theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Miami for IFS Unleashed 2022. Below is the transcription of an interview with the CIO of IFS for aerospace and defense, Scott Camarotti and the VP of Digital Systems at Rolls-Royce, Nick Ward. Enjoy!
theCube: Hey everyone. Welcome back to Miami, Miami Beach. Specifically, not a bad location to have a conference. Lisa Martin here with the Cube Live IFS Unleashed. We’re going to be having a great conversation next about servitization, moments of service, Rolls-Royce is here, as is the CIO of IFS for aerospace and defense, Scott Camarotti. Nick Ward joins us as well, the VP of Digital Systems at Rolls-Royce. Guys, excited to have you on the program and welcome back.
Nick Ward: Thank you very much. Nice to be back.
theCube: It’s been three years since the last IFS show. I love how’s Scott I was talking with Darren earlier today and I said, didn’t it used to be IFS world? And he said, “yes.” And I said, I love the name. I would love to, to unpack that with your Chief Marketing Officer because it, there’s a lot of power behind Unleashed. A lot of companies do such and such world or accelerate, but we’re talking about unleashing the power of the technology to help customers deliver those moments of service. Love it. So Scott, start us off here. Talk about servitization, that’s a relatively new term to me.
Scott Camarotti: Sure.
theCube: So help me understand what it means, because IFS is a pioneer in this sense.
Scott Camarotti: We are. So one of the things that IFS is always trying to do is to try to find a way to help our customers to realize a moment of service. And that moment of service is really when they found the ability to delight their customers. And when we look at the way in which we’re trying to drive those business outcomes for our customers, servitization seems to be at the core of it. So whether it’s the ability for a company to use a product, a service, or an outcome, they’re driving servitization in a way where they’re shaping their business., they’re orchestrating their customers and their people and their assets behind a value chain that helps them to provide a delightful experience for their customers. And with IFS being focused on lifecycle asset management, we no longer have customers that have to choose from best of suite or best of breed. They can actually have both with IFS. And that’s something we’re really excited to provide to our customers and more excited for our customers to realize that value with their customers, their partners along the way.
theCube: You’ve mentioned customer delight and it’s a term that, we all use it, right? But there’s so much power and capabilities and metrics behind that phrase, customer delight, which we’ll unpack. Nick bringing you into the conversation, talk to us a little bit about what your role is at Rolls-Royce. My first thought when I saw you was oh, the fancy cars, but we’re talking about aerospace and the fans, so give us a little bit of a history.
Nick Ward: Okay. So yes, we don’t make cars is the first point. So we are, we are power, we do power as a service. So we are most well known, I guess for large aircraft, airliners. You know, if you’ve flown here to Miami, there’s probably a 50, 50 chance you’ve flown on a Rod Royce powered aircraft. Our market segment is what we call wide bodied aircraft where you go on, there’s two aisles, so the larger section of the market. And we, provide power, so we provide the engines, but more importantly, we’ve been a servitization company, a service company for at least two decades. We have a service relationship we call total care. And the whole idea of total care is, yes, I have my engine out, it’s on my aircraft, but I take care of it, I make sure it’s available to fly when you need to fly it. And all of the things that have to come together to make that happen, it’s a service company.
theCube: Service company. Talk to me a little bit about, and I want to get got your perspective as well, but the relationship that Rolls-Royce and IFS have this is a little bit unique.
Scott Camarotti: Well, I can start, but I think Nick’s going to be better served to tell us about that as our customer. Nick and I actually started this journey about four years ago. And what we did was, is we were working closely with our perspective customer Rolls-Royce, identified what they were looking for as a desired business outcome. And then we found a way through the technology and the software that we provide to all of our enterprise customers globally, to find a solution that actually helped to provide a, an outcome not only to Rolls-Royce, but also to our collective downstream customers, commercial operators around the globe. So that’s where we started the journey and we’re continuing our discussions around other solutions, but that’s how we started and it’s been an incredible partnership. We’re so happy and proud to have Nick as a customer and advocate of all things IFS and I’ll let him kind of continue from his point of view how he sees the partnership and the relationship.
