Track 6 – Enterprise Resource Planning


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Track 6 – Enterprise Resource Planning

  1. 1. Higher Education ERP: Lessons Learned Ken Orgill West Virginia University Dave Swartz George Washington University
  2. 2. Overview <ul><li>What is ERP? </li></ul><ul><li>Benefits of ERP </li></ul><ul><li>First Steps </li></ul><ul><li>Costs of ERP </li></ul><ul><li>The ERP Contract </li></ul><ul><li>Limit Customizations </li></ul><ul><li>Use of Consultants </li></ul><ul><li>Project Management </li></ul><ul><li>Creating the single team atmosphere </li></ul><ul><li>Recruitment and Retention Issues </li></ul><ul><li>Morale of the Team </li></ul><ul><li>Key Functional Issues </li></ul><ul><li>Key Technical Issues </li></ul><ul><li>What About Small Schools? </li></ul><ul><li>The Future of ERP </li></ul>
  3. 3. What is ERP? <ul><li>An ERP or Enterprise Resource Planning system integrates information and business processes to enable information entered once to be shared throughout the organization. </li></ul><ul><li>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. </li></ul><ul><li>More recently these systems have addressed applications specific to higher education such as student systems and grants management. </li></ul>Common examples include SAP, PeopleSoft, Banner and Oracle . Needs Assessment Software Selection Process Reengineering Conference Room Pilot Training Phased Implementation ERP Project
  4. 4. What are the Benefits of ERP? <ul><li>Improve access to information </li></ul><ul><li>Improve workflow and efficiency </li></ul><ul><li>Improve controls and program alerts </li></ul><ul><li>Process reengineering -- update old processes </li></ul><ul><li>Foundation for new processes, such as e-procurement, with significant ROI </li></ul>Ship Product Receiving Buyer or Management Approval Cycle Supplier Fulfillment Route to Recipient Requisitioning Purchase Order User Product Selection Accounts Payable General Ledger Financial Reconciliation
  5. 5. First Steps: Well Begun is Half Done <ul><li>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 </li></ul><ul><li>Compare possible solutions to see which one best fits your needs and produces fewer gaps. More gaps may result in more costly customizations. </li></ul><ul><li>Best of breed vs. integrated solutions </li></ul><ul><li>Big bang vs. phased implementation </li></ul>
  6. 6. What are the Costs of ERP? <ul><li>Direct costs only represent a fraction of the total costs of ERP </li></ul><ul><li>Direct costs include hardware, software, and people on the project -- the largest category is personnel costs </li></ul><ul><li>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. </li></ul>
  7. 7. The ERP Contract <ul><li>The prime vendor -- “one butt to kick” -- and leave it to the experts! However, there are some trade-offs. </li></ul><ul><li>Fixed cost vs. time and materials with or without a cap </li></ul><ul><li>Build flexibility into the contract to accommodate changing technology </li></ul><ul><li>Check references </li></ul><ul><li>Be skeptical of vendor promises -- get it in writing! </li></ul>
  8. 8. Limit Customizations and Scope <ul><li>To change or not to change your old business practice? </li></ul><ul><li>Are you paving cowpaths or improving your business process? </li></ul><ul><li>Are customizations really needed? Have you factored in the total costs of the mod? </li></ul><ul><li>Watch out for scope creep and hidden customizations </li></ul>
  9. 9. Use of Consultants <ul><li>Many different roles for consultants: staff project, backfill office staff, audit project, serve as prime contractor, project management, etc. </li></ul><ul><li>Too many consultants relative to university personnel may limit knowledge transfer </li></ul><ul><li>Too few consultants may limit ERP expertise on the project </li></ul><ul><li>Right of refusal over consultants -- watch out for the green oversold consultant “in training” </li></ul>
  10. 10. ERP Project Management <ul><li>One of the most important decisions on an ERP is the selection of the project manager </li></ul><ul><li>The PM should be a professional manager with experience with project management, loyal to the university, with both functional and technical knowledge. </li></ul><ul><li>Use a standard methodology to provide guidance and structure to the project </li></ul><ul><li>In addition, to the project manager, there should be functional and technical managers. </li></ul><ul><li>Individual functional teams, such as grants management, should have a designated lead. </li></ul><ul><li>Use of committees and executive steering group </li></ul>
  11. 11. Creating the “single team” atmosphere <ul><li>Avoiding us versus them </li></ul><ul><li>Partnership between functional and technical teams </li></ul><ul><li>The partnership between senior management -- e.g., the CIO and the CFO. </li></ul><ul><li>Partnerships with consultants -- teams composed of consultants and university personnel working side by side </li></ul><ul><li>Partnerships with users </li></ul>
  12. 12. Recruitment and Retention Issues <ul><li>Bonuses for “life of project” efforts </li></ul><ul><li>Find and nurture people early </li></ul><ul><li>Back-filling Staff </li></ul><ul><li>Staffing matrix </li></ul><ul><li>Knowledge transfer and mentoring </li></ul><ul><li>Stress management </li></ul><ul><li>Team building </li></ul>
  13. 13. Morale of the Team <ul><li>ERP projects can put a strain on personnel </li></ul><ul><li>Schedule down times and events to help boost morale </li></ul><ul><li>Keep an eye out for individuals on the edge </li></ul><ul><li>Celebrate the achievement of milestones and recognize individual and team contributions </li></ul>
  14. 14. Key Functional Issues <ul><li>Needs analysis </li></ul><ul><li>Process engineering </li></ul><ul><li>Back-filling staffs </li></ul><ul><li>Training </li></ul><ul><li>Recruiting and retaining staff </li></ul><ul><li>Conference room pilot (CRP) </li></ul><ul><li>Reporting </li></ul><ul><li>Gaps analysis </li></ul><ul><li>Setting expectations </li></ul><ul><li>Obtaining user buy-in and acceptance </li></ul><ul><li>Validation of data and systems </li></ul><ul><li>Communications </li></ul><ul><li>Process documentation </li></ul><ul><li>Audit of data and system </li></ul>
  15. 15. Key Technical Issues <ul><li>Sizing the system </li></ul><ul><li>Recruiting the talent </li></ul><ul><li>Holding the line on modifications </li></ul><ul><li>Conversion of data </li></ul><ul><li>Interfaces </li></ul><ul><li>Report development </li></ul><ul><li>Change management and problem tracking </li></ul><ul><li>Desktop requirements </li></ul><ul><li>Network issues </li></ul><ul><li>Distributed versus centralized production </li></ul><ul><li>Help Desk and ongoing support </li></ul><ul><li>Planned upgrades and revisions </li></ul><ul><li>Production budgets </li></ul>
  16. 16. What About Small Schools? <ul><li>Go vanilla, if possible. </li></ul><ul><ul><li>Your mantra – no mods, no mods … </li></ul></ul><ul><li>Contain the scope creep. </li></ul><ul><li>Minimize the amount of data to be converted. </li></ul><ul><li>Look toward consortiums. </li></ul><ul><li>Check into “Quick Start” programs </li></ul>
  17. 17. Post-Implementation Issues <ul><li>Most problems end up being process issues and incorrect usage of the system </li></ul><ul><li>Gearing up for round two – the upgrade path to the next ERP release </li></ul>