Implementing ERP Systems in Higher Education Institutions
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Implementing ERP Systems in Higher Education Institutions
Leo Zornada MSc., Tamara Bertok Velkavrh MSc.
Faculty of Management Koper, Cankarjeva 5, SI-6000 Koper
Leo.Zornada@fm-kp.si, Tamara.Bertok@fm-kp.si
Abstract. With the computerisation of business they already expand their solutions in order to
activities in higher education institutions ERP satisfy the needs of higher education institutions.
vendors quickly perceived a new market
opportunity. Enhancements or mere adaptations 2. Risks in ERP system implementation
of these solutions, which stemmed from the
experience in business practice were not always ERP (Enterprise resource planning) systems
successful. By taking a global view, the present or integral information solutions, often called in
needs and future expectations of higher practice connected information systems or
education institutions on one side and ERP integrated application packages, enable us to
vendors on the other side in domestic higher control all key business functions in a company
education environment were analysed. by using unified information architecture. Their
The article presents research results in the main aim is to connect all business units and all
field of ERP systems and their use in higher business functions into a unified computer
education institutions (universities, faculties and system that satisfies the needs of the whole
independent higher education institutions) in organisation. By implementing such solutions
Slovenia and abroad. On the basis of the study of users expect to improve company's efficiency
the supply on the market and by a thorough study and, consequently, to improve the quality,
of cases from practice we try to find similarities productivity and profitability of business
and differences between Slovenian higher operations [14]. There are commercial
education institutions and world trends. programme packages, which enable the
integration of transactional-oriented data and
Keywords. ERP systems, informatics, higher business procedures throughout the whole
education institutions. organisation or within the whole supply chain
extending over a number of organisations [1].
1. Introduction Despite promises for improved organisation
and more effective management in the company,
We live in times of ubiquitous presence of a number of research activities have shown a
computers. Information and communication rather high failure rate in the implementation of
technology (ICT) have been present in our integrated information solutions, which, in some
environment for quite some time. cases, even involved a high degree of risk [5].
The opportunity for making profits from ICT The reason for this can be found in the history or
was first perceived by manufacturing enterprises. strategy of the development of ERP systems,
These opportunities were later perceived by the which, following the principle of “best practices”
state and its institutions. Today, the academic analysed main business functions in most
world is aware of the advantages of ICT too. Not successful organisations and formed appropriate
only from the point of education and research reference models. Consequently, this meant that
activities, but also from business aspect, which the implementation of ERP systems involved a
uses ICT to support other business functions high degree of complexity and adaptation to
(administrative, organisational, accounting, etc.). different organisations [5]. The reasons for
An increasing number of higher education failure can also be found elsewhere [15]:
institutions have introduced ERP systems in • Strategic goals are not clearly defined;
order to improve their operations and make them • Company management is not responsible
manageable and more transparent. ERP vendors for the system and does not participate in
are also aware of this fact, which is the reason its implementation;
27th Int. Conf. Information Technology Interfaces ITI 2005, June 20-23, 2005, Cavtat, Croatia• The project of implementation from those supporting manufacturing activity to
underestimates the scope, size and processes like orders, finance, assets
complexity of the information solution; management and human resource management.
• The organisation is not ready for changes Lately, these systems have been offered for
brought about by the integral information grants management, marketing automatisation, e-
solution; commerce, student systems and supply chain
• The project team is not selected from systems [13]. And what about the academic
among the most experienced and community? Most certainly, the solutions are a
trustworthy professionals; step closer, but still not entirely adapted to
• Inappropriate education of employees, who support business activities in higher education
are thus not able to satisfactory manage the institutions.
system; ERP systems for higher education develop in
• Accuracy of data is not assured; the direction of support for key administrative
• System efficiency measures do not allow and academic services. The core of such a
for successful changes to take place system usually supports minimal student
(expectations of the organisation are not administration (enrolment procedures and
realistic); student enrolment, financial support for students,
• Questions regarding the method of system student data), human resource management
implementation in many parts of (monitoring of employees) and finance
organisation have not been appropriately (accounting, payments, investments, budget). It
resolved; is possible to include some other programme
add-ons, e.g. assets management (contracts,
• Technical problems.