Nick Ward: I thank you Scott. I think we’ve always, we’ve valued the kind of relationship that we have because I think IFS has always got Rose Royce in terms of strategic direction, what do we try to do? I said, we’re a service company, you know, we are, we have to have a service relationship with our customers, our airlines. To have a service relationship, you have to be able to connect to your service customer. And IFS is a big part of how we connect for data. That’s how do we understand what the airline is doing with the engines, but it’s also how we return data back into the airline. So we’re got a very close integrated relation between us, our airlines, through a bridge that IFS create through the maintenance product.
theCube: Got it.
Nick Ward: So it works really well.
Scott Camarotti: I think I’d make one other point. One of the things that we’ve always focused on is quantifiable business value. The only way a partnership like this could possibly work is if we have a desired business outcome, but if we’re providing value, so the value work that we did in conjunction with Rolls-Royce and really identifying that helped to support the business case that allowed this partnership to really begin and flourish. So I’d be remiss if I didn’t mention that business value element that’s really cored everything we do and all the conversations that Nick and I have.
theCube: Well it’s all about outcomes?
Nick Ward: Absolutely.
theCube: It has to be about outcomes.
Scott Camarotti: It is, it has to be about–
Nick Ward: It’s about moments of service. that’s why we’re here, right? So perhaps a moment of service for Rolls-Royce is every time you’re a passenger, you’re going through the terminal, you expect your aircraft to be there ready, waiting for you to get on and depart on time. And our moment of service is every aircraft takes off on time, every time. We live, when we die by the quality of that statement, how well we live up to that statement. I think I checked this morning, there’s something like, 600 aircraft in the sky right now with Rose Royce power, carrying passengers. All of those passengers have relied on that moment of service happening regularly like clockwork every single time, you don’t get any forgiveness for a delay, you get very little forgiveness for a cancellation that has to happen. And then so many things have to come together for that to happen. Those 600 aircraft, that’s maybe 200,000 people right now in the sky.
theCube: Wow.
Nick Ward: Those 200,000 people are trying to connect, they’re trying to connect with friends, they’re trying to connect with loved ones, family, colleagues, whatever the purpose is of that trip, it’s really important to them and we just have to make sure that that happens for us. We’ve had something like a million flights so far this year, 300 million people relying on that moment of service happening. So I really resonate with, the language that Scott uses about the importance of sort that focal point and when does it all come together? It comes together when as a passenger, I get on the plane and it goes and I get no issues.
theCube: Right. Well people don’t tolerate fragmented experiences anymore.
Nick Ward: No.
theCube: I think one of the things that was in short supply during the pandemic was patience and tolerance. Not sure how much if that’s going to come back.
Nick Ward: Right.
theCube: But those integrated connected experiences, as you described so eloquently, Nick. Those are table stakes for the customers, but also the brands behind them because if customers are unhappy, the churn rates go way up and you see that reflected in obviously the success of the business so what you guys are doing together this seems to be quite powerful. Now then when you were on the Cube with us three years ago in Boston at IFS back then. You first introduced the intelligent engine and the Blue Data thread, let’s talk about the intelligent engine just give our audience a refresher of what that actually entails.
Nick Ward: So perhaps if we just step one step back from that just to understand how this fits in. So Rolls-Royce is a service organization we talked about that. What that means is we take a lot of the, the risk and the uncertainty away from our airline customers on the availability, the costs and maintenance effort associated with, having a chat engine. These are incredibly complicated and complex and sophisticated pieces of equipment. The most expensive, most sophisticated pieces of an aircraft. Managing that is difficult and every airline does not want to have to focus on that, they want to focus on being able to get the passenger on the air craft fly it, look after the airframe. So our role in that is to take that risk away, is to manage those engines, look after their health, look after their life, make sure they’re available to fly whenever they need to fly.
So, for us to understand that, we then have to have data, we have to understand the state of every engine, where it is, the health of the engine, the life of that engine, what do we need to do next to that engine? And we can’t do that unless we have data. And that data flows into a digital platform, the intelligent engine, which is our cloud based ai, big data, all of the IoT, all of the big buzzwords are there, right? So the data flows into that lets us run the models, It lets us understand, I can see something maybe it’s a small issue, but if I leave it alone, it’ll become a bigger issue And maybe that will cause disruption further down the line. So we need to understand that we need to preempt it. So preemptive predictive maintenance is a big part of the intelligent engine, but it’s more than just that. It’s also, we can understand how that engine is being flown, we can understand is it having a really intense flight? Is it having a more benign, gentle flight?
theCube: Wow. In real time?
