Rolls-Royce EVMS Implementation using SAP�s ProjectSystems

Industry & Government Working Together forSuccessful EVMS Implementation on the

Joint Strike Fighter (JSF) Program

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Presenters

! Martin Eveleigh! Rolls-Royce North America! Focal Point for Rolls-Royce Defense

Europe EVMS Implementation! Based in GEAE Evendale, Cincinnati! JSF F120 Project Engineer

! Jim Henderson! NAVAIR EVMS Focal Point! Team Chief for EVMS Validation

! Luis C Contreras! AzTech International - Consultant to

Rolls-Royce during EVMS implementation

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What we�ll cover�

! Program Background! Why Rolls-Royce Sought DoD Validation! Team philosophy/approach! 3 Top Reasons for successful implementation! Review Process:

! Pre-Review (before any on-site visits)! On-Site Reviews! Post-Review

! System Description & Instructions! How SAP was integrated into the

documentation! SAP Challenges we overcame! 5-10 Minutes for Q&A! Contact information for future Q&A

Please hold yourquestions orwe�ll never getthrough this!

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Major Achievement for Rolls-Royce & UK/US Review Team

! First DoD EVMS Validation in the UK (firstoverseas, actually)

! Rolls-Royce is the largest SAP user:! for Aerospace & Defense (A&D)! Project Systems (PS) module! Computer Automated Time Sheets (CATS)

module! First EVMS Validation using SAP! Started validation process 12 months before

contract award! Completed validation process 6 months prior

to E&MD contract

Did we validateEVMS or SAP?

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Global Implementation Team

! Wealth of Experience from these Team Members:! Contractor: Rolls-Royce Defense (Europe)

! Rolls-Royce Defense North America - Indy! Consultants (AzTech International)

! Government Customers:! UK Ministry of Defence (MoD) SPS & DPA! JSF Programme Office! DoD:

! NAVAIR! DCMA

! Canada MHP! Commercial Customers:

! General Electric (GE)! Pratt & Whitney (PW)

Okay, we didn�talways agree,but�

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Spirit of Implementation

! Everyone recognized the importance! Government, GE, & Pratt Whitney were

partners / stakeholders in our success! Open to critiques, advice, & experience

Not another#@%&*audit�

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Rolls-Royce Team � Key Players

! John Whatley (JSF Project Executive)! Martin Eveleigh (JSF Programme Management / F120 Project

Engineer)! Alan Bye (IPM/SAP)! Dave Inman (JSF F120 Programme Manager / Assistant Chief

Engineer)! Nick Millar (F120 Fan Systems CAM)! Hamish Constable (F120 Transmission CAM)! Dave Hopkins (F120 Systems Engineering CAM)! Gary Selby (F120 Programme Management CAM / PBT)! Bob Ford (Ops Controller Budgets/Resources)! Martyn Brown (JSF Project Accountant)! Mike Bryant (Fan Systems Function Head RM)! Gary Davis (Fan Systems RM)! John Fitchett (JSF Procurement Executive)! Dave Luscombe (Procurement)! Bob Alcock (MRP Controller)! AzTech International � EVMS Consultants

! Luis C Contreras! Oscar Banda

And my boss saidI could do thisalone?!

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DoD EVMS Validation - Why did Rolls-Royce seek it?

! Integrated Programme Managementculture (processes, SAP tool, training,need) was already underway, but:! Validation is recognition of

achieving project management�Best Practice�

! Future contractual requirement

Thecontractrequired it.

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EVMS Validation � Why did Rolls-Royce seek it beforea contract (Phase 3b) required it?

! To be pro-active! To mitigate risks! Felt that starting implementation prior

to contract award would minimizeimpact to initial project planning

" Forced issue to make Phase 3acontract require full EVMScompliance

Thecontractrequired it.