subsidies, grants, etc.) or for monitoring student
The success of the implemented ERP system
and developmental services of institutions [10].
depends on numerous factors, as it embraces all
The main advantages of ERP for higher
business operations of an organisation. The
education institutions are, according to ECAR
participation of the management, the
organisation, the following [6]:
modernisation of existing business processes, the
• Improved information access for planning
possibility to connect the integral information
solutions with other business information and managing the institution;
systems, cooperation between advisers and • Improved services for the faculty, students
employees and, last but not least, highly and employees;
educated staff are of key importance [2]. • Lower business risks;
The implementation of ERP system may also • Increased income and decreased expenses
represent huge financial costs for the company. due to improved efficiency.
According to some authors, expenses for the The integration of all business functions in
implementation of integral information solution higher education environment represents the
for a medium-sized enterprise may amount to integration of systems for student administration,
between $2m and $4m. On the other hand, the human resource management systems and
expenses for the implementation of ERP systems financial systems that used to be supported by
in a large enterprise can exceed $100m [14]. separate and often incompatible information
packages. An integrated database shared by
3. ERP systems and higher education different business functions and, consequently,
different business modules of a single integral
Lately, many higher education institutions information solution is of key importance. Data
want to take advantages of ERP systems. They can be transferred between individual processes
invest tens of millions of dollars in ERP projects and accessible by various users in real time. The
that may go on for two, three or even more years use of up-to-date information approaches (web
[13]. The investment in ERP systems represents technologies, mobile phones, on-line services,
the biggest investment in ICT for higher etc.) is an additional advantage, not only for the
education institutions [9]. administration within a higher education
The basic idea behind the ERP systems lies in institution, but also for people who constantly
connecting the main functions of a typical interact with the institution (students, teachers,
enterprise in manufacturing. As late as in the researchers, etc.) [9]. Nevertheless, many higher
nineties, the range of ERP systems broadened education institutions do not implement integral
information solutions ERP systems. The reasonscan be found in existing “good enough” solution at Ohio State University rose from
information solutions, which are used by the the initial $53m to $85m.
institution and the unwillingness of institutions • The University of Minnesota had a similar
for changes and investments (other priorities, not experience, when the planned cost of $38m
being ready) [6]. rose to $53m, and finally reached $60m.
Some authors describe the implementation of Risks related to the implementation of ERP
ERP solutions in higher education institutions as systems in higher education institutions are
extremely difficult. Expenses and risks involved relatively high, with the institutions not always
are high, whereas the return on investments is being aware of them, and not anticipating all or
medium to long-term [3]. An answer to the at least the majority of eventual problems. Being
question “Is it better to avoid the implementation aware of the advantages and threats involved in
of integrated information solutions?” should be, the implementation of ERP systems, PMFISHE
according to the chief information officer at the (Project Management for Information Systems in
University George Washington, a definitive Higher Education) initiative was presented at the
“NO”. He believes that integral information University of Newcastle. The initiative aimed at
solutions give higher education institutions preparing a document which would provide the
competitive advantages and adds that: guidelines for all higher education institutions
“…institutions, which are unlikely to switch to faced with the problems surrounding the
integral information solutions, will find it implementation of ERP systems in their business
difficult to retain their market share of students. activities [4].
Students will, sooner or later demand services, In order to improve the share of successfully
offered by other institutions…” [9]. The latter is implemented ERP projects in higher education
stressed by Farrell in his contribution, which environment, the initiators of PMFISCHE
emphasises the importance of developing global initiative wanted to create the conditions for a
economy and operations according to 24x7 successful communication and cooperation
principle, which directs the development of ERP between two completely different groups of
systems. This is the direction followed by many people: the management of a higher education
higher education institutions (franchising, institution, who is not familiar with information
distance education, on-line learning and the systems and their implementation and
introduction of self-services), which makes wide development on one side, and IT experts, who
accessibility and the retention of market position usually do not have or lack experience related to
possible [3]. the implementation of information solutions
Research in British higher education adopted to special needs of academia on the
environment reveals a number of cases in which other hand [4].