Nick Ward: After the flight, typically after the flight. But what that means is, we can then understand actually, we can keep that engine on the wing longer then you might otherwise have to do, if you have no data, you have to be conservative, safety rules, everything.
theCube: Sure.
Nick Ward: So data allows you to say, actually I’m being overly conservative in this space. I can get more flying miles, flying hours from my product by extending the interval between maintenance and intelligent engine has a large part to play in us justifying that we’re able to do that. And then the final part that it does is eventually the engine is going to have to come off for maintenance. These things fly 5 million miles between overhauls, imagine you try to do that in your family car, it doesn’t happen. It’s incredibly sophisticated thing can fly 5 million miles and then we take it off for a major overhaul. But there are thousands of these engines in the fleet, we have to understand which engine is going to come off when, for what reason, and prepare our maintenance network to then receive the engine and deal with it and get it back to the customer. So the intelligent engine has a massive part to play in understanding the maintenance demand that the flying fleet is then creating.
theCube: Wow, that’s fascinating. And so you talked about that three years ago, what’s next for that? I imagine there’s only more evolution that’s going to happen.
Nick Ward: It keeps growing. It keeps growing. It’s driven by the data. The more data we have, the more that we can do with that. I think as well that, you know, one of the big places that we’ve gone is you can do as much predictive analytics as you like, there’s a lot of people we’ll talk about doing predictive analytics, but if you don’t do the hard yards of turning predictive analytics into outcome?
theCube: Yeah.
Nick Ward: Then what did you get? You got a bit of smart advice. So we take that maintenance demand, we then have to understand how that drives the orchestration and the management of all the parts, the people, the work scope definition, the allocating an engine into a maintenance slot, exactly when it’s going to go and what are we going to do to, how do we control and manage our inventory to make sure that engine is going to go through. How do we then actually execute the work inside our overhaul shops? How do we get that engine back and integrate our logistics process. So the intelligent engine is, if you like, the shiny front end of a process, it’s all the buzzwords, but actually the hard yards behind the scene is just as if not more important to get right. And again, this is why I really like the moment of service concept because without that, the moment of service doesn’t happen. The engine’s not there, the power wasn’t there, The field service maintenance guy wasn’t there to go fix it.
theCube: And brands are affected.
Nick Ward: An aircraft on the ground earns no revenue for anybody.
theCube: No.
Nick Ward: It’s, a cost. It’s a big sink of cost.
theCube: It is. Absolutely. You’re helping–
Nick Ward: Aircraft only earn engines only earn when they fly.
theCube: Yeah.
Nick Ward: Absolutely.
theCube: And what a fascinating, the intelligent engine. Scott, talk a little bit about, we talking about power, we can’t not talk about sustainability.
Scott Camarotti: Yes.
theCube: I understand that IFS has a new Inaugural Awards Program that Rolls-Royce was a recipient of the Change for Good Sustainability Awards, congratulations, one.
Nick Ward: Thank you very much.
theCube: And two, Scott, talk to me a little bit about the Change for Good Program sustainability program. What types of organizations across the industries of expertise are you looking for and why does Rolls-Royce really highlight what a winner embodies?
Scott Camarotti: So since Darren has joined IFS as the CEO, he’s had a lot of intentional areas that we focused on and sustainability has been one that’s at the top of the list. IFS has a US ambassador, Lewis P. who’s our Chief Sustainability Officer, and he helps us to provide worldwide coverage of the efforts around sustainability. So it’s not just about IFS’s ability to become a more sustainable organization, but it’s the solutions that IFS’s is putting together in the five verticals that we focus on that can help those organizations achieve a level of sustainability for their downstream customers, their partners, and for their enterprises themselves. So when we look at, you know, the social ability for us to be more conscientious about leaving the world a better place or trying to do our best to leave the world not as bad as we came into it, sustainability is a real focus for us. And, you know, the way in which we can support an organization like Rolls-Royce and Nick will obviously share those areas of focus from Rolls-Royce, it’s a perfect fit. And congratulations again for the award.