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Rolls-Royce EVMS Implementation: 18 monthsfrom kick-off through Initial Compliance Review

Did someone saywe could do it in3 months?@!#

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Implementation Milestones

! 18 Months In Preparation - (F120 Phase 3a � after sevenmonths)

! 4 �DC� Summits! Jan 2000 � Kicked-off in Washington DC! Feb 2000 � Initial RR-Allison/AzTech International

involvement! May 2000 � JSF JPO/NAVAIR/DCMA Interim Progress Visit! Sep 2000 � JSF JPO/NAVAIR/DCMA/UK MoD/GE/P&W

Progress Assessment Visit (PAV)! Achieved DR Closure Agreement - January to April 2001! May 2001 � JSF JPO/NAVAIR/DCMA/UK MoD/GE/P&W �

Initial Compliance Review (ICR)! September 2001 - Formal Acceptance Letter

Isn�t thisoverkill?

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Why didn�t Rolls-Royce Self-Certify?

! Relatively new to EV; wanted outside,unbiased observations (yes, audit)

! Avoid inherent bias/subjective opinion! DoD compliance is a globally marketable

recognition! Potential scope/cost growth from third-party

consulting! Self-certification might be poorly regarded! Could not �proclaim� world-class

benchmarking unless a formal �validation�! Wanted people (CAMs, PMs, internal

functions) to face the impact of proving thesystem to drive the point home that EVMS isimportant and here to stay

Nobody saidwe could dothat!@#

Yeah, right. asif you couldhave even ifyou wanted to?

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Pre-Review Process

! Pre-Contract Award Meetings withGovernment/Customers

! Decided to use GE F120 Phase 3A! Wanted to get system in place with a

manageable project:! $5M contract! 5 CAMs! Period of Performance - 16th Oct 2000 to

15th Nov 2001! Six (6) Control Accounts! Mostly Engineering with minor Tooling &

Manufacture

Why go to all thattrouble for such atiny contract?

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Innovations / Implementation Tools

! �Stanmore� Directory! Set up a folder on the LAN with subfolders for

all Project data including:! MS Project files! MS Excel files! WBS Dictionary, SOW! Purchase Orders! Training Materials! System Description/Instructions

! Had laptops with the data available to ReviewTeam and to Project Team (PM, CAMs, PBT).

! Electronic System Description

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Stanmore Directory - F120 P3a

This data not available to �Primes�

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Review Process

! Before contract was in place! SAP (Project Systems Module and other modules

already in place)! Requirements Assessment: AzTech International &

Rolls-Royce North America (Allison) EV expertbrought in for gap analysis! Used validated system design (documentation)

from Rolls-Royce Allison (Indianapolis) as astarting point

! Decided to re-write around Rolls-RoyceDefense Europe organization and SAPfunctionality/processes

! Identified typically difficult areas (Accounting,MRP, Baseline Control, Scheduling)

! Identified potentially weak SAP areas

Why re-invent thewheel?

Had to replacethose #$*&Z�s with S�s!

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On-Site Review Process

! Advanced Visit! Progress Assessment Visit! Initial Compliance Evaluation

! Purchasing/Manufacturingdemonstrated from other programs;some pending for Production;mitigated.

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On-Site Review Process

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Standard On-Site Review (Old SchoolImplementation/Evaluation Tools Used):

! Storyboard � Data Traces, Exhibits, flow, bindersdon't work; Index to Storyboard andSD/Instructions; Links between index: easier topresent; Easier to review; Used to audit the SDpages, references, etc.

! CAM Notebooks - Used them; encouraged to usethem.

! CAM Storyboards! Interview preparation - no canned answers; did

pass out questions, then answers and went overthem with CAMs (all together or one-on-one).

! MS Access Database for generating ControlAccount & Activity (Work Package) Statistics;other data validation reports

Do CAMs everreally use theseNotebooks?

We�re nottelling youwhat to say,but�

Same oldsame old�

SAP can�tdo that!!??