universities started projects for the
implementation of integral information solution. 4. ERP Vendors for higher education
Unfortunately, no results or conclusions institutions
stemming from this research are available,
because the projects have not been finished yet The main ERP Vendors for higher education
[3]. in the world are Oracle, SCT, PeopleSoft, SAP,
Despite a limited number of implemented Jenzabar and Datatel. Despite this year's merger
integral programme solutions in higher education between PeopleSoft and Oracle Corporation, the
institutions, some cases of unsuccessful latter will keep the development department of
implementation can be found in practice [11]: PeopleSoft and their products, thus these two
• At Cleveland State University they were companies will be dealt with in our article
almost forced to take legal action against separately. According to research carried out by
the ERP vendor, after they had found out ECAR organisation it can be noticed that none of
that only half of student requests can be these vendors is a market leader [6].
dealt with in 1998. The University
continued with the implementation of ERP
system despite rising costs (the planned
amount was exceeded by $10.8m and
amounted to more than $15m).
• Similarly, the planned cost of the
implementation of integral informationChallangers Leaders
100
SCT
Percentage of implementations
80
Other Datatel
Ability to execute
SCT PeopleSoft
60
SAP
PeopleSoft
40 Oracle
Oracle SAP
Jenzabar
20
Datatel
Jenzabar
0
Financial HR Student Niche players Visionaries
ERP Module Completeness of Vision
Figure 1. The share of ERP systems Figure 2. ERP in US higher education
implementation [6] institutions [10]
According to Gartner Group the consolidation Solutions of these companies embrace the
of vendors and the return to basic business majority of main functions of ERP systems
operations had a crucial influence on ERP (managing study process, managing human
solutions in the area of higher education [17]. resources and finance). Advantages of individual
ERP vendors are divided by Gartner Group solutions can be noticed in different areas.
according to their vision and the possibility of PeopleSoft emphasise the role of Internet and
solution implementation. Their "Magic web technologies (reaching virtual organisation
Quadrant” comprises four groups of vendors[10]: through portals), SAP is in favour of ERP
• “Leaders”: enterprises with a good market systems centred on users (student part which is
position and an excellent vision regarding student-oriented, etc.), Oracle connected the
future business activities. SCT (Banner Internet and back-office operations in E-Business
solution), Datatel (Colleague solution) and package.
PeopleSoft belong to this group. It is difficult to find any of the mentioned
• “Challengers”: enterprise with a good ERP systems in Slovenian higher education
market position, but without a deeper environment. Even though some vendors of ERP
understanding of future development systems for higher education are present and
trends. easily recognisable in Slovenia (SAP, Oracle),
• “Visionaries”: enterprises with a good they are mainly found in manufacturing, the
vision regarding their operations in future, higher education segment of the Slovenian
but slightly worse present business market remains unknown to them.
operations. Oracle belongs to this group,
yet the merger with PeopleSoft can change 5. Higher education information system
the situation in the future.
• “Niche players”: enterprises which are On the basis of the analysis of business
successful in certain market segments. activities in a higher education (HE) institution
SAP belongs to this group, as they are a [19] and strategic plans regarding
leading company in the field of integral computerisation of HE institutions in Slovenia
information solutions. But Gartner assesses [7,12], business activities and information
their vision and strategy in the field of support for HE institutions can be defined as
higher education as rather questionable. shown on Figure 3. For each of the basic
activities of an institution, business activities and
information support is divided into:
• the implementation of the basic processes
(education and research),
• administrative support for the
implementation of the basic processes.Inter-university national and international cooperation, higher became a member of the newly established
education at the level of country,
lifelong learning University of Primorska (UP). The FM’s
computerisation development represents the
BUSINESS ACTIVITIES IN HIGHER EDUCATION
INSTITUTIONS basis for the computerisation of the UP.
