Administrative Systems (ERP) Replacement Projects: The Vision vs. The Reality
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1 Administrative Systems (ERP) Replacement Projects: The Vision vs. The Reality Presented By: Charlie Moran Senior Partner Moran Technology Consulting, Inc. 2011
2 A Thought "There is a fine line between Vision and Hallucination" (Ram Charan, HBS Professor) Page 2 Moran Technology Consulting, Inc. 2011
3 Focus of this Document This document is intended to identify a common set of current administrative systems (ERP) replacement project issues that we have seen across the Higher Education industry. These issues seem to be independent of nations, cultures and institution type. Additionally, we ll discuss a set of risk mitigation strategies that we ve seen to be successful. Smaller institutions have all of these same challenges, but without the same financial and staff resources to address them as larger institutions. Page 3 Moran Technology Consulting, Inc. 2011
4 Moran Technology Consulting: What We Do. MTC offers a FULL RANGE of IT and Management Consulting Services: Strategic Services: - Strategic Planning and Governance - IT Assessment and Planning - Process Re-design / Transformation - Change Management - Organization Assessment/Re-Alignment Technology Acquisition / Deployment Services: - Requirements & RFP Development - Change Readiness Assessments - Applications Portfolio Assessment - ERP Implementation Planning - Independent Project Audits - Technical Contract Review Infrastructure Support Services: - Unified Communications Planning - Security Planning / Assessment - Business / Continuity Planning - Infrastructure upgrades IT Outsourcing Services: - Interim IT and Project Management - Management and Staff Outsourcing - Outsourcing Planning and Acquisition - Outsourcing Contract Reviews Page 4 Moran Technology Consulting, Inc. 2011
5 Moran Technology Consulting: Where We ve Done It. (a small subset) International School of Beijing Page 5 Moran Technology Consulting, Inc. 2011
6 Background: Two major areas of our consulting business: ERP Planning and ERP Independent Project Audits ERP Planning Projects Develop Requirements and RFP Change Readiness Assessment Business Process Re-engineering Project Management or Oversight Project Plan Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step Step Step 1Q 2Q 3Q 4Q 5Q 6Q ERP Independent Project Audits Broken / Run-away Project: Over-Budget / Over-Time Contractual arguments between vendor(s) and school Internal fights over project decisions Page 6 Moran Technology Consulting, Inc. 2011
7 Quick Definitions Different Approaches to Systems ERP (Enterprise Resource Planning): o Generically: it refers to the collection of administrative software that supports: Finance needs; Student Information needs; and HR/Payroll needs. o Technically: it refers to an integrated system supporting the administrative systems needs of a college/university by a single, integrated set of products Examples: SGHE Banner, Datatel Colleague, Oracle PeopleSoft, 3Rivers/CAMS, etc. Open Source/Community Source: Software developed and available free (for the license) to schools. Support (free and fee) for patches and new versions varies widely. (Think: Free Puppies) Examples: Kuali (Finance, Student, ), Moodle Cloud Computing/Web Hosting: Using a remote vendor data center across the Internet, where a commercial provider maintains the hardware and/or software for a fee. Relatively new and immature for higher education In this presentation, we ll use the generic definition of ERP Page 7 Moran Technology Consulting, Inc. 2011
8 Replacing major components of an institution s administrative systems can impact a wide range of people. Students Staff Alumni and Friends Faculty Community Researchers Business Partners The areas most often considered ERP components: Recruiting and Admissions Student Registration Student Curriculum Planning Student Financial Aid Student Accounts Receivable Student Graduation Alumni Support Faculty Planning Finance System Human Resources / Payroll Data Warehouse Imaging Grants & Contracts Mgmt./ Sponsored Programs Fundraising / Advancement / Development / Outreach Page 8 Moran Technology Consulting, Inc. 2011
9 Gartner s View of the Major Available Higher Education ERP Systems Interesting Note: Microsoft is becoming a major power in Higher Education ERP. MS SharePoint is becoming the portal tool at: o Datatel o SunGard HE o Campus Mgmt. MS Dynamics is taking over the Finance & HR at: o Three Rivers o Campus Mgmt. o PowerCampus Page 9 Moran Technology Consulting, Inc. 2011
10 Where will our money be spent? ERP Project Cost Buckets One-Time Costs o Vendor Implementation Consulting Costs ( ) o Vendor Software License ( ) o Hardware and Systems Software Costs ( ) Backfill (Mythical Functional User Backfill During Implementation) IT Staffing Implementation Work On-Going Operating Budget Costs (often not considered) Annual Software License and Maintenance Costs o IT Staffing Annual Support (post-implementation = think: forever ) Future Upgrade Costs (Systems and Consulting) Page 10 Moran Technology Consulting, Inc. 2011
11 Most common DESIRED benefits for a new ERP Vision Typical expectations of a new ERP system: Ability to provide new and improved innovative services to student, faculty, staff, alumni, parents, and other constituents Significantly improved management reporting capabilities Streamlined business processes with improved operational efficiencies More intuitive, browser-based user interface Integrated notification, alerting, and communication capabilities 24/7 real-time processing and batch-processing capabilities Robust self-service functionality (registration, bill payment, degree audit, ) Configurable approval workflow that can be set up based on user profile Potential operational cost savings Elimination of paper where logical Great goals. MANY obstacles to achieving them.. Page 11 Moran Technology Consulting, Inc. 2011
12 We found common themes from our ERP Independent Project Audits, as well as research from other ERP audits. Typical Problem Findings From Our ERP Audits: Poor / invisible executive support Poor / non-existent Project Management (both Vendors and Schools) Poor / non-existent stakeholder communications Minimal / non-existent software requirements used to select products No assessment / remediation plan for problems created by ERP change No framework to make decisions in a timely manner Confusing vendor promises with contractual obligations Not really reading vendor contracts Schools not owning the implementation No process streamlining / re-engineering Cutting training and testing to save money They didn t know how to do things right. Page 12 Moran Technology Consulting, Inc. 2011
