ERP in Higher Education
Running head: ERP IN HIGHER EDUCATION
ERP in Higher Education
David F. Rico
1
ERP in Higher Education
2
Abstract
This paper examines the use of enterprise resource planning (ERP)
solutions by institutes of higher education. In particular, this paper
examines the cost, technical, and customer risks of implementing ERP
solutions by universities. ERP is an information technology solution
that integrates enterprise functions such as planning, financials,
sales, purchasing, human resources, logistics, customer service, and
manufacturing. For universities, ERP is an information technology
solution that integrates and automates recruitment, admissions,
financial aid, student records, and most academic and administrative
services. By some estimates, 7.5 out of 10 or 75% of ERP projects
fail, giving rise to a large body of literature. Thus, this paper
examines three successful cases from small, medium, and large
universities, and numerous problematic ERP implementations. In doing
so, this paper lays a foundation for a general management framework
for implementing ERP solutions in institutes of higher education.
ERP in Higher Education
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ERP in Higher Education
This paper examines the use of enterprise resource planning (ERP)
by institutes of higher education. In this context, ERP refers to the
use of commercial solutions for both administrative and academic
purposes by universities. Typical administrative functions may include
human resources, accounting, payroll, and billing. Academic functions
include recruitment, admissions, registration, and all aspects of
student records.
The top reasons universities adopt ERP solutions are to replace
legacy systems, improve customer service, transform enterprise
processes, correct year 2000 problems, modernize computer systems,
improve administration, maintain competitiveness, increase operating
efficiency, and adhere to regulatory compliance (King, Kvavik, &
Voloudakis, 2002). The benefits of ERP solutions are that being part
of an ERP project is good for one’s career; the new systems offer
improved services for faculty, staff, and students; administrative,
academic, and student data are standardized; university data is
globally accessible over the Internet; and the new systems involve
less cost and risk than legacy systems (Kvavik, Katz, Beecher, Caruso,
King, Voludakis, & Williams, 2002).
A large body of literature implies that ERP solutions are
impossible to use, involve too much cost and technical risk, and
simply cannot be successfully used in a university environment. The
literature survey and case studies indicate otherwise, revealing vast
improvements in operating efficiencies. This paper establishes a
roadmap to a future beyond the use of mere ERP.
ERP in Higher Education
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Literature Review
ERP Definitions
ERP is a term for computer and software systems, which integrate
and automate major enterprise processes (see Table 1). Early ERP
applications were designed to integrate and automate manufacturing
systems. ERP now encompasses strategic planning, human resources,
customer relationship management, and supply chain management. ERP is
often synonymous with accounting systems that automate the general
ledger all the way through budgeting.
Table 1
Major Definitions of ERP
Source
http://www.scala.com
Definition
Business software, which includes
managing orders, inventory,
accounting, and logistics
http://www.softwareag.com
Application software that helps a
business manage its planning,
purchasing, inventory, suppliers,
customers, and order tracking
http://accountingsoftware
Enterprise accounting systems for
advisor.com
automating the general ledger,
accounts payable, accounts receivable,
payroll, inventory, job/project
costing, fixed assets, order entry,
and budgeting
ERP in Higher Education
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ERP Solutions
There are over 15 major vendors of ERP solutions, such as SAP,
Oracle, PeopleSoft, Best, Cerner, Geac, Intuit, Invensys, Lawson,
Mapics, Microsoft, Siemens AG, and Sungard. The top four ERP solution
providers are listed in Table 2. The revenue for these vendors ranges
from $79 billion to more than $1 trillion.