Business reports, controlling, decision support systems, quality These three strategic plans for
assurance
computerisation reveal that their development
THE THE OTHER BUSINESS was similar, regardless of different
IMPLEMENTATION IMPLEMENTATION ACTIVITIES implementations. They stemmed from the
OF EDUCATION OF RESEARCH HRIS – human
ACTIVITIES ACTIVITIES resource existing situation in the field of informatics with
portals, forums, Research information system, the following characteristics:
systems for equipment, library financial and
e-learning, virtual system, support for accounting IS, • satisfactory ITC equipment,
libraries, library
system,
project work,
laboratories,
administrative IS
(including
• the existence of independent unconnected
laboratories, research software, document system), or only partially connected functional
teaching equipment, etc. marketing IS,
simulations, etc. publishing IS, sales
information solutions in the field of
IS, etc. accounting and human resource
ADMINISTRATIVE ADMINISTRATIVE management,
SUPPORT FOR SUPPORT FOR
EDUCATION RESEARCH • the existence of a good, but
PROCESSES PROCESSES
SIS – student RIS – research
technologically outdated solution Fnisid,
information system information system which was used almost at all higher
education institutions in Slovenia at that
Figure 3: Business activities of HE time [8],
institutions and higher education ERP • unconnectedness of solutions with other
system information systems in the field of
education and research.
The strategic targets (developmental strategy, Based on a number of independent studies
business excellence and the quality of all that analysed business operations of higher
business operations, based upon the vision, education institutions and their information
mission and strategies of a higher education needs plans for computerisation were made with
institution) can be reached only by incorporating the following common characteristics:
a suitable information strategy, based on the
• at least three aspects for the support of
implementation of the model shown on Fig. 3.
processes in higher education institutions
The development of ERP systems was and still is
were defined: educational process,
the only possible way for reaching these targets, financial and accounting function, human
because it comprises [15]:
resource management,
• a common view on business operations,
• the demand for a technologically up-to-
• a common database for data and date solution used in a variety of
transactions. contemporary business operations:
e-commerce, mobile commerce, etc.,
6. Computerisation of higher education • insuring independence, upgradeability,
institutions in Slovenia connectiveness, stability and security of
solutions,
Slovenian higher education institutions • within the framework of all three strategies
(universities, faculties and independent higher the creation of a single data warehouse or a
institutions) almost simultaneously initiated central database was planned,
strategic planning of IT. At the University of • the support of the education process was
Ljubljana (UL), the strategic plan for the made a priority.
computerisation was ready in 2001 [12], at the The aim of all these plans was to create an
University of Maribor (UM) the project for the ERP system in support of business operations
renewal of information system was prepared in carried out by higher education institutions. As
the same year [7]. The Faculty of Management there were no solutions available on Slovenian
Koper (FM) should be mentioned from among market that would support education activities,
the independent higher education institutions. the decision to develop an in-house solution was
The FM, formerly called Higher School of sensible. Such an approach involves:
Management in Koper initiated its
computerisation in 2000 [19]. In 2004, FM• in-house development of information users are most often adapted to the information
subsystem in areas, which are peculiar to solution during implementation phases. Higher
higher education institutions and for which education environments are extremely dynamic,
there are no competitive solutions especially in Slovenia, where the education
available on the Slovenian market, system has been fundamentally changed. A
• the integration of a commercial solution, consequence of the wish to build up-to-date
available from a vendor of functional information support for business activities, but
information system, into the higher with material and regulatory inability to
education information system, with a introduce a global solution, we are faced with the
possibility to develop an in-house solution development of three equivalent integral
later. information solutions in the field of higher
The UL, UM and UP have already developed education. Despite the differences of individual
and still use individual information subsystems. approaches it can be expected that the future will
The UM develops the most centralised bring a convergence of systems (at least from the
information system based on common functional point of). The role of the state could
information solutions for all faculties, the UL prove decisive, because it finances the
develops a much more heterogeneous system, as development of individual solutions through
individual faculties use information solutions projects. Higher education institutions and the
provided by different vendors, all of which are state should leave behind the question of
connected to a common data warehouse. The UP information support for business processes and
adapted the system used at the FM, which now should focus on informatics as one of the key
represents the basis for university information factors of quality assurance in higher education.
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