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Post-Review (following May 2001 Review)

! Incorporated System Description /Instructions document changes

! Issued CD ROM with newdocumentation to GovernmentReview team members

! Internally, reviewed Lessons Learnedfrom implementation process

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Major Reasons for Success #1: Company Commitment

! Rolls-Royce Integrated Programme Management (IPM) Initiative:! Fostered corporate culture change (already started when

SAP was implemented�before EVMS requirement)! Rolls-Royce JSF Senior Management set a priority to meet the

future contract requirement! Senior Manager EVMS sponsorship! Key Players:

! EV focal point for implementation! Released from prior duties! Given budget, responsibility, & authority

! Tool (SAP) Expert! Hands-on PM! Dedicated CAMs who got involved! MRP, Finance, Purchasing, & Other Functions got involved! Outside EVMS Consultants

! Refresher SAP & EVMS training; One-on-one support! Rolls-Royce, top to bottom, saw the benefits! Rolls-Royce did not aim to just pass or to please

Futureprogrammerequired it.

Sometimeshad to begfor support.

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Rolls-Royce Vision forProgramme Management

! State of the art Programme Management! Electronic System - paperless! Integrated data - Customers, Partners, and

Suppliers! Universally recognized best practice! Create system that exceeds the JSF requirements! Works both for current & future programmes! Accreditation is secondary. Rolls-Royce seeks�

! A system that works for CAMs! A system that works for all programmes! Substantiated historical and projected data! An effective management tool

Paperless hasn�thappened yet�

On-goingprocess�

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Major Reasons for Success #2: Communication &Direction

! Expectations were clear! Requirements were understood! Map for success

! Communication Tools:! Teleconferences! Video conferences! Face-to-face Meetings! E-Mails! Document versions routed to all team

members on a regular basis! Direct e-mail and phone questions and

answers between Process Group leaders fromGovernment/Customer Review Team andRolls-Royce

Hundreds of e-mails. Timezone differenceswere a pain�

Memo to Bill Gates:MS Word DocumentCompare has bugs

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Major Reasons for Success #3: Government &Customer Approach

! Brought in experts as enablers, notdictators

! Process Group leaders had timelimits for reviewing and responding toinputs and DRs

! Quiet discussions rather thanshowdowns

How many timesdid we debatethe use of 50/50method?!!#@

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Contractor Lessons Learned

! Tell it like it is! Use the government. DoD Review teams are �free consultants�! Think: What are the Benefits to OUR Company?! Implementation Team members will not always be there after

implementation, so it is important to spell out as much as youcan.

! Review all standards documents! Ask other companies.! Ask other review team experts from the government agencies! It is a big job, but use it to your company's advantage! Respond to all DRs/Issues. Don't necessarily agree, but definitely

Respond.! Neither member can have oversized ego about what's RIGHT! Focus on high value, high impact Control Accounts! Share tools between CAMs

Free? What aboutinternal implementioneffort, system design,consulting,�

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Initial Compliance Review Team Goals

! Assess Rolls-Royce Bristol compliance with the Industry Guidelines! Management system design and operation

! Prepare evaluation report! Document compliance using the EVMIG Appendix B as a guide

! Present findings/recommendations to Rolls-Royce Bristol! Establish process for closure of outstanding issues and Acceptance

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All-expensepaid trip toEurope!

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Initial Compliance Review Team

Team Member Team Assignments Organization

Gayle Brooks Co-Review Director DCMALt. Col Paul Waugh Co-Review Director/Deputy PM JPOJim Henderson Team Leader NAVAIRKristen Kehrer Assistant Team Leader NAVAIRMonique Anneker Organizing Process Leader NAVAIRHarvey Johnson Organizing Process DCMADave Kester Scheduling Process Leader NAVAIRRocky Galletta Scheduling Process CA MHPBill Jackson Work/Budget Authorization Process Leader GETerry Bowd Work/Budget Authorization Process UK DPA SPSLorene Brown Work/Budget Authorization Process NAVAIRMike Lowry Accounting/Indirect Mgt Process Leader DCMAStephen Pears Accounting/Indirect Mgt Process UK DPA SPSJudith Yeaman Accounting/Indirect Mgt Process UK DPA SPSBruce Campbell Managerial Analysis Process Leader GEBev Deachin Managerial Analysis Process P&WDennis Chapman Mat�l Mgt/Change Inc. Process Leader NAVAIREd Swain Mat�l Mgt/Change Incorporation Process GEBarbara Dobbins Mat�l Mgt/Change Incorporation Process GEBob Gall Subcontract Management Process Leader P&WCDR Marion Eggenberger Subcontract Management Process DCMA