Table 2
Major Producers of ERP Solutions
Vendor
Oracle
Products
Contracts, e-business, financials, human resources,
learning, maintenance, manufacturing, marketing,
order, procurement, product lifecycle, project, sales,
service, and supply chain
PeopleSoft
Asset lifecycle, campus, customer relationship,
distribution, enterprise, financials, homebuilder,
human capital, manufacturing, project, self service,
service, storefront, supplier relationship, and supply
chain
SAP
Corporate services, customer relationship, e-commerce,
emissions, financials, human capital, mobile services,
operations, portfolio analysis, product definition,
product lifecycle, supplier relationship, supply
chain, and web services
SSA Global
Customer relationship, financials, human capital,
performance, product lifecycle, resource planning,
supplier relationship, and supply chain
ERP in Higher Education
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Successful ERP Examples
Georgetown University spent nearly $60 million on a campus wide
ERP initiative (Blitzbau & Hanson, 2001). Their award winning alumni
system now serves over 30,000 students. Financial aid and admissions
were successfully automated with PeopleSoft. Louisiana State
University implemented an award winning ERP system 1996, which now
serves over 45,000 students (Ethridge, Hadden, & Smith, 2000). Course
listings, libraries, human resources, e-mail, campus information,
public relations, registration, admissions, and other campus functions
were successfully implemented using Lotus Domino Notes. The University
of Nebraska-Lincoln successfully implemented an ERP system for
recruiting and admissions for it’s more than 22,000 students using
Talisma (Gaska, 2003). Gaska reports that the University of Houston
successfully implemented an ERP system in 1995 to serve 51,000
students using PeopleSoft for recruiting, admissions, registration,
student records, and administration. Gaska says Florida Southern
College successfully used ERP software from Jenzabar for an online
registration for its 2,500 students. Gartner estimates that 80% of
universities with more than 1,000 students will implement ERP systems
by 2005 (Rivard, 2002).
ERP Failures
The Meta Group reports that as many as 70% or 7 out of 10 ERP
projects end in failure, which is two and half times the industry
average (Lewis, 2001). A Computer Associates survey of 886 managers
reports 44% of ERP projects lose $1 million per year, 35% lose $5
million per year, and 21% lose $11 million per year (Dryden, 1998). A
ERP in Higher Education
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Deloitte and Touche survey of 164 professionals found that 62% of ERP
failures were due to people obstacles, 16% due to business process
issues, and 12% due to technology (Krasner, 2000). Unisource
experienced a $168 million loss, FoxMeyer Drug and Dow Chemical each
experienced $500 million losses, Dell Computer experienced a $115
million loss, and Nestle struggled with a $280 million ERP project,
along with Boeing, Apple Computer, and Allied Waste (Bingi, Sharma, &
Godla, 1999). ERP projects tend to exhibit common causes of failure as
shown in Table 3 (Umble & Umble, 2002). Other causes of ERP failures
include inexperienced analysts, long work weeks, poor communication,
and lack of employee involvement, incentives, and management support
(Barker & Frolick, 2003).
Table 3
Causes of ERP Failures
Category
Management
Type
Lack of executive commitment and leadership
Poor project management
Cultural
Trying to maintain the status quo
Inadequate education and training
Redundant and non value added processes
Scope
Unrealistic expectations
Poor estimation of scope and size
ERP implementation viewed as IT project
Technical
Lack of data/software quality and reliability
Hardware and software difficulties
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ERP Success Factors
The sudden rash of $500 million ERP failures gave rise to
numerous ERP studies from major universities. They all seemed to have
one thing in common, identify the critical success factors for ERP
implementations as shown in Table 4. These studies came from schools
such as Western Washington, Xavier, Indiana, Purdue, Rice, Cleveland
State, and California State University. Studies also came from the
Manchester Business School, Western Iowa Technical Community College,
University of California-Berkeley, Lee College, and University of
Akron. There was little overlap between individual success factors.
All 10 studies used employee, management, organization, system, and
team categories. The most frequently cited category was management and
the most frequently cited factor was business process reengineering.
Table 4
Critical Success Factors for ERP Implementations
Category
Employee
Management
Factor
Awareness
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
3
Involvement
3
Recognition
3
Retention
3
3
3
3
Selection
3
Training
3
3
3
3
Change
Commitment
3
Communicatio
n
Consultants
3
Cost Control
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
ERP in Higher Education
Category
Factor
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
3
Decisions
Preparation
3
3
3
3
3
3
Risk
3
Strategy
3
Support
3
3
3
3
3
Vision
3
Organization Benchmarking
3
BPR
3
3
3
3
3
3
3
Culture
3
3
Expectations
3
3
Conversion
3
3
3
Data
3
3
Hardware
3
Life Cycle
Realization
3
3
3
3
3
3
3
3
3
3
Requirements
3
3
Scope
Vendor
3
3
Legacy
Team
3
3
Project
System
9
3
3
3
3
3
3
Cooperation
3
3
Concurrent
3
3
3
Environment
Leadership
3
Testing
3
3
3
3
3
Note. (a) Bajwa, Garcia, and Mooney (2004); (b) Barker and Frolick (2003); (c) Bingi, Sharma, and
Godla (1999); (d) Hochstettler, McFarland, Martin, and Watters (1999); (e) Holland and Light
(1999); (f) Jaacks and Kurtz (1999); (g) Krasner (2000); (h) McCredie and Updegrove (1999); (i)
Olsen (2001); (j) Umble and Umble (2002); and (k) Swartz and Orgill (2001).
