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The Answers Higher Ed Needs Before Selecting an ERP System in the Cloud

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by David Hemingson
Co-authored by Kirk Teal and Dawn Stoyanoff

Even the most picturesque academic setting and the noblest of scholarly goals are dependent on acomplex network of back-office operations. In fact, the long-term viability of colleges and universities is tightly tied to the processes and systems that help run the “business” of education. This is why institutions of higher education must continually find opportunities to increase operational efficiency, improve responsiveness to constituencies and reallocate resources to their core mission.

Research conducted by ISG and IAOP indicates that the benefits of cloud-based computing may be luring post-secondary schools to take a closer look at their enterprise solutions – including critical systems for student administration, grants administration, human resources, payroll, procurement and financials. Cloud-based models such as software-as-a-service (SaaS) provide value, the research indicates, by reducing IT costs, delivering agility and scalability and offering continuous updates. 

After a period of relative consistency in the functionality of enterprise solutions, higher education is ready to take advantage of the benefits that corporate enterprises have been experiencing for some time. Cloud solution providers are redirecting their investment dollars almost exclusively to SaaS and similar cloud solutions in anticipation of a steep rise in new SaaS implementation projects in the coming years. One provider we talked to is preparing for as many as 300 to 400 new projects over the next three years alone. This kind of focused investment in the development of a single, configurable solution drives rapid evolution – and there are fewer and fewer reasons for higher education institutions to ignore the as-a-service model.

In a cloud environment, the solution provider operates and maintains the enterprise solution, allowing the institution to configure the implementation to fit its needs. Because the provider applies maintenance frequently, the institution is relieved of the stress of applying an annual release. And the provider is encouraged to achieve performance standards designed to meet the goals of the institution.

For higher ed leaders considering a move to the cloud, some questions are in order:

  • Is your institution ready for this type of change?
  • Does the solution offer the benefits the institution hopes to achieve?
  • How much control does your organization need to have over the solution?
  • Does the financing work with your institution’s budgeting process?
  • Can your institution handle the pace of organizational change that comes along with moving to the cloud?

Once an institution assesses its readiness and is on the path to selecting a new enterprise solution, it will face another series of questions:

  • What is the maturity of the solution?
  • What is the total cost of ownership (TCO)?
  • How will your institution manage the accelerating change, including educating leadership and the community on the benefits of cloud solutions?
  • How will it create a process-based approach to defining its requirements, evaluating providers and making the right selection?

Implementation of cloud-based solutions can be notably faster than the on-premises solutions higher ed institutions are accustomed to. This means pre-implementation planning takes on greater significance. Delayed decision-making is among the factors most likely to delay implementation and increase project costs. For instance, when a university system faces a decision about how to implement “standard” practices, will all institutions within that system – even if they have different missions – adopt the same practices, or will different groups within the institution adopt practices standard to that group? Many of the strategic decisions – and those regarding how a solution will be implemented – are independent of the solution or software. Making these decisions prior to starting the implementation reduces the risk of burning resources as the implementation team awaits.

Toward this same goal, we find that separating the solution request for proposal (RFP) from the implementation RFP allows an institution to create a better ongoing relationship with the implementation provider because the institution enters the relationship having already made key decisions. It is better prepared to specify its implementation support requirements, make available internal project staff who are aligned and prepared to respond to provider queries and reduce the likelihood of project delays associated with prolonged decision-making.

ISG has guided major university systems – including the 15-component University of Arkansas System and the 21-member Texas A&M University System – in the selection of cloud-based enterprise systems. We will be exploring this topic further on Monday, July 31, at 2pm at the NACUBO Annual Conference in Minneapolis. Join us to discuss how to bring diverse campuses and administrations together to make a joint, broadly supported enterprise solution decision and begin the change management process.  

About the authors

David leads Higher Education and Academic Medical Centers practice.  He has provided professional services to 200+ university systems, colleges, research universities and academic medical centers. He specializes in complex, enterprise-wide transformation projects that encompass strategic planning and implementation of leading practices often in conjunction with selection and implementation of enterprise systems.  He has led teams in evaluating university and AMC organizational structures, processes, and technologies, and identifying and implementing operational improvement, service enhancement, and cost reduction/containment initiatives, including shared services.  Prior to joining ISG, he was with KPMG, BearingPoint and PwC.

Kirk has more than 28 years of experience working with public sector organizations, including 23 years of experience in the design, development, implementation, customization and support of financial and procurement applications. For much of that time, he has focused his expertise on general ledger, accounts payable, budgetary control, budget preparation, grant and project accounting, purchasing, inventory control and asset management. Prior to joining ISG, Kirk served as a manager for a Big 5 accounting and consulting firm. He is a Project Management Professional (PMP) and is also a Certified Public Accountant in the State of Texas. Kirk also has spoken at the Government Finance Officers Association (GFOA), the Conference of Urban Counties (CUC) and the National Association of State Auditors Controllers and Treasurers (NASACT).

Dr. Dawn Stoyanoff is an experienced and committed professional with more than 20 years of experience working with colleges, universities, university systems and academic medical centers to identify opportunities to improve core missions and enhance business efficiencies. She leverages her experience with public and private institutions and university systems to guide enterprise-wide transformations that align operations with strategic goals and objectives, enhance learning and the student experience, foster innovation and productive research, evaluate impacts of new and emerging technologies and encourage efficiency and affordability. She specializes in strategic planning, business transformation, shared service optimization, and software and services selections. Prior to joining ISG, Dawn worked with the University of Texas System, Ciber, Sierra-Cedar and Maximus.