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Validation Process Benefits

! Provides the buyer:! Early identification of supplier management system issues and

risk reduction! Verification that the supplier�s management system meets the

intent of the EVMS guidelines! Confidence that the supplier has and uses effective internal

management control systems! Special emphasis on schedule networks and resource

management! Provides the supplier (contractor):

! A non-biased assessment of its management system! Recognition for achieving rigorous business disciplines

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Beats holdingyour thumb tothe sky...

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May 2001 Initial Compliance Evaluation

! Team Preparation:# Developed review planning schedule# Reviewed system description# Worked through Progress Assistance Visit (PAV) issues prior to

Initial Compliance Evaluation (ICE)# Developed team handbook with review methodology# Conducted team training# Cooperation between Government & Industry team was key

! Conducted on-site review:# Documented system description compliance# Presented story board system traces to review team# Evaluated compliance with CAM interviews, documentation

verification, and traces# Prepared evaluation report

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So much forglamourousEuropeanvacation...

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! Communication and co-operation between industry & governmentare keys to success

! Establish clear roles and responsibilities! Emphasis placed on documenting and following up on all findings! Set and revisit deadlines! Government PM Co-Review Director provided leadership and

program perspective! Build consensus

! Agree on the intent of EVMS Guidelines! Ensure review team has requisite expertise! Address all relevant management system characteristics! Maintain a positive approach

Government Lessons Learned

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Isn�t thiscommonsense ProjectManagement?

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System Description / Instructions

! System Description:! Process-oriented! Includes guidelines and grey areas - for

PMs PMO, to resolve future conflicts! 90% non-tool-specific! Addresses management system

characteristics (App. B of EVMIG)! Instructions:

! Roles & Responsibilities! Step-by-step, more detail, mechanics for

CAMs! Essential for new CAMs! More likely to change down the road! More tool-specific

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System Description / Instructions - Innovations

! Screen shots with SAP menu paths! Advanced Scheduling Methodologies

& Analysis! Resource Profiles (Curves)! Risk Management! Earned Value tools! Advanced Variance Analysis! MRP

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New & Improved Digitized System Description

! Home Page - �Web look-alike�! Links to System Description! Links to Instructions! Links to Exhibits! Links to Appendices! Links to DoD Reports! Links to Index! Colour-Coded Sections! User Friendly! Excellent Training/Reference Aid! Meets the goals set internally by Rolls-Royce! Held on �Stanmore� - F120 Team Usage! CD ROM

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Electronic EVMS �Home Page�

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Electronic EVMS �System Description�

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Electronic EVMS �Instructions�

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Electronic EVMS �Appendices�

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Electronic EVMS�DoD Reports�

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System Description / Instructions - Lessons Learned

! Define Table of Contents early on andinclude all subsystems in best order possible

! One document! Show integration and importance of System! All contracts! Consistency of best practices! Involve Ownership! Make it useful for new users (staff changes)! Do not be afraid to change it; it must and it

will as subsystems evolve and improve! Integrate the Tool (i.e., SAP) when it

enhances usability

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But will anyoneeven read thistome?!

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Expert Support

! Worked closely with Rolls-Royce EVMS Focal Point! AzTech International brought in past experience with

other industries, government agencies, and pastvalidations

! Initial Evaluation � Where we stood; Weak areas! Developed System Description / Instructions merging in

R-R and Review Team comments! Conducted EVMS Training tailored to SAP and other in-

house tools! Developed tools for work-rounds to SAP (Excel and

Access)! Worked one-on-one with Project Team (PM, CAMs,

PMO and other interviewees: Accounting, Finance, MRP,Purchasing, Contracts, etc.)

! Helped �negotiate� Discrepancy Report/Findingsresponses

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Consultingscope creep...

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SAP Innovations - Why did Rolls-Royce choose SAP?

