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Managing the Enterprise on Limited Resources

How ERP is evolving in the new economy
University Business, Apr 2010

We've all heard the mantra: Do more with less. In the current economy, colleges and universities are continually being asked to be more productive and effective with ever-shrinking resources. A key to accomplishing that is to have a solid information system - an intergrated Enterprise Resource Planning (ERP) system that can help them toward that goal in numerous ways.

Datatel, Jenzabar, Oracle, SunGard HE, and other vendors offer solutions that help institutions of all sizes get control of the heart and soul of their operations: their data. The new generation of ERP systems often include Business Intelligence (BI) capabilities that enable administrators to consider "what if" scenarios as they plan budgets, allocate resources, and more.

Many institutions are also considering the relatively new option of hosted ERP, where the nuts and bolts of the system reside offsite. This can result in considerable cost savings to the school as the budget line items of equipment and maintenance costs are largely eliminated. At Carl Sandburg College (Ill.), for example, Datatel's Colleague ERP helps the school realize real dollar savings. According to CIO and Vice President of Administrative Services Samuel Sudhakar, the school annually saves about $100,000 in hardware costs, $175,000 on programming charges, and about $20,000 from automated communications to students and paperless purchase orders, requisitions, and payroll.

It allows you to offer more services with the people you have. Often, you can increase both accessibility and business intelligence with your existing staff numbers.

Smaller schools often find themselves with greater challenges than their larger counterparts, but they can still get control of the enterprise without breaking the bank.

We spoke informally with a group of higher education CIOs and vendors to find out how.

Carolyn Lightfoot (CIO, Lee College, Texas): For us, the main advantage has been being able to handle the federal and state reporting updates that we regularly get. There are so many updates and changes to things like financial aid and payroll that come from the federal government that we would need to have a dedicated person devote who knows how many man-hours searching and keeping up with those changes. The ERP does that for us by providing the updates and patches as they come in.

Kevin Leahy (CIO, Bellevue University, Neb.): Generally speaking, the need to manage using processes and the need to manage using valid data are where the world of higher ed and businesses are going. And our accreditors are demanding that we go down that path. For an organization, getting sound processes that have the right level of automation and scale and repeatability that doesn't depend on people doing those things without making errors is where the technical benefit from having that integrated system is going to come in.

Sam Burgio (VP sales & marketing, Jenzabar): One of the big areas we see is the evolution of new products geared toward functional areas. There are multiple levels in dashboards and BI to help colleges get control of their store of information. Every school wants to know about their student applications, for example. They want to know about their deposits, their budget, and so on. Higher ed institutions really want their ERP system to help them make decisions.

Michelle Reed (senior VP of marketing, SunGard HE): Colleges and universities are asked to be more accountable than ever today. As technologies have evolved, ERP systems - really the heart and soul of an institution - have added new capabilities to the software that get more power out of the information. BI modules expand the data way beyond the ERP, so institutions can look at trends in the data to help them understand what is happening at their institution. Some of the areas in which we're seeing these developments are relationship management and student lifecycles. Schools can track a student's performance, for example, and be alerted when a red flag goes up.

Lightfoot: It gave us standardization across many entities. Our objective was to have an integrated system that would streamline the flow of information across the campus. Our ERP [system] lets us manage our entire college - student records, financial aid, student financial information, [and] human resources, as well as payroll. Before that, we were in a 1980s COBALT system that, of course, was not very user-friendly. We also had several different systems throughout the campus. Every department maintained its own information. Our Oracle ERP gives us a unified solution to manage all that information in one centralized, integrated system.

Leveraging technologies will allow you to automate some of the things you do daily with your constituents. You are able to do more personalized one to one.

Leahy: We switched from our legacy system, which was really three different components, to a single integrated ERP. And, to be honest, the switch was not easy. You not only have to change the technology, but you also have to change people's attitudes. There were necessary changes in business processes and work habits that had to be made. But in the end, it's like they say in the credit card commercial -- moving to a disciplined change process that was thrust upon us in the context of switching over is priceless. It has fundamentally changed the way we maintain and support things.

Reed: One area we are investing in is alternate delivery models, and hosted solutions are a key to that. We announced the availability of our PowerCAMPUS Unified Digital Campus offering at EDUCAUSE last fall. It can be either onsite or hosted. The advantage to hosted is that institutions don't have to go out and procure the hardware themselves. We do all the behind-the-scenes installation and upgrade work. With that being handled by the vendor, it takes so much of the burden off the institution.

