A Snapshot of ERP Adoption in Australian Universities

Transcription

1 A Snapshot of ERP Adoption in Australian Universities Jenine Beekhuyzen, Matt Goodwin, Jens Laurits Nielsen School of Computing and Information Technology, Griffith University Technology Building (TEN) Nathan Campus, QLD 4111, Australia Keywords: Enterprise Resource Planning, ERP, higher education, universities ERP was the major success story of the mid-1990s (Hillegersberg and Kumar 2000). When the largest of the commercial organisations had implemented ERP packages, the ERP vendors specifically targeted midsize and smaller companies with tailored products (Avarini et al. 2000). This included universities with a module tailored specifically to them, the Student Administration module. This paper focuses specifically on the uptake of ERP technology by Australian universities. ERP uptake in Australian universities is significant since more than 85% of Australian universities are adopting at least one module of an ERP system Australian universities are undergoing a change (Hoare 1996) as they respond to more students, declining public funding and increased government pressures to reform their structures, lower their costs and achieve greater administrative efficiency (Sarros and Winter 2001; Coaldrake 2001; Guthrie and Neumann 2001). However, Australia is not unique. Governments around the world have called for their universities to operate more effectively and efficiently. In response, universities began to implement ERP systems (Allen and Kern 2001) to replace old and outdated systems with more efficient systems for the university (Cornford and Pollock 2001; Orgill and Swartz 2000). The Australian Government has forced universities to act more like businesses, as the level of funding for Australian universities has dropped significantly in the past decade, thus causing universities go through a centralization phase that businesses have been using for decades (Siracusa 2002). Research Methodology Forty-two Australian universities (Hellaby 2000) were ed a questionnaire to establish what information system(s) the university was currently using, and if the university was involved in any enterprise-wide implementations. The was aimed at management in the IT department. 80% of universities responded to the and the non-responses were followed up by phone. The results were confirmed by contacting a second person at the university, either by phone or . The data was then re-confirmed via the vendor s web pages (PeopleSoft 2001; SAP 2000; JDEdwards 2000; Oracle 2000; Callista 1998) and by contacting the vendors directly (TechnologyOne 2001; BAAN 2002). The purpose of this study was not to explain what organisational conditions were influential in the adoption of ERP or what the necessary factors are for success, but rather to survey the rate of adoption of ERP in Australian higher education. The research was conducted during June 2001 to October Best of Breed ERP Systems Single vendor ERP software systems have been criticised for not meeting specific organisation and industry requirements. The alternative approach, Best of Breed (BoB),

2 integrates components of software from multiple standard package vendors, and in some cases custom components (Light et al. 2000). This allows organisations to attempt to mix and match modules in a way that best meets their needs (O'Leary 2000). The specific meaning of the term BoB is ambiguous in the ERP literature. The authors believe it is necessary for the term Best of Breed to be defined for this research. BoB, in the context of ERP, refers to the adoption of at least one enterprise module from an ERP vendor (and this may be coupled with other ERP modules or other software; customised or otherwise). Our research suggests that the adoption of even one enterprise module has an impact throughout the entire organisation, and this is reinforced by Beekhuyzen's study (2001). The impact of BoB implementations is similar to those associated with implementing an entire ERP system with a phased approach, which is the most common form of ERP implementation (Slater 1999). It is not clear which strategy represents the best infrastructure for the 21st century, and it is probably fair to say that no one strategy is the 'best for all contexts (Light et al. 2000). A mixture of single vendor and BoB approaches have been widely adopted by Australian universities. Successes, Failures and Costs As the ERP market matures, problems with system functionality and the implementation process have arisen. ERP systems have generally cost more than originally predicted and the levels of organisational trauma have caused severe difficulties (Light et al. 2000). There have been a number of successes and failures of ERP implementations in universities, although reported successes are few. Texan Christian University in the US had success with PeopleSoft; they reportedly registered more than 7500 students in 50 percent less time than usual via the web (HEUG 2000). The reports of failures or at the very least, high costs, are more evident. The cost of replacing the key administration software at the University of New South Wales (Australia) was AUD$40 million, which reportedly was double the original estimate (Lawnham 2001). In our research, problems have surfaced at Griffith University (Australia) with the Student administration system requesting two different formats of a student number to access different parts of the ERP system. This has resulted in incorrect information being delivered by the system to the user, for example, suggesting that the student is not enrolled and thus causing major confusion for the student. At a US college, the student administration module failed to handle financial aid information and the line outside the financial aid office was frequently up to 200 students long. PeopleSoft endeavored to fix the problems but it was speculated that this fix would put the school over budget by US$11 million (Stedman 1999). In a study of UK universities implementing ERP, the primary concern of staff was the centralisation of information and the shift of management power that occurred because of the implementation (Allen and Kern 2001). Findings Of the 42 universities surveyed, 35 indicated that they are implementing or have implemented at least one module of ERP software. Adopting one, two or three enterprise modules from multiple vendors is the preferred choice for 20 (48%) of the universities, while 16 (38%) are adopting all three modules from a single vendor. The modules being adopted are Human Resources, Financials and Student Administration. Six universities (14%) are not adopting any modules of an ERP system.