! SAP (now at Version v4.0b) was implemented as part of the Rolls-Royce IPM before EVMSrequirement came in

! All planning, earned value, actual cost collection, and forecasting done at the Activity (workpackage) level

! Roles - PM, RM, CAM roles required within the tool! CATS - Cross-Application Time Sheet

! Each Activity is automatically a charge number! Each Activity can have labor, purchase orders, or manufacturing orders against it! CAMs can drill down to see cost details

! MRP - Material Requirements Planning! Ability to drill down to the manufacturing operations or the purchase order detail

! Project Systems! WBS down to Control Account levels! Activities (Work Packages) linked (cost and schedule integration)! Planning & Forecasting: Resource management & Resource Profile Curves! Earned Value

! Aimed to be able to do weekly �Earned Value�! Most costs accumulated daily/weekly! Earned value and forecasting can be done daily/weekly

One-stopshopping...

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Customer Reporting

SAPModules(Amongothers)

Rolls-Royce�s Earned Value Management System

Purchasing

MRP

ProjectSystems (PS)

Finance

CATS(Timesheets)

CostPerformanceReport (CPR)

Formats

Schedule export

Contract FundsStatus Report

(CFSR)

VarianceAnalysisReports(VARs)

Database forControl Account& Work Package

Statistics

EarnedValue

Worksheets

InitialPlanning

(iterations)

MS Excel

SAP

MS Project

MS Access

Legend:

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One-stopshopping?!

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Tool Discussion: SAP & Other Tools

! Not an "SAP" validation! SAP representatives had no participation in the review! 1700 legacy systems eliminated! PS, MRP, CATS & other integration easily outweighed

lack of reporting and other deficits! Some non-SAP form and reporting tools:

! Control Account Authorisations! MS Project Schedules for baseline input! Excel Variance Analysis Reports! Excel Earned Value Worksheets! Excel CPR Worksheets; DIDs: CPR, CFSR,

CCDR;Replanning; Adders (C&A, COM, Fee)! Excel Baseline Logs, RAM! Programme Change Requests

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No CPR?!!!

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Needed SAP Enhancements (Wish List)

! Required Reporting that most commercial EV applications easily do:! US DoD Reporting

! Cost Performance Report (CPR) Formats (Five of them)! 1 - WBS, 2 - Function, 3 - Baseline, 4 - Manpower Loading, 5 - Problem

Analysis! ANSI X.12 Export

! Variance Analysis Reports (VARs) at Control Account WBS (and even at Summary WBSElements)

! Variance Thresholds! Amount (Cost) and % for Current and Cum SV, CV and for VAC

! Easily Export Time-Phased (by A/P) BCWS, BCWP, ACWP, and ETC in Hours and Cost by WBS! Export to WinSight (A package made by C/S Solutions that the DoD Analysts use and often flow

down to contractors/subcontractors)! Easy Labour Rate & Usage Variance Analysis! Easy Material Price & Usage Variance Analysis! MRP Earned Value - automatically summarize % complete from underlying manufacturing

operations and purchase order details! Most EV applications do not do these, but it would be awesome if SAP could generate:

! Contract Funds Status Report (CFSR)! Contractor Cost Data Report (CCDR) - Requires summary by WBS and by Function and Cost

Element (e.g., Engineering, Manufacturing, Tooling, Labour vs. Material, etc.)! 1921, 1921-1, 1921-2, 1921-3

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Next releasewill do allthis�NOT!

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Cynic�s Challenges

! Can we maintain system discipline?! Can we keep project team trained?! Will all projects that require it adopt �full

EVMS�?! How will we incorporate SAP Version

Changes?! How will we conduct internal surveillance?! How can we work with the government and

customer to maintain and improve thesystem?

! What happens when best Team Membersmove on?

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Contact Information

! Martin Eveleigh (Rolls-Royce)! 513 243.3675! Martin.Eveleigh@ae.ge.com

! Jim Henderson (NAVAIR)! 301 342.2392! HendersonJH@navair.navy.mil

! Luis C Contreras (AzTech International)! 949 249.9349! AzTech@pobox.com! http://www.goAzTech.com