Nick Ward: Thank you.
Scott Camarotti: We’re so excited to, have shared that with you, we have some other customers that have achieved it across different categories, but it’s an area of current and continuous focus for IFS.
theCube: Nick, talk to us, take us out here as our last question is the focus on sustainability at Rolls-Royce, talk to us a little bit about that and what some of the major efforts are that you’ve got underway?
Nick Ward: I think, you know, very similar as Scott taught there, the focus within Rolls-Royce as a strategic group level is really high. Aviation particularly, I mean we’re an engineering company, we’re a power company, power inherently consumes natural resources, it tends to generate climate affecting outcomes. But at the same time, we are an innovative organization and if anybody is going to help solve climate challenges, it’s going be organizations like Rolls-Royce we’re are able to bring different technologies into the market. So we have a responsibility to manage and optimize the behavior of our existing product suite. But we also have a vested interest in trying to move aviation on into the next phase.
We talk about sustainable aviation, aviation has to earn the right to exist, people have choices. We’ve come out of COVID, people are used to doing Zoom and not flying. People are used to doing things when they don’t necessarily get on an aircraft and do something. The aviation business always has to earn the right from the public to exist. And increasingly people will make choices about how they fly, when they fly, how far they fly based on the sustainability footprint. So it’s really important to us to help both our customers, operate the aircraft in as sustainable and climate friendly way as we can. It’s really important to find those balance points between the cost of an operation and it’s the impact of an operation. If you go all over and say, I am going to be net, well, not even net to, but zero carbon by almost inference that means I’m not going to operate, you have to operate to get to an outcome.
But how do I do that? Well I manage my cost, I manage the profitability of the organization doing it. So it has to be financially sustainable, it has to be sustainable for the people operating within it, it has to be sustainable for the planet, right? So we do that in lots of different ways in small places and in big places so small things we do is we help the operator understand if you change your flight profile, you’ll generate fewer emissions, you may avoid controls if you flying a different way, maybe you create trails, you’ll lose less fuel while you’re doing that so it’s cost effective for you. There was always a balance point there between the wear and tear on the engine versus the environmental impact and you find that optimum place. One of the first things we started doing with, with Scott is we have a way that we life our engine components.
And one of the very simple outcomes of that is using that data, the blue data for connection to the customer. If we can see, effectively see inside the engine about how well it’s wearing and we can extend those maintenance intervals as we talked about, what that eventually does is it reduces the need to take the engine off, ship it around the world. Probably on a great big 747 or maybe year or two ago on an Anson off four big engines flying a long distance trek, shipping our engine to an overhaul facility. We’re avoiding something like 200 of those shop visit overhauls a year. So every year that’s 200 flights there and back again, which don’t happen.
theCube: Right.
Nick Ward: Collectively that’s around about 15,000 automobile equivalent emissions just don’t happen. So simple things we can do just starts to have accumulative effect.
theCube: Right. Simple things that you’re doing that, that have a huge impact. We could talk for so much longer on sustainability, I’m sure we’re out of time, but I can see why Rolls-Royce was, was the winner of this inaugural award, congratulations.
Scott Camarotti: Well deserved.
theCube: Well deserved.
Scott Camarotti: I think it’s well deserved.
theCube: So interesting to hear about the intelligent engine, so you’re going to have to come back hopefully we’ll be here next year and we can hear more of the evolution ’cause I have a feeling there’s never a dull moment in what you’re doing.
Nick Ward: It’s never a dull moment, there’s never an end point.
theCube: No. (laughing)
Nick Ward: We keep going.
theCube: Oh, Scott and Nick, thank you so much for joining me on the program today.
Scott Camarotti: Thank you, Lisa.
theCube: It’s great to have you talk, what’s going on at IFS and the partnership with Rolls-Royce.
Scott Camarotti: Again Nick, thank you for your continued support in the partnership.
Nick Ward: Thank you, Scott.
Scott Camarotti: We appreciate it.
Nick Ward: Likewise, thank you.
theCube: Kudos all around. All right for my guests, I’m Lisa Martin, you’re watching a the Cube live from Miami, We’re at IFS Unleashed, we’ll be back shortly after a break with our next guests, so stick around. (soft music)
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