management process at Rolls-Royce more satisfied the Turnbull compliance requirements. (The Turnbull report was published by the Institute of Chartered Accountants in England and Wales on the implementation of the international control requirements of the combined code of corporate governance.) Risk appetite Judging again from the management philosophy and style, it is clear that they had, in more or less a qualitative measure, a medium appetite for risk as they were not in the habit of avoiding or accepting the total responsibility for very high risks (such as new product development in the aerospace industry) but rather shared such very high risks among risk relationship partners. Oversight by board of directors The director of operational risks oversaw all risks. The board of directors regularly reviewed the group’s exposuree Control Activities In such cases where the control activities are not stated, the control activities may either be the same as the response action or had been integrated into regular business activities.
  • 57. 56 | P a g e Information and Communication The effectiveness of their communication and the flow of information are evaluated from the “Assignment of responsibility and authority” part of the section titled Internal Environment. Monitoring Apart from the regular or periodic reviews, other monitoring activities that may be specific to the particular topic or risk in question may be stated. Where none is given in the analysis table, or not explicitly stated that there is none, it is taken that the regular ongoing monitoring is in place. Comparison of risk assessment techniques See the “Assignment of responsibility” part of the section titled Internal Environment. The company manages an array of risks with a mixture of its own management style and standard risk management techniques. A risk culture is evident in its management philosophy. With Rolls- Royce’s medium risk appetite, Rolls-Royce continues to strive in a volatile business environment. Simple calculation of the risk priorities following the scientific definition of risk: Risk priority number/index/weighted value=(likelihood of occurrence)x(severity of impact):
  • 58. 57 | P a g e 1-8 = Low priority (light green) 9-15 = Medium priority (yellow) 16-25 = High priority (red) The logic behind the weighting system used is based on the following: • The priority is set as low where either the likelihood of occurrence or the impact is below moderate (3) or is inversely related as one counter balances the other hypothetically. • The priority is set as medium where both likelihoods of occurrence and impact are above rare (2) but are both not major (4) as one counterbalances the other hypothetically and fall between low and high. • The priority is high where both the likelihood of occurrence and the impact is above or equal to major (4). It is observed that the three highest risks to Rolls-Royce, according to the prioritization exercise shown above, were foreign exchange transaction risk, new engines sales and engine parts sales. The one with the most priority was foreign exchange transaction risk.
  • 59. 58 | P a g e Risk assessment technique a. Internal environment of the firm. This brings into consideration the management philosophy, risk appetite, objectives and business operations. It was earlier observed that even though they both had a management philosophy, the risk appetite and their objectives, which exposed them to this risk, differ, as do their business operations. The latter means a different market environment, which implies different influential forces. External environment of the firm. This relates to the potential economic, social, technological (and so on) factors, as well as competitors that influence the firm’s decisions. In the case of Infosys, a large portion of its expenses is in Indian rupees and a depreciation of this currency is favourable to its bottom line. For Rolls-Royce, a substantial amount of its income — 38 percent of the U.K. turnover — was in U.S. dollars and, therefore, the company tried to minimize the impact.
  • 60. 59 | P a g e 5. Social Economics and environmental analysis Analysis of the environmental impact We focus on maintaining our drive to reduce the environmental impact of our business activities globally. This is part of our Group environmental strategy. Our Global HS&E policy sets out the commitments we have made. Our vision is to be known for the excellence in our HS&E performance in all our business activities, and our products. We are committed to full compliance with all relevant legal requirements and we continually monitor performance in all our businesses. We have global standards and guidance notes in place for identifying mandatory requirements and for the evaluation of legal compliance. This forms a key aspect of our HS&E management system framework that meets the requirements of the environmental management systems standard ISO 14001. We have global certification to international environmental management standard ISO 14001 across our manufacturing facilities. In 2015 we had one environmental incident. This involved a discharge to controlled waters from a site in the UK, related to a loss of containment follow a leak that subsequently entered the local water course. A comprehensive spill response operation minimized any impact on the local environment. In 2015 we had one environmental incident. This involved a discharge to controlled waters from a site in the UK, related to a loss of containment follow a leak that subsequently entered the local water course. A comprehensive spill response operation minimized any impact on the local environment. We continue to invest in improving the operational performance of our facilities, both production and office environments, and our process with the intent of building a better business. The investment will be increased public access to information and wide modern public services, and thus will improve the living conditions of the people. The functioning of the system will not be associated with the creation of a nuisance for residents and employees of the building and in the neighbourhood.