Burgio: I see a lot of schools that are hesitant to use a hosted ERP. I think it may be because of the concern of having their data sitting somewhere outside. There is a fear of not controlling your own data. A recent survey by the Campus Computing Project shows that even though people are becoming more accepting of hosted solutions, or SaaS, they are often in areas that, although mission-crucial, are not data-critical. They might use a hosted learning management system, or one for human resources and career services, but when it comes to student data, they are still reluctant to allow that data out into the world. I believe that will change, though.

Leahy: The physical security environment in our hosted world is far greater than anything we have on campus. Here, we basically have a server room with a locked door; but on the hosted side, there is round-the-clock security. From a data perspective, the hosted side is way more sensitive to security than we are as far as looking for any kind of penetration. They have to be that way, because they also serve banks and other businesses, as well. Their security is far stronger.

Burgio: You always hear software vendors say their product is going to streamline things and you'll be able to have fewer people. But that's not accurate. What it really does is it allows you to offer more services with the people you have. Often, you can increase both accessibility and business intelligence with your existing staff numbers. Granted, sometimes the people may not fit and you'll need to have different people, but I've never seen a case where, if you buy a system, you can have a third fewer people.

Lightfoot: We have found a cost savings basically in terms of productivity. Our people are more productive. Our students are satisfied with the fast registration we have in place because of this system. It has enabled our students, faculty, and staff to access their critical resources - their courses, class schedules, rosters, advising information, and so on much quicker. Students can go on and register for class, check their grades, and more, by themselves.

Leahy: There is definitely a cost advantage for us to being hosted. When we selected our ERP, we thought it would be about a break-even cost to our legacy system. We made our decision mostly based on operational support costs and staffing and so on. But we didn't think to include a lot of facility costs in that comparison, such as heat, power, and lighting. So there is a financial benefit involved. The other savings we see is in our lifecycle support. We have a couple systems today that are seven or eight years old that should have been retired, but the cost of replacing them is not in our budget. In the hosted world, we get continual upgrade and movement to more capable systems as part of that process.

The other big difference is a fundamental shift in the way our staff is being used. When we had our legacy system, most of our development staff was in maintenance and repair mode. Now we're almost completely out of that mode and looking at how to create value-adding projects for our university.

Lightfoot: Oh yes. Our recruiters use it a lot. When they go out into a community or travel elsewhere, they still have direct access to it so they can get to any information they may want to access. They can register new students right away. Once they are registered and added to our database, we can market to them with things like customized mailings based on their interests and so on.

Burgio: From a development standpoint, it also helps you keep your lists clean and up to date when you send out fundraising appeals. You don't have, say, seven people changing addresses, so you don't have bad addresses and returned mail. One person with access can update a file that will then update across the whole campus. You don't want to be sending out five pieces of mail to five different addresses because the information is not correct. You save money on printing and mailing as a result.

Leahy: It really depends on the kind of school. If you're at a small, traditional school and have something that works for you, and you don't think that is going to be changing much, then stick with what you have. The trade-off is there is no reasonable way you, on your own, would have the development resources to move you forward that would pace the resources that companies like Oracle or SunGard or other major players can bring.

Lightfoot: We have a lot of responsibility to maintain certain kinds of information, and it really helps having an ERP that is on top of providing those updates for us (for a fee of course). There are some small schools that would think they can do it all in-house, and they probably can, but in this era of accountability and this economic downturn, everything has to be looked at and reviewed and accounted for. Typically, small schools don't have a lot of staff and rely a lot on third-party sources to handle these different tasks. But if you are relying on a third party, there is a lot of room for error. I'd rather stick with one source and get the information I know I can rely on.

Burgio: In today's economy, you look at areas like retention management and business intelligence, things that have become so important on campus in making business decisions. The times are challenging colleges more than they ever have. We had a client that really got hit pretty hard by the economic crisis and they were forced to make decisions on layoffs. It took them six months to make these decisions because they didn't have the BI tools on hand. We were telling them they could have been less aggressive with what they needed to do because they could have done it quicker. They were hemorrhaging for six months and couldn't stop the bleeding. If they had got it under control in two months, they could have stopped the bleeding.

Reed: If you are looking for ways to differentiate yourself, leveraging technologies will really allow you to automate some of the things you do daily with your constituents. You are able to do more personalized one to one. If you look at many of these smaller schools, they're all about the personal and intimate relationship. But there are ways to leverage technology in your daily processes to free up staff to really devote their time and efforts to building those relationships with the students that you really want to attract to your institution.