ERP Implementation as an Agent of Organizational Change

Stephen Lightcap VP Finance & Admin., Cabrini College

Michael Scheuermann Sr. Consultant, Drexel University

May 2004

Agenda

• Project description– Drexel implementing Banner at Cabrini

• Background on each institution• Foundation for project

– initial relationship — IT support

• Challenges to implementation project• ERP as organizational change agent• Lessons learned• Future directions

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Project Description

• Drexel University in ASP capacity, implementing SCT Banner at Cabrini College

• CMDS would no longer be supported– need to change and make significant investment

• Cabrini interested in expanding and enhancing administrative and support services to students– on-line registration

– financial statements

– reviewing transcripts, etc.S

Project Description (cont.)

• Maintain niche culture while providing e-services expected by parents and students

• Commitment to providing related infrastructure to support access to services—wireless, desktop access, robust and secure network.

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Cabrini College

• Liberal arts & sciences—2100 students, religious affiliation, former women’s college, now co-ed, established in 1957

• 68 full-time faculty-150 adjunct faculty-147 staff & admin-48 outsourced personnel—IT staff of 5

• CMDS (Jenzabar)/ ADP / Raiser’s Edge / SIRSI in library

• Some home-grown Web tools to access directory, room reservations

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Drexel University

• Private institution founded in 1891• First microcomputer requirement in nation

– Begun as Macintosh-only program in ’83– Platform selection made “open choice” in ’97

• Major wired upgrade from ’98 – ‘00• Wireless Initiative started in late 1997

– Library and student center were pilot projects– Entire campus by Fall 2000

• Provide I-2 connectivity to other institutions• Provide IT services (ASP) for MCP Hahnemann

University & other colleges – DUCOM M&A 7/02

Initial Relationship “Phase I”

• Drexel CIO and Cabrini President prior working relationship

• Drexel asked to provide temporary IT leadership and assist in strategic plan

• Six month relationship– staff changes, – assistance with infrastructure, – introduced WebCT, – solving computer lab issues, – developing policies and documenting procedures

• From “Trust” to development of formal, contractual relationship

• Reorganize support services, use technology to provide support

• Recommendations for future S

Expanded Relationship “Phase II”

• Discussion about admin services, business processes, what to do after CMDS

• Cabrini—desire to use top tier ERP—cost prohibitive

• Discussions with vendor—proposed an ASP model with benefits to all

• Developed plan to implement Banner system at Cabrini

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Cabrini Context

• Drexel assist in development of RFP to replace core admin. system

• Concerns re: partner’s access to strategic information

• IT staffing requirements of stand-alone system

• Desire to further strategic partnership with Drexel

• IT not core function @ Cabrini…why do it ourselves?

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HE Environment - Limits Vendor and Institutional Solutions

Comprehensive Research Universities

Other 4 year Collegesand Universities

Community Colleges and 2 year institutions

Total

93 62

968 440Trade Schools

1,563 1,972

504 1,470

Number of U.S. Institutions of Higher Education By Segment

Public Private

HE Environment –Limits Vendor and Institutional Solutions

• Lack of experienced IT Leadership– One year of experience ten times– No developed IT strategy

• Technical skills often limited– Dependence on products one knows– Risk not a criteria in product “choice”

• Lack of resources– Short life cycle for technology demands continual

renewal and cost– Competing institutional priorities

• IT Fragility

Small School Context

• Limited resources to procure and staff

• Limited opportunities for IT staff professional growth

• Limited mobility opportunities

• Recruitment and retention challenges for IT staff

• Supervisory challenges in an Academic-Centered environment

• Cultural Myopia

• Knuckleheads

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Institutional Challenges

• Provide IT solutions to critical business and academic needs 24x7

• Optimize scarce resources to provide – Robust server and network infrastructure– Timely business and academic applications

– Professional skills and support structure • Develop & document policies and procedures• Facilitate productivity – utilize Web, email

Vendor Challenge

• Optimize “feet on the street”• Leverage investment in current applications

– Time is the enemy (3 years is only 6 months in Internet time)

• Expand use of applications to other institutions• Reinforce the ASP model as a solution to

academic and business challenges• Promote virtual services are a “click” away

Institutional Choices

• Self develop

• Best of breed

• Single vendor

• Outsource staffing of in-house facilities

• Consortium – Just doesn't work!