  • 61. 60 | P a g e Social and economic analysis Understanding our energy use helps us to identify inefficiencies and opportunities for improvement across our global business. Our energy use in 2015 was 112 MWh/£m. This represents a decrease of 3% compared to 2014. We have a global target to reduce our energy use in our operations and facilities by 30%, normalized by revenue, by 2020. This is base-lined on our 2014 performance and excludes product test and development. We continue to invest in energy efficient technology to reduce our energy consumption and cost. These include upgrading lighting systems, variable speed drives and voltage optimization. GREENHOUSE GAS EMISSIONS Investing in renewable energy sources and other opportunities to reduce our greenhouse gas (GHG) emissions reduces costs and mitigates the risks associated with energy price volatility. Our total GHG emissions for 2015, excluding product test and development, was 455 ktCO2e. This represents a 8% reduction compared to 2014. We have a global target to reduce the GHG emissions in our operations and facilities by 50%, absolute, by 2025. This is base-lined on our 2014 performance and excludes product test and development. We continue to drive energy efficiency and have developed a number of low carbon and renewable energy projects across our global facilities. These include tri-generation power systems, combined heat and power systems, and solar projects. Waste reduction At Rolls-Royce over 60 per cent of our waste is generated from four principal sources:  Metals  Chemical processing and cleaning wastes  Packaging  Foundry sand
  • 62. 61 | P a g e Social and Economic gain We have introduced a new higher-stretching target to reduce our total solid and liquid waste by 25 per cent by 2020. This is normalized by revenue, baseline at 2014. To support this target we have initiated a global waste improvement programmed to drive efficiencies and associated cost reductions. Whilst our main focus has been on our principal waste streams we are also working to embed a strong culture of waste management across the business. In our UK catering sites we have introduced re-usable coffee cups this year and have already seen a 25 per cent reduction in the use of disposal single-use coffee cups. RECYCLING AND ZERO WASTE TO LANDFILL We have made good progress with improving our solid waste recycling rate over the past 15 years and continue to explore further opportunities for improvement. This includes the introduction of Society culture Social institutions ( Economic , Political , Education , Religion ) Social inequality ( Class , Race , Gender) Groups Roles Socialisation Interaction Self
  • 63. 62 | P a g e new technology to improve against the waste hierarchy. We manage the closed loop recycling of high value metals through our well-established Revert program. We have made significant improvements especially to the recycling rate of our Asia-Pacific operations over the last year through diverting previously land filled and incinerated waste to suitable recyclers. Building on this success we have set a new global target to achieve zero waste to landfill by 2020, excluding hazardous waste. Conflict minerals Rolls-Royce is committed to creating a sustainable business. For us that means driving profitable growth whilst achieving a positive economic, social and environmental impact. We fully support the principles of regulations that promote socially responsible sourcing of minerals. We set high standards for the way we do business. This helps our customers know that we can be trusted to deliver excellence. We request our suppliers to only provide us with raw materials, components and subassemblies that are derived from responsibly-sourced minerals that can be certified in accordance with OECD guidelines. Suppliers must cascade these requirements through their own suppliers to ensure rigor throughout the supply chain. We recognize that determination of the original source of many of the materials used in our supply chain will be a difficult and lengthy process. Despite these challenges, we are committed to working with our suppliers and industrial partners to take all practical steps to meet customer requirements and assure supply chain compliance.
  • 64. 63 | P a g e 6. Conclusion As implementation of IT systems has become an important part of almost all the organisation which involves huge risk, funds to support and feasibility study gives the conclusion for an organisation to go ahead and implement or to follow the same old traditional system. In the current project we have completed the feasibility study of implementation of IOT in total care which gives the higher return on investment within few years after completion and selling of the project. We have studied the various compliances with the IT strategy implementation pertaining to certain policies specified by the standard organisation for this project. The future scope of the project is also set. The characteristics of the project pertaining to various parameters like social and economic, and project links for the IOT in Rolls Royce is also specified. The general objective of the project is also set depending upon product indicator and outcome indicator. As we have set the objectives to fulfil that the technical analysis is also performed like the functional requirement and comparing with the current IT system from which after investing how much extra revenue adds to our company is evaluated. Depending on the result of the outcome indicators we started preparation of the server room, preparation and implementation of new systems, compliances with rules in the field of IT project. The functioning of the IOT for total- care preparation begins to achieve this we used Prince-2 project management methodology for managing the entire project. We made an innovative business model according to our comforts and customer requirement. The financial analysis made some assumption and methodology by considering around 5 years. We calculated expenditure for the project in the years by considering 6% of the discounted present value. What will be? The future residual values for current project systems and operating income per flight is all calculated. As the investment of the IT requires huge investment we followed ISO 31000 for risk management. Finally what will be the impact of our project on the social economic and environmental analysis is also analysed. In the current project we will be getting the profit around 25% per flight after 6 years of the complete implementation of IOT in our total care project.
  • 65. 64 | P a g e ANNEXES: Annexe 1. 13 Scheduled by Gantt chart, Source: own Illustration
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