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ERP Benefits
A few universities, as shown in previous examples, have touted
their award winning ERP systems, esoteric ERP success factors, or
complex ERP management frameworks. However, other universities have
simply stated the benefits of their ERP systems in rather convincing
terms as shown in Table 5 (Savarese, 2003a). These universities claim
that they simply cannot revert to the old way of doing business or use
of legacy systems. Yet, other sources firmly deny the return on
investment of ERP systems or claim benefits are short lived (Menezes,
1999; Pendrous, 2003).
Table 5
Reported Benefits of ERP
Case
(a)
(b)
(c)
(d)
(e)
(f)
Vendor/Tool
Sungard Bi-Tech
Datatel Benefactor
Functions
Benefits
Recruiting, admissions, Reduced staffing,
financials, planning
enrollment growth
Admissions, student
Reduced staffing,
Colleague, WebAdvisor records, registration
accessibility
PeopleSoft;
Registration,
Reduced staffing,
Blackboard; Chronos
purchasing, budgeting
accessibility
Jenzabar CX;
Admissions, distance
Reduced staffing,
PeopleSoft
education, financial
paperwork reduction,
aid, registration
ease of use
Registration,
Data integrity,
accounting, planning
auditability
SCT Banner
Datatel Colleague,
Recruiting, admissions, Ubiquitous online
Benefactor
registration
interaction
Note. (a) Dominican University of California; (b) College of Southern Maryland; (c) Holy Cross;
(d) Columbia College Chicago; (e) Pima Community College; and (f) American University.
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ERP Measures
A study from the University of Pennsylvania and Drexel University
identified financial measures for ERP implementations in Fortune 1000
companies (Hitt, Wu, & Zhou, 2002). And, a study from California State
University identified operational measures for ERP implementations in
23 campuses with 400,000 students. The financial and operational
measures are shown in Table 6. Hitt, Wu, and Zhou showed that Fortune
1000 firms that implement ERP systems exhibit high levels of financial
performance. Hitt, Wu, and Zhou also indicate that Wall Street rewards
Fortune 1000 companies that implement ERP systems with high market
valuations. California State University developed a balanced scorecard
in response to state level congressional pressure to establish and
achieve progress towards a series of technology policy goals.
Table 6
Financial and Operational Measures for ERP
Category
Financial
Type
Labor productivity, return on assets, inventory
turnover, return on equity, profit margin, asset
turnover, accounts receivable turnover, debt to equity
ratio, market to book value ratio
Operational
Excellence in learning and teaching, quality of the
student experience, administrative productivity and
quality, personal productivity
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ERP Total Cost of Ownership
Several total cost of ownership (TCO) studies for ERP have
emerged (Meta Group, 2000; Silberberger, 2003; West, 2002). TCO is an
estimate of all of the costs associated with an ERP system. The Meta
Group provides some useful models as shown in Table 7.
Table 7
Total Cost of Ownership Models for ERP Platforms and Vendors
Platform
Windows NT
Sun Solaris
Vendor
Model
Oracle
3αβ x [(0.5 x 1.02E-2) + (0.5 x 2.90E-3)]
SAP
3αβ x [(0.5 x 1.20E-3) + (0.5 x 7.70E-4)]
Oracle
3αβ x [(0.5 x 2.80E-3) + (0.5 x 7.70E-4)]
SAP
3αβ x [(0.5 x 1.00E-3) + (0.5 x 2.85E-4)]
Note. α = Annualized corporate revenue ($/yr) and β = Number of deployed ERP modules.
Table 8 shows some estimates of TCO for ERP for hypothetical
scenarios using the TCO models from Table 7. The TCO models show that
costs are more expensive for Oracle and almost half as much for
Solaris. These formulas are useful for selecting platforms and ERP
vendors, as well as for project planning and control.