• Managed service provider / Co-location

• Application Service Provider (ASP)

• Readiness meetings—demo Banner, promote idea at Cabrini, get buy-in at all levels—

• Chance for Cabrini to differentiate itself from peer schools.

• Attract new markets—quality students

• Operate more effectively and efficiently

• Manage operations with sound reliable information basis

Implementation Plan and Schedule

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• Student system—undergraduate admissions

• Finance

• HR

• Financial Aid

• Training, mentoring and support plan

Implementation Plan and Schedule (cont.)

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• Billing processes and workflow

• Chart of Accounts

• Financial Aid distribution

• Managing variety of admissions schedules

Implementation Plan and Schedule (cont.)

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Non-Technical Issues

• Work related communication and collaboration among functional staff

• No regular “work” meetings

• Staff used to ad hoc ways of recording transactions

• Skill deficiencies among some revealed when tasked with using the system

• Transition / turnover

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Challenges to Drexel

• Get more involved to make it work or follow plan and risk project failure (not an option)

• Time commitment

• Doing the work—rather than teaching and supporting which was the plan

• Cost of support

• D.U. task orientation

• Business continuity plan

Challenges to Cabrini

• Rationalize outsourced staff

• Fear of losing control

• Cultural differences – Small vs. Large

• Communication styles – written/spoken vs. e-mail

• CC process orientation

• Change management

• Business Process Reengineering

• Managing Expectations (failure not an option)

• Human Resources

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Application Service Providers

• ASPs are simply companies that provide access to applications over the Internet

• Outsourcing switches from assets to access. By 2010, the market share of IT utility providers will be within 29% of the total IT services market – (Gartner Group)

• Companies will in the future buy their information technologies as services provided over the Internet rather than owning their own hardware and software – (Your Next IT Strategy; Hagel and Brown; HBR 10/01)

Why Drexel as a Provider?

• Trusted technology provider in HE market• Higher Education “full service” ASP today• First to market – regional flagship focus• Four years of proven success • Other schools participating – concept works• Leadership and skills• Entrepreneurial environment• Infrastructure in place• Vendor relationships• Proximity

Example: Phase I Progress at Cabrini

• IT leadership and staffing in place• Advisory structure in place• Help desk in place• Email and Web-mail in place

– Virus protection standardized and controlled– 100 MB mail per mail box

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Services Improved

• Course development in WebCT in place ― 40 courses developed in 6 months

• Connection to internet quadrupled• Wireless operational throughout campus• Web site hosting available • CabriniOne ~ portal• Server elimination begun• Proxy Server in place for off-campus library

access

Totally Replaced ERP System

• IT policies, procedures, documentation and standards dramatically improved

• Substantial savings on new PC purchases• Transition to SCT Banner administrative

applications– 8 month time period– July 2003 implementation– Hosted at Drexel

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Schools are Leveraging Drexel Assets

• IT staffing• Operational staffing• Software and business applications• Hardware and network• Via:

– specialists– internal consultants / shadowing– ASP services – External relationships

• Lowering IT costs

“We don’t do things that way”- Business Process Re-engineering -

• How to know what to change and why

• Does the software drive the organization?

• How to improve business practices without compromising “culture”

• Top level support key to success

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Schools are Also Receiving Unintended Benefits

• Business process changes – best practices

• Cultural changes

• Increased accountability

• Cost avoidance (avoiding bad decisions)

• Increased sense of urgency

• Improved competitiveness

• Strategic cooperation vs. “vendor relationship”

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Lessons Learned

• Don’t discount cultural differences between institutions

• Turnover must be expected and creates opportunities

• Communicate clearly and regularly with the affected community

• Consider project management tools• Understand process orientation and leverage

to maximize linear implementation schedule

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Schools are Developing New Metrics

• Importance of quality and effectiveness of service

• Evaluating performance vs. peers rather than internal performance

• Recognizing the capability of access vs. owning assets

• Refocusing on academic core mission

Current Status and Phase II

• Banner basic functionality fully implemented• BPR ongoing• Adopt standard administrative processes/

forms/etc. of ASP provider• Retain academic autonomy• Mentoring CC staff by Drexel functional users• C-BUG• Best practices cuts both ways

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New Directions for Each Institution

• Drexel—new partners, new initiatives• Cabrini – Phase III:

– Collaborative purchasing beyond IT & ASP– Best practices– Leverage Banner capabilities as users gain

experience– Share experiences with others

Questions?