13 Additionally, international institutions face other challenges to success. Typical Package Problems Facing International Institutions: Frequent lack of true multi-currency support Vendor support hours not aligning with local hours Older technology underlying many products Vendor support staff and materials may only be in English Limited/non-existent multi-language capabilities within product screens Remote vendor hosting of applications may not be reliable / affordable Institution s staff and financial resources may not match resource demands of some packages Page 13 Moran Technology Consulting, Inc. 2011
14 OU Housing Application Housing Confirmations are created SIS Admits receive Housing confirmation OU Precollege Application Admits invited to Precollege (Financial Aid Packaging) Student confirms Precolllege slot online Attend Precollege? No Precollege records No Show Registration is blocked Yes Admissions creates STUD record Student account is created in SIS Students meet with Advisors First DARS report is created Precollege fee is applied to account Student registers for classes Financial Aid is Disbursed The Challenge: Avoiding These Problems The Solution: Think Holistically about major changes Successful Change Involves Focusing on the People, Processes and Technology Addressed Primarily by Organizational Change Management People Addressed Primarily by Business Process Redesign Process Ohio University Admissions from Recruiting to Final Admit Technology Addressed Primarily by Software Package People and process issues are often overlooked in planning ERP projects. Page 14 Moran Technology Consulting, Inc. 2011
15 Based on our research, we developed a set of ERP Critical Success Factors that can significantly improve success. Higher Education IT Project - Critical Success Factors: Strong and demonstrated Executive Leadership and support Clearly defined application requirements Broad stakeholder participation Functional Executives own / drive the project Focus on minimizing package changes by re-engineering processes Clear Project Governance and Decision-Making Framework Aggressive focus on understanding and tracking project costs / benefits Active and on-going communications planning Strong Project Management resources and processes Clear project roles and responsibilities Strong focus on managing change Critical Success Factors: Those few areas where things must go just right for our efforts to succeed Page 15 Moran Technology Consulting, Inc. 2011
16 Best Practice: Why does everyone say no mods! Modern vendro ERP systems are very CONFIGURABLE, reducing the need for modifications (also called customizations ). Every software modification is expensive to build (onetime ) and expensive to maintain (requires more permanent IT staff to maintain ). Replacing old systems is the best time to get rid of antiquated business processes it may be 20+ years until you get this chance again. Customization Level One-Time and Forever Support Costs ( & IT Staff) Page 16 Moran Technology Consulting, Inc. 2011
17 How do you make decisions efficiently and quickly. Universities and Colleges can become more effective at making decisions if they understand and break their decision-making bottlenecks: Effective and timely decisions means reduced cost for major IT projects Decision Inhibitors: More than one person thinks they have final decision authority No one knows who has final decision authority No one is accountable for crucial decisions Too many people have veto power for decisions No tie-breaking escalation person No time limits on discussions 100% Consensus is required Decision Enablers: Clearly defined and communicated roles and responsibilities for each type of decision The final decision maker is identified and accountable before discussion begins There is a clearly defined tie-breaking escalation process and person Empower staff Decision dates are set and met Consensus is desired not required NOTE: These concepts are modeled on the 2006 Harvard Business Review article Who has the D? Page 17 Moran Technology Consulting, Inc. 2011
18 Who will make decisions for YOUR ERP Project??? DECISION-MAKING ROLES Project Sponsor Overall Project Leadership / Escalation Point Decider Final Decision Maker / Tie-Breaker / Authority to Decide Recommenders Make Proposals / Have Veto Power Reviewers Review Proposed Decisions / Make Case For Change Advisors Consulted on Decision / Provide input on alternatives Performers Responsible / Accountable to Execute Decisions Page 18 Moran Technology Consulting, Inc. 2011
19 What is Business Process Re-engineering for ERP? Business process reengineering / redesign (BPR) seeks to streamline, improve service quality and performance of administrative and student services in preparation for a new ERP project. BPR goals may vary by institution, but often include the following: Reducing the number of steps in a process Increase the use of new technology tools and self-service opportunities Reducing (eliminating!) duplicate data entry tasks Increasing stakeholder satisfaction with the service Reducing the time and effort needed to complete tasks Increasing the accuracy and quality of activities Utilize a new package without major software changes OU Housing Application Housing Confirmations are created SIS Admits receive Housing confirmation OU Precollege Application Admits invited to Precollege (Financial Aid Packaging) Ohio University Admissions from Recruiting to Final Admit Student confirms Precolllege slot online Attend Precollege? No Precollege records No Show Registration is blocked Yes Admissions creates STUD record Student account is created in SIS Students meet with Advisors First DARS report is created Precollege fee is applied to account Student registers for classes Financial Aid is Disbursed Page 19 Moran Technology Consulting, Inc. 2011
20 How will you manage your ERP, AFTER you go-live???? You may not believe it, but someday the ERP project will end. WHEN it does. How do you want to manage the systems in your new ERP world? Deploying new version functionality Tweaking configuration business rules Turn on things you skipped the first time. Creating new reports to better understand what s happening across the school Etc Page 20 Moran Technology Consulting, Inc. 2011
21 Wrap-up.??? Questions and Answers??? Page 21 Moran Technology Consulting, Inc. 2011
22 Contact: Moran Technology Consulting Charlie Moran Senior Partner US Toll-free Voice & Fax Page 22 Moran Technology Consulting, Inc. 2011
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