Good Money After Bad?
Louisiana State University (LA) CIO Brian D. Voss comments on higher education’s ERP investment future.
Forgive me for having an Albert Finney-as-Howard Beale moment, but I’m getting a good case of agita about some developments in IT in higher education related to the next phase of ERP.
Over the past several years, many institutions have spent tens upon tens of millions of dollars on ERP. And a lot of institutions have said things like, “We spent all this money, we’ve gotten these systems in and working, but in a lot of ways they are not delivering for us as well as the systems that they replaced…”
Brian D. Voss
The vendors are starting to respond to this by saying, “Well, that’s because you are getting only about 30 percent of the capability of these systems. If you would just make some ‘small additional investments’ you could improve their penetration, impact, and productivity.” Interestingly, a lot of the major ERP system vendors are now going into the service business – so as to sell institutions the services for those “small additional investments.” I suspect that “small” is a relative term, and that it still involves 7-figure dollar investments.
As vendors go into this new kind of enterprise, their standard marketing line is starting to form. It is that institutions have made big investments but are not getting everything out of them that they could. The vendors then offer to help institutions get more out of these investments. In my view, that’s code for, “pay us more money and here’s how.” I’m concerned that a lot of institutions, now that they’ve spent 30, 50, or even 100 million dollars on these systems think, “Whew! We’re done!” only to discover, that no, they’re not done. They’ve just made the down payment.
I also find it interesting that creeping into the pitch is the term “ROI” (return on investment). Meaning, to get return on that big investment, you must add more money. I have to ask: Where were the ROI discussions on the initial outlay for ERP? Did anyone really see a payback in terms of reduced IT or functional unit staffing, increased enrollments, more administrative efficiencies, or other facets that provided a return on those tens of millions of dollars in ERP investments? If anyone did, please point me toward the publication of those results. I must have missed them.
Given that I’ve not yet gone down the major-vended ERP path (nor do I plan to), some might wonder why I care. Here’s why: I see it as a threat to the role of the CIO in higher education. I see the potential that this continued and renewed draw of resources into our administrative systems will completely consume our centralized IT resources in the very near future, and that CIOs will no longer be able (nor trusted by their institution’s core constituents of faculty and students) to meet the broad spectrum of IT needs on campus.
Let me illustrate this with a brief anecdote. I recently heard a vendor talk about how their client had finished an ERP and made it operational, but wasn’t continuing to invest to make it more effective because they had moved on and were doing “other things.” To my ears, the tone behind that statement was, “Gosh! They’ve walked away from this, and they’re going to do something else.”
My response to that was, “Well, of course!” There are many other IT enablement efforts that must be advanced on our campuses, and there has been this tremendous focus for the last few years on implementing massive ERP systems. So naturally there should be a refocusing of energy into other areas. But alas, there is no money in these other areas for the major ERP vendors. Perhaps therein lies the root of their incredulous reaction to this redirection.
As CIOs, we’ve now got a host of other survival issues staring us in the face: IT security, data integrity, data breach prevention and management, and of course (my own personal favorite) disaster recovery and business continuity planning. Those “survival issues” and more non-ERP information systems work define a pretty full plate for any CIO (and their budgets). Not to mention advancing the use of IT in a broad array of teaching and learning, research, and student IT enablement action items.
I’m concerned that this new drive to “refocus back on ERP” (on top of the “survival issues”) will lead to CIOs becoming viewed as simply administrative computing types again – needing to place all of their emphasis on these topics to the exclusion of anything else.
The rallying cry a number of years ago was, “We’ve got to do ERP, and it’s going to be a huge investment in time, but we’re going to go do it and get ’er done.” And now the rallying cry is creeping toward, “Okay…we’ve done all that ERP, and look at the investment we’ve made! We can’t walk away from it. We have to invest more in it to get our money’s worth.”
I’m loathe to use the phrase throwing good money after bad, but I’m afraid that our profession is about to be so focused on the trees that we won’t see the forest. I’m concerned that the price of that will be the fracturing of IT on our campuses as those with interests in the broader array of IT enablement issues chafe at their CIOs not paying attention to these other, important areas. I am also concerned that this will lead to a dilution of the influence of the CIO and a return to more inefficient models of IT infrastructure management at our universities. I think this is already starting to happen. It’s not a good trend for CIOs – and I don’t believe it’s a good trend for higher education IT.
Brian D. Voss is CIO at Louisiana State University in Baton Rouge Louisiana.