3 Alongside the major ERP vendors in Australia, Technology One s StudentOne and FinancialOne modules are widely adopted with the BoB approach. Callista (Student Administration) and Concept (HR) are also widely adopted in the BoB approach. ERP Implementations in Australian Universities Type of Implementation (%) 100% 80% 60% 40% 0% New South Wales Victoria Aust. Capital Territory Queensland 60% Western Australia 67% South Australia 100% 100% Northern Territory Tasmania Australian State/Territory Single Vendor Best of Breed (BoB) No Implementations Figure 1. ERP Implementations in Australian Universities The implication of these findings is that 86% of Australian universities have already taken the plunge into the costly and time-consuming venture of ERP implementation. ERP implementation in industry has a record of costly failures and implementations; it is not unheard of for $500 million to be wasted on a bad implementation (Davenport 1998). However the literature on ERP implementations in tertiary institutes, especially in Australia, is less abundant. The gap in the literature is the reason that this research (survey has been conducted. ERP Adoption in Australian Universities Full ERP Solution 38% BoB Approach 48% No ERP Adoption 14% Figure 2: Type of ERP Adoptions in Australian Universities Of the 86% of universities implementing ERP, all had an annual income over $15 million ($15 million being the lowest income). 47% implementing had an income over $200 million per year, the highest with an income of $578 million. 50% of the implementing universities had over 1000 staff, and 64% had over students (DEETYA 2001). One significant

4 exception to the trend of large universities implementing ERP is a Victorian university, which has an annual income of $588 million and is not implementing any ERP modules. Full Implementations By Vendor Oracle 6% J.D.Edwards 6% SAP 35% PeopleSoft 53% Figure 3: Full ERP Implementations by Vendor Based on multi-national and large global organisations, the ERP vendor SAP has the majority of the market share, with between 30 & 60% (O'Leary 2000). Interestingly, this study found that PeopleSoft was the single vendor ERP package that most Australian Universities adopted. Globally, PeopleSoft hold 6% of the commercial global market compared to 57% of the Australian university market. Conclusion This research has discussed the status of ERP s in Australian universities and it will benefit IS researchers and practitioners alike as it provides an increased awareness of the extent of the adoption of ERP technology by universities. As 86% of Australian universities are adopting at least one enterprise module, the significance of ERP adoption is a platform to continue the investigation into the issues surrounding this adoption by educational institutes. The evolution of ERP s from commercial organisations to universities has helped to identify some of the issues associated with the successes and failures of ERP implementations in universities. The failures discussed further validate the need for more research to assess the impacts of ERP on universities. In future research, the authors will discuss the strategic influences of ERP adoption by Australian universities. Due to changes imposed by the Australian Government and the money needed for implementation of an ERP, universities need to be operating more like a business than ever before, changing the way they gain competitive advantage in the marketplace. References Allen, D. and Kern, T. (2001) Enterprise Resource Planning Implementation: Stories of Power, Politics, and Resistance International Foundation of Information Processing (IFIP), Boise, Idaho. Avarini, A., Tagliavini, M., Pigni, F. and Sciuto, D. (2000) A Framework for Evaluating ERP Acquisition within SMEs, AIM International Conference, Montpellier, France. BAAN (2002) ERP Clients, BAAN, Personal Communication ( ). Beekhuyzen, J.P. (2001) Organisational Culture and Enterprise Resource Planning Systems Implementation Honours Dissertation, Brisbane, Australia: Griffith University. Callista (1998) Callista Clients : Callista Accessed: 20/03/02 [on-line]

