ERP: The Once and Future King of Campus Computing

• By Catherine Murphy
• 01/30/04

In higher education, ERPs are no longer optional. But many approaches exist to fit the individual campus.

ERP, or enterprise resource planning systems, are in place at many colleges and universities, and many more are considering going with ERP in the future. The promise of ERP is that it will integrate disconnected business operations such as student administration, human resources, and financial systems that have been previously handled by disparate legacy systems, while satisfying the need for real-time, on-demand information.

Using the Web, new ERP platforms can not only help streamline university business processes for school administrators, but also for students, faculty, and alumni. Using their own PCs, these constituents can access their own data, look up their own grades, register for classes, and apply for financial aid through the ERP system. Staff can apply for new positions and access their employee records without having to visit human resources.

Connecting the ERP system to a portal pushes the data and applications even closer to the user, eliminating many interim steps, shifting some of the work burden from the provider to the end user.

So far, ERP sounds like a great idea. Yet, converting to an ERP system is a bit like building a new house to replace an old bungalow. You know you need it, and you can imagine how much more functionality the new house will have, but the old house is paid for and hard to give up. Plus there’s bound to be disruption during the building process and of course some surprises along the way.

So the first principle of ERP is: expect the unexpected. According to William Shepard, director of applications integration and development for Cleveland State University, what people expect from an ERP implementation d'es not always match reality. “When you think of expectations and reality, remember these two words: reduction and increase,” says Shepard. “Everyone thinks they’ll save something–people, costs. The reality is that you usually don’t.”

Many schools don’t anticipate the costs they’ll incur in training and hiring staff. The transition to a new software platform may be a difficult adjustment for some employees. According to Dave Wasik, director, enterprise applications services for the University of Akron, “Unless you spend extra money on staffing, you won’t be able to take advantage of what ERP can do. Training is expensive, but it’s more expensive not to train.”

Ultimately, ERP changes the university’s entire approach to both handling information and serving users. “ERP forces you to change your fundamental approach to problem solving,” says Shepard. He also recommends providing support during the transition. “You have to transform your staff,” he says. “It may be helpful to provide some remedial training for them, so that they’re trained for the systems and software they’re going to have to handle.”

Keep in mind, also, the cost of outside consultants or partners. While these can be expensive, they can also be invaluable, says Dave Swartz, CIO for George Washington University. Swartz recommends spending the money to get the expertise you need. “Recognize that they [the vendors] are your partners. You have to choose a partner that will step up and knock out any problems that come up.”

Still, it’s the CIO or system manager who has to decide what roles to give to in-house staff and what to hire out. Project management is critical to successful implementation. Some institutions may feel more confident hiring an outside consultant with previous experience in implementing ERP systems. Other institutions may want to lead the project from within.

And don’t forget about the costs of hardware. The initial costs can be staggering, especially if new client hardware is involved. It’s helpful to plan this upfront with a strategy for adding and upgrading units as needed. Says Shepard, “You need to keep the PCs relatively current and maintain them, and that takes money and staff. We [at Cleveland State] implemented a PC buying plan and a four-year refresh program to replace the machines every four years.”

Can an ERP installation be done affordably? Yes, depending on your definition of affordable. Says Swartz, “There is an ERP system for every type of institution. For instance, there are some vanilla systems out there that are quite economical.”

Realistically, however, an investment in ERP is one of the most expensive IT investments a university can make. Overall costs in the tens of millions are typical. Wasik says, “The number of decisions are incredible. How much consulting do we need? How do we size processors correctly? These are all difficult decisions, but they have to be managed in order to manage costs.”

Despite the costs involved, Shepard warns not to spend too much time watching the bottom line. “This is a big project,” he says. “Don’t try to be a hero, delivering something cheaper and faster. Go to the board and ask them for the time, money, and flexibility you think you will need. Don’t expect to stay within a budget.”

For Swartz, who has implemented a few of these systems, planning is critical, as is expecting the costs to continue over several years. “Expect the maintenance costs and upgrade costs to be high. They are very expensive and often underestimated.”

Given that adopting ERP is such a daunting proposition, one might wonder if it’s necessary. Wouldn’t it be easier to simply avoid the whole thing? No way, says Swartz. “You have to do it to remain competitive. What’s going to happen to institutions that don’t move to ERP? They’ll lose market share. Students will look at the school and ask why they’re not offering what other schools have.”

The consensus is that the benefits to the institution outweigh the costs. “Once you get the basic infrastructure in place, ERP makes adding on third-party software much easier. It’s easy to bolt on a voice response system
or credit card management system,” says Shepard. “ERP forces you into a new architecture—client/server—and makes you do some relational housekeeping. That can benefit an organization enormously.”

George Washington University took advantage of the ability to build onto their ERP system by installing a new online housing system this year, which allows students to match themselves with a roommate and find a room on campus. The system, something like an online dating service, won an EDUCAUSE award for best new application.

What’s the future of ERP? Web-based platforms, says Shepard. “Almost all of the vendors are moving in the direction of pure Internet.”

Wasik foresees a shared service model for state institutions—multiple campuses in a statewide system sharing the same system for transactions, data warehousing, and metrics. “We don’t all have that many different approaches to human resources and other processes,” he says. “Why do we need so many different systems?”

The future involves service, portals, online access, and security, says Swartz, “In higher-education, we don’t often like to think of what we do as providing services. But we are providing services of all types. [ERP and portal technology] allow us to push more of the mundane aspects of service to the Web, where it will be available 24/7 and where we can track the status of a service request as it’s being addressed. This will all be transparent to the user. Along with call centers and help desks, we can manage 80 to 90 percent of the requests. The specialists [advisors, support staff, faculty] are now freed up to knock out the more serious, complex problems.”

Swartz also foresees a future in which ERP will replace paper documents with electronic ones. “There will be no more paper bills, contracts, and other such documents,” he says. “This is essential: in order to leverage the massive investment in ERP we have to get there [to online documents]. It’s amazing how much money you save by doing this. At GW we found enough ROI in just two offices to justify going to online contract management.”

Moving documents online will also be more secure, Swartz says. “The perceived need for security and privacy has grown exponentially. Online documents are much easier to manage and secure than hard copies. We can prevent the printing of online documents, control who has access to them, and block out SSNs. Paper copies are much harder to secure.”

Inevitably, corporate consolidation will force the merger of more of ERP providers, says Wasik. “The number of choices has already decreased. We are going to see fewer vendors, fewer options. This is economical on the one hand, although it’s less personalized.”