Table 8
Total Cost of Ownership for ERP Examples
Platform
Windows NT
Sun Solaris
Vendor
Revenue
Modules
TCO
Oracle
$250,000,000
5
$24,562,500
SAP
$250,000,000
5
$3,693,750
Oracle
$250,000,000
5
$10,687,500
SAP
$250,000,000
5
$2,409,375
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Case Studies
This section presents three detailed case studies of ERP projects
in a small, medium, and large university. Cases by Yakovlev (2002),
Solis (2003), and Sturdevant (1999) were used. Yakovlev described an
ERP project by the University of Wisconsin-Superior (UWS) with 2,700
students. Solis described an ERP project by the University of
Massachusetts (UMASS) with 70,000 students. And, Sturdevant described
an ERP project by the Wisconsin Technical College System (WTCS) with
460,000 students.
Table 9
ERP Projects in a Small, Medium, and Large University
University
Campuses
Cost
Analysts
Solution
2,700
1
$ 5 million
20
PeopleSoft
UMASS
70,000
5
$10 million
40
PeopleSoft
WTCS
460,000
16
$20 million
80
PeopleSoft
UWS
Students
Note. UWS costs estimated from available data (e.g., four teams of five analysts at $75,000 per
year for three years with $500,000 in vendor costs), UMASS costs were found on the resume of the
UMASS director of information technology, and WTCS costs were estimated by analogy to the scope
and size of the UMASS effort as well as available data (e.g., five campuses versus 11 campuses).
UWS provided a detailed synopsis of its ERP implementation. Costs
for UWS were estimated from available data. UMASS automated an ERP
system at its president’s office, a sixth site. Its costs came from a
reliable source. WTCS only implemented an ERP system at 11 of its 16
campuses and provided actual implementation costs at 50% completion.
Some of the common issues were overstated expectations, the need to
adapt PeopleSoft’s business rules, and the over allocation and
attrition among university employees.
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University of Wisconsin-Superior (UWS)
Organization. UWS is a small liberal arts college of 2,700
students. It is one of 13 schools in the University of Wisconsin.
Legacy. UWS used a Unisys mainframe for registration, grading,
billing, degree auditing, and direct lending. It was proprietary,
phone based, only used by faculty and staff, and didn’t support the
demand for web based services and reporting.
Project. UWS initiated a three year project from 1998 to 2000 to
replace the Unisys mainframe with an ERP system. It involved
approximately 20 people for three years at an estimated project cost
of $5 million.
Technology. UWS used PeopleSoft’s Admissions, Student Records,
Student Financials, and Financial Aid Modules. It also used FirstLogic
to format addresses to minimize the entry of redundant student
records.
Functions. UWS automated recruiting, admissions, schedules,
registration, grades, fees, payments, grants, loans, and lending.
Issues. PeopleSoft requires large scale business process
reengineering, PeopleSoft requires a decision to customize it for
legacy business rules or adapt its business rules, customized software
requires high maintenance costs, PeopleSoft’s data entry is
cumbersome, PeopleSoft is comprised of a large number of confusing
screens, PeopleSoft requires rigorous data cleansing, PeopleSoft
requires validation of information from a large number of reports,
PeopleSoft’s reports are not easily customizable, PeopleSoft requires
significant organizational change, it’s easy to insert but not remove
ERP in Higher Education
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redundant student records, PeopleSoft has no built in features for
identifying and resolving redundant student records, PeopleSoft
timestamps student records causing perceived redundancies and
operational issues, PeopleSoft requires the creation of large data
sets to initialize its database, some of the default PeopleSoft text
messages are vague and ambiguous, PeopleSoft customizations must be
thoroughly regression tested after vendor updates, universities must
establish a testing team for all vendor releases, universities must
maintain synchronized configuration management of all hardware assets,
staff and end user training is required for vendor releases, and ERP
projects increase employee attrition.
Benefits. PeopleSoft integrates student records, has a web based
interface, enforces all prerequisites during registration, provides
global access to all university data, results in fewer administrative
staff positions, empowers students to perform their own administrative
tasks, enables easier degree auditing and student advising, enables
faculty and staff to create their own customized reports, and
encourages a paperless environment.
Lessons. Plan for business process reengineering before
implementing PeopleSoft, be open minded and adapt PeopleSoft’s
business rules rather than customization, communicate effects of
significant organizational culture change, get familiar with
PeopleSoft’s report formats, design procedures to identify redundant
student records, institute cross training to minimize effects of
employee attrition, hire data entry personnel, and market the benefits
of PeopleSoft to faculty and staff.
