Institutions today are resolving to modernize their business processes and technologies to improve performance and results in the digital economy. In service to member institutions, Edge serves to unpack the process of digital transformation and business systems modernization, discuss the pitfalls and problems that can occur as a result of these efforts, and determine how one can best meet an institution’s needs and goals to deploy the best possible solutions at the most affordable price. In understanding foundational concepts related to planning and deployment of enterprise resource planning (ERP) systems, the likelihood of success in any digital transformation and business system modernization project will increase dramatically.
The term “digital transformation” is routinely heard today in the higher education space. But what does it mean? Today, this term is no longer ambiguous and now refers to how higher education institutions are changing the way they operate. At the simplest level, digital transformation involves transforming an institution’s core business to better meet student, faculty, researcher, staff, and alumni needs by leveraging technology, data, people, and processes. Digital transformation represents a sea change in how an institution delivers value, and marks a radical rethinking