5 Coaldrake, P. (2001) Effective University Structures for the21st Century Go8 HR/IR Conference, Adelaide, Australia. Cornford, J. and Pollock, N. (2001) Customising Industry Standard Computer Systems for Universities: ERP Systems and the University as an Unique Organisation Critical Management Studies, UMIST, England. Davenport, T.H. (1998) Putting the Enterprise in Enterprise System, Harvard Business Review 76: 4: pp DEETYA (2001) Statistics Relating to Higher Education Accessed 5/09/01 [on-line] Guthrie, J. and Neumann, R. (2001) The Corporatisation of Research in Australian Higher Education, Symposium 2001 on The University in the New Corporate World, University of South Australia, City East Campus, Adelaide, Australia. Hellaby, D. (2000) Unis vie for techno students The Australian Newspaper, Australia. HEUG, H.E.U.G. (2000) HEUG 2000 Conference Presentations: PeopleSoft. Hillegersberg, J. and Kumar, K. (2000) ERP Experience and Evolution, Communications of the ACM 43: 4: pp Hoare, D. (1996) Higher Education Management Review (the Hoare Report), Canberra. JDEdwards (2000) Services Overview: JDEdwards Accessed: 18/11/2001.[on-line] Lawnham, P. (2001) Software Costs Soar, The Australian Newspaper. Light, B. and Holland, C. (2000) Enterprise Resource Planning Systems: Impacts and Future Directions in Henderson, P. (ed.) Systems Engineering for Business Process Change, Springer, London. Light, B., Holland, C.P., Kelly, S. and Wills, K. (2000) Best of Breed IT Strategy: An Alternative To Enterprise Resource Planning Systems in Hansen, R., Bichler, M. and Mahrer, H. (eds.) 8th European Conference on Information Systems (ECIS), Vienna, Austria: Vienna University of Economics and Business. O'Leary, D. (2000) Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk, Cambridge: Cambridge University Press. Oracle (2000) Oracle Industries: Oracle. Accessed 12/03/2002 [on-line] Orgill, K. and Swartz, D. (2000) Higher Education ERP: Lessons Learned, Accessed: 6/09/2001, [on-line] PeopleSoft, I. (2001) Specific Industries: PeopleSoft, Inc, Accessed 7/03, 2002, [on-line] SAP (2000) Industry Adoption: SAP Inc, Accessed 8/03/2002, [on-line] Sarros, J. and Winter, R. (2001) Corporate Reforms to Australian Universities: Views from the Academic Heartland, Critical Management Studies, UMIST, England. Siracusa, J. (2002) Death of the Humanities, The Courier Mail Newspaper, Brisbane, Australia. Slater, D. (1999) An ERP Package for You... and You... and You... and Even You, CIO Magazine: February 15:. Stedman, C. (1999) ERP Problems Plague College; Cleveland State Can't Process Financial Aid Using PeopleSoft Applications, Computerworld. TechnologyOne (2001) Technology One Clients: Technology One, Personal Communication ( ). Acknowledgements The authors would like to thank Monarin Uervirojnangkoorn and Michelle Morley for their input into the research s direction and Jo-Anne Clark, Anita Greenhill and Vanessa Freke for proofreading. We would also like to thank the Liisa von Hellens, Sue Nielsen and Jenny Gasston in the School of CIT at Griffith for your ongoing help and support with our research.