Higher Education ERP: Lessons Learned

1. Higher Education ERP:Lessons Learned Ken Orgill West Virginia University Dave Swartz George Washington University Track 6 – Enterprise Resource Planning

2. What is ERP? Benefits of ERP First Steps Costs of ERP The ERP Contract Limit Customizations Use of Consultants Project Management Creating the single team atmosphere Recruitment and Retention Issues Morale of the Team Key Functional Issues Key Technical Issues What About Small Schools? The Future of ERP Overview Track 6 – Enterprise Resource Planning

3. What is ERP? Needs Assessment • An ERP or Enterprise Resource Planning system integrates information and business processes to enable information entered once to be shared throughout the organization. • ERP had its origins in manufacturing and production planning. In the mid-90’s it was extended to other back-office functions such as financial management and human resource management. • More recently these systems have addressed applications specific to higher education such as student systems and grants management. Phased Implementation Software Selection ERP Project Process Reengineering Training Conference Room Pilot Common examples include SAP, PeopleSoft, Banner and Oracle. Track 6 – Enterprise Resource Planning

4. Improve access to information Improve workflow and efficiency Improve controls and program alerts Process reengineering -- update old processes Foundation for new processes, such as e-procurement, with significant ROI Buyer or Management Approval Cycle Requisitioning Purchase Order User Product Selection Supplier Fulfillment Route to Recipient Ship Product Receiving Accounts Payable General Ledger Financial Reconciliation What are the Benefits of ERP? Track 6 – Enterprise Resource Planning

5. First Steps: Well Begun is Half Done • Start with an evaluation of needs and requirements -- this is useful not only as a guide to the project, but also as a gauge to the success of the project • Compare possible solutions to see which one best fits your needs and produces fewer gaps. More gaps may result in more costly customizations. • Best of breed vs. integrated solutions • Big bang vs. phased implementation Track 6 – Enterprise Resource Planning

6. What are the Costs of ERP? • Direct costs only represent a fraction of the total costs of ERP • Direct costs include hardware, software, and people on the project -- the largest category is personnel costs • Indirect costs include the costs of back-filling positions, increasing salaries and the total life cycle costs of the ERP -- maintenance, ongoing production, and upgrades. Track 6 – Enterprise Resource Planning

7. The ERP Contract • The prime vendor -- “one butt to kick” -- and leave it to the experts! However, there are some trade-offs. • Fixed cost vs. time and materials with or without a cap • Build flexibility into the contract to accommodate changing technology • Check references • Be skeptical of vendor promises -- get it in writing! Track 6 – Enterprise Resource Planning

8. Limit Customizations and Scope • To change or not to change your old business practice? • Are you paving cowpaths or improving your business process? • Are customizations really needed? Have you factored in the total costs of the mod? • Watch out for scope creep and hidden customizations Track 6 – Enterprise Resource Planning

9. Use of Consultants • Many different roles for consultants: staff project, backfill office staff, audit project, serve as prime contractor, project management, etc. • Too many consultants relative to university personnel may limit knowledge transfer • Too few consultants may limit ERP expertise on the project • Right of refusal over consultants -- watch out for the green oversold consultant “in training” Track 6 – Enterprise Resource Planning

10. ERP Project Management • One of the most important decisions on an ERP is the selection of the project manager • The PM should be a professional manager with experience with project management, loyal to the university, with both functional and technical knowledge. • Use a standard methodology to provide guidance and structure to the project • In addition, to the project manager, there should be functional and technical managers. • Individual functional teams, such as grants management, should have a designated lead. • Use of committees and executive steering group Track 6 – Enterprise Resource Planning

11. Creating the “single team” atmosphere • Avoiding us versus them • Partnership between functional and technical teams • The partnership between senior management -- e.g., the CIO and the CFO. • Partnerships with consultants -- teams composed of consultants and university personnel working side by side • Partnerships with users Track 6 – Enterprise Resource Planning

12. Recruitment and Retention Issues • Bonuses for “life of project” efforts • Find and nurture people early • Back-filling Staff • Staffing matrix • Knowledge transfer and mentoring • Stress management • Team building Track 6 – Enterprise Resource Planning

13. Morale of the Team • ERP projects can put a strain on personnel • Schedule down times and events to help boost morale • Keep an eye out for individuals on the edge • Celebrate the achievement of milestones and recognize individual and team contributions Track 6 – Enterprise Resource Planning

14. Needs analysis Process engineering Back-filling staffs Training Recruiting and retaining staff Conference room pilot (CRP) Reporting Gaps analysis Setting expectations Obtaining user buy-in and acceptance Validation of data and systems Communications Process documentation Audit of data and system Key Functional Issues Track 6 – Enterprise Resource Planning

15. Sizing the system Recruiting the talent Holding the line on modifications Conversion of data Interfaces Report development Change management and problem tracking Desktop requirements Network issues Distributed versus centralized production Help Desk and ongoing support Planned upgrades and revisions Production budgets Key Technical Issues Track 6 – Enterprise Resource Planning

16. What About Small Schools? • Go vanilla, if possible. • Your mantra – no mods, no mods … • Contain the scope creep. • Minimize the amount of data to be converted. • Look toward consortiums. • Check into “Quick Start” programs Track 6 – Enterprise Resource Planning

17. Post-Implementation Issues • Most problems end up being process issues and incorrect usage of the system • Gearing up for round two – the upgrade path to the next ERP release Track 6 – Enterprise Resource Planning