ERP in Higher Education
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University of Massachusetts (UMASS)
Organization. UMASS is a medium sized university consisting of
70,000 students, 22,000 employees, and five campuses. It has an annual
$1.3 billion operating budget and $806 million payroll. It has
campuses in Amherst, Worcester, Lowell, Boston, and Dartmouth,
Massachusetts. It also had a sixth main location for the university
president’s office.
Legacy. UMASS had a mainframe operating at each of their five
campuses, which was used for human resources and financials. Each
campus had its own information technology staff and had experienced
three separate ERP failures throughout the 1990s. There was also a
sixth mainframe at the university president’s office, which was not at
one of the five main campuses.
Project. UMASS initiated a three year project from 2000 to 2003
to replace the separate mainframes with an ERP system. It involved
nearly 40 people for three years at cost of $10 million. Prior to the
initiation of the centralized ERP project, each UMASS campus had its
own project team, governance model, database requirements,
modifications, consultants, budgets, and timelines.
Technology. UWS used PeopleSoft’s Human Resources, Financials,
and Student Modules. It also used WebCT to help students with
communications, assignments, courses, and tracking.
Functions. UMASS automated and integrated human resources,
financials, and course management.
Issues. The oversight committee had long deliberations, not
enough time was spent planning the project, project resources were
ERP in Higher Education
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constantly in peril, end users weren’t involved, internal staff
positions were filled late in the project, the use of multiple
consulting firms was clumsy, the project staff didn’t stay focused,
the project team struggled with university governance, UMASS relied on
too many project heroes, UMASS held too many meetings, project plans
frequently weren’t in place, testing was too late and insufficient,
database implementation was problematic, end user expectations weren’t
properly managed, and support processes weren’t developed early
enough.
Benefits. The ERP project resulted in shared implementation and
maintenance costs, shared technology infrastructure, increased
coordination and communication between campuses, and standardization
of university business processes.
Lessons. Identify a list of issues, develop an oversight
committee, stay focused on the planned schedule and activities,
centralize the implementation team, get commitment from university
leadership, facilitate cooperation between campuses, obtain buy in
from university leadership and project team, communicate effectively
with consultants, use good decision making at project and executive
levels, rigorously track project issues, create a solid testing team,
implement effective change management, build the project team early,
use good project management discipline, develop an issue management
process, keep processes focused, use good project communications,
manage expectations early, get buy in at all levels, and create an
effective model for corporate governance and oversight.
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Wisconsin Technical College System (WTCS)
Organization. WTCS is a technical vocational college system
comprised of 460,000 students, 15,000 employees, and 16 campuses.
Legacy. WTCS primarily used IBM S/390 mainframes for payroll and
student records. The legacy systems were not year 2000 compliant and
maintenance of the custom software systems at the 16 colleges was
highly problematic. Redundancy, duplication, and waste were rampant
among the colleges. And, they could not keep up with frequently
changing state regulations and requirements.
Project. WTCS initiated a four year project from 1997 to 2001 to
replace 11 of 16 IBM S/390 mainframes with an ERP system. The 11
campuses were divided into four subprojects representing four vastly
different cultures as a risk mitigation strategy. The four subprojects
consisted of more than 80 people for four years at an estimated cost
of $20 million.
Technology. WTCS used PeopleSoft’s Human Resources, Financials,
and Student Administration Modules. The PeopleSoft modules were hosted
on Windows NT and Microsoft’s SQL Server. WTCS also used Cabletron’s
spectrum network management system.
Functions. WTCS automated and integrated accounting, human
resources, timekeeping, grading, registration, and student records
tailored to the business rules of the four subcultures.
Issues. Eleven of the campuses could not agree on a single set of
business rules, each of the subprojects were six to eight months
behind schedule halfway through implementation, one of the four groups
lost six months in contract negotiations with ERP consultants, one
ERP in Higher Education
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group lost key staff due to attrition, employees were asked to perform
their regular jobs as well as support the ERP project resulting in 70
hour work weeks, timekeeping formulas varied widely between
organizations and vendors, contract negotiations delayed project
implementation, PeopleSoft’s business rules were designed for four
year colleges versus technical vocational colleges with open
enrollment, and poor network performance completely demoralized the
staff.
Benefits. The ERP project resulted in web access to all student
records, replacement of custom legacy systems with off the shelf
solutions required less internal software maintenance effort, WTCS
reduced the number of disparate systems from eleven to four, and
payroll staff requirements were reduced by 50%.
Lessons. Benchmark potential ERP solutions against other
universities, develop platform selection guidelines, develop unique ERP
systems for major organizational subcultures, obtain buy in from key
stakeholders, develop an inclusive process for choosing ERP vendors, work
out a plan for evaluating vendors, solicit demonstrations from candidate
ERP vendors, sponsor multiple rounds of vendor demonstrations for down
selection, train supervisors to use the new ERP system and let them
conduct informal peer training, select qualified ERP consultants, develop
an incremental ERP module implementation plan, develop a data conversion
plan, allow some schedule relief if employees become over allocated,
identify key business rules that ERP vendors can and cannot support, hire
temporary workers for data entry, and develop network management plans to
optimize system performance.
ERP in Higher Education
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Strategy Analysis
Strategy Process. UWS, UMASS, and WTCS formed strategic planning
teams, scheduled team interactions, constructed planning scenarios,
formulated strategic visions, constructed strategic plans and
constructed operational plans described by Betz (2001). Decisions to
implement ERP systems at all three schools were driven by formal and
semi formal strategic planning teams consisting of the university’s
presidents, boards of trustees, or top level steering committees.
UMASS had the most formal process.
Strategy Implementation. UWS, UMASS, and WTCS followed the new
venture path, first mover path, dominant player path, and
diversification path described by Betz (2001). All three universities
modernized their infrastructures using state of the art platforms,
operating systems, commercial tools, enterprise systems, and web
services when these technologies first emerged. WTCS, UWS, and UMASS
began in 1997, 1998, and 2000, respectively.
Strategic Business Models. There is some evidence that UWS,
UMASS, and WTCS formulated alternative strategic models, constructed
strategy policy matrices, selected robust strategic models, and
formulated strategic policy matrices described by Betz (2001).
However, only UWS, the smallest of the schools implemented a formal
and rigorous process for formulating strategic business models to
evaluate alternative strategies.
Strategy Planning Scenarios. UWS, UMASS, and WTCS formed planning
scenario teams, divided them into societal teams, used external
experts to assist societal groups, prepared forecasts, presented
ERP in Higher Education
21
scenarios to executives, modified planning scenarios, extracted
strategic issues, and constructed strategic models described by Betz
(2001). All three schools formed cross functional teams to integrate
the views of their major functions. WTCS showed evidence of forming
strategy planning scenario and societal planning teams for each of
their four subcultures.
Strategic Management Implementation. UWS, UMASS, and WTCS
established strategic processes, trained personnel in strategic thinking,
linked strategic planning to annual budgeting, and implemented strategic
change described by Betz (2001). These were institutes of higher education
and were governed by state level regulations and oversight functions. So,
all three schools had processes for strategic management implementation
and linked their ERP implementations to annual budgeting.
Strategic Planning. UWS, UMASS, and WTCS chose strategic planning
formats, used concise strategic plans, used plans to monitor progress,
devised risk mitigation strategies, and developed change management
procedures described by Betz (2001). All three schools formed strategic
plans and rigorously tracked ERP implementation progress. UMASS, in
particular, had a formal risk management approach and formal change
management procedures.
Strategic Visioning. UWS, UMASS, and WTCS prepared and expressed
strategic statements, perceptions, commitment, preparation, and policies
described by Betz (2001). All three schools emphasized the importance of
strategy, perceptions, expectations, commitment, preparation, and
policies.
Market Change Anticipation. WTCS had formal processes for conducting
technology surveys, anticipating new capabilities, identifying emerging
ERP in Higher Education
22
and stable technologies, and developing technology change scenarios
described by Betz (2001).
Competition Change Anticipation. UWS and WTCS formally analyzed
organizational value chains, forecasted changes in value chains, analyzed
impacts of changes in value chains, used information technologies to
improve value chains, and planned future products and services described
by Betz (2001).
Strategic Operations Modeling. UWS knew the importance of performing
operational analyses, identifying strategic changes, and initiating change
initiatives described by Betz (2001).
Information Strategy. UWS and WTCS formed information strategy
teams, examined business process redesigns, and developed information
strategies described by Betz (2001). UWS seemed to be most effective at
information strategy, though WTCS had a more formalized information
strategy.
Diversification Strategy. UMASS was most effective at identifying
diversification needs, establishing core competency strategies, analyzing
portfolios, analyzing interactions at planning and operational levels,
managing strategic interactions, and managing strategic innovations
described by Betz (2001).
Knowledge Strategy. Neither UWS, UMASS, or WTCS created knowledge
paths for businesses, made research and development capabilities for
paths, and developed research plans described by Betz (2001). It is a
common phenomenon in the field of business process reengineering to
transform an organization one time, but not establish the mechanisms for
continuous transformation and renewal. This phenomenon was observed by
Pendrous (2003).
ERP in Higher Education
23
Future Directions
This section presents some future directions, topics for further
discussion, and areas for more research. They are all related to the
topic of ERP in institutes of higher education.
Courseware Comparisons. Online education has now emerged as the
preferred learning method of the 21st century. ERP in higher education
is no longer limited to human resources, financials, and student
records. These tools will be relegated to the role of mere market
commodities, rather than the premium priced market differentiators
they were in the mid 1990s (Pendrous, 2003). Courseware is the
strategic market differentiator of the 21st century and there are
hundreds of tools in the marketplace, which attest to the immaturity
of this niche in the ERP market. Dozens of scholarly courseware
studies now exist and they are ripe for consolidation into standard
industry framework.
Intellectual Property Rights. Intellectual property rights are
taking center stage, as online education becomes the preferred method
of learning in the 21st century (Ubell, 2001). That is, who owns the
intellectual property rights to online course content? Is it the
university, the instructor, or both? Once again, this is a fruitful
area for innovative standards.
Open Source Software and Standards. Several organizations have
emerged promoting the use of open software and standards for both
administrative and academic purposes (Dalziel, 2003). The most recent
of these is the Open Source Portfolio Initiative (OSPI). There is
already a body of software available to all universities. Testing the
ERP in Higher Education
24
viability of open source software for higher education is a good topic
for further research.
Outsourcing Models for Online Education. Outsourcing has emerged
as a major strategy for universities (McCord, 2002; Savarese, 2003b;
Zastrocky & Yanosky, 2002). First, web based commercial ERP tools
provided the ideal substitutes for homegrown university solutions.
Now, commercial outsourcing services may eliminate the necessity for
university information technology centers altogether (Kaye, 2002;
Burnham, 2001).
Costs, Benefits, and Effectiveness of Online Education. The
market for online education has grown to $5.4 billion, serving one
million full time students (Gallagher, 2003). Several major studies
have emerged attesting to qualitative and quantitative benefits of
online education (Allen & Seaman, 2003; Bishop & SchWeber, 2001;
DiSalvio, 2003; Estabrook, 2001; Wentling & Park, 2002). This research
area is by no means mature and is a good topic for the design of some
seminal works of scholarship.
Strategic Planning for Online Education. Strategic planning is
central to online education (Daniel, 1997; Hache, 1998). Daniel and
Hache believe strategic planning for information technology in
universities is in a state of crisis. There have been some good
studies that address issues of strategic planning (Levy & Beaulieu,
2003; Smallen & McCredie, 2003; Weir, 2004). A researcher could design
a management framework for setting up online software for commercially
successful firms, as well as small and disadvantaged universities,
technical vocational colleges, and commercial service providers.
ERP in Higher Education
25
Conclusion
This paper is an overview and survey of ERP in institutes of
higher education. It has a definition of ERP, examples of ERP
solutions, and examples ERP successes and failures. It also surveys
critical success factors for ERP implementation, common benefits and
measures of ERP, and examines a few ERP TCO Models.
Serving its primary purpose were three in depth case studies of
ERP implementations in a small, medium, and large university. In
particular, it examines ERP at the University of Wisconsin-Superior,
the University of Massachusetts, and the Wisconsin Technical College
System.
What we learned from these case studies is that ERP implementation
served several primary purposes. These objectives were to replace
expensive custom systems with off the shelf solutions, exploit the
accessibility advantage of the Internet, and integrate and automate a
single standardized solution. The cases focused on the technical details
of adapting and integrating ERP solutions into the university environment.
Little attention was placed on strategic planning, organizational culture,
and use of disciplined project management principles. Though these were
successful case studies, they contained evidence of the immense difficulty
of implementing ERP solutions.
They signal a progression in the evolution of information technology
in institutes of higher education. They indicate a focus on commercial
solutions, adaptation to the Internet, a bent toward online education, a
precursor to outsourcing, and a shift in focus toward the use of open
source courseware.
ERP in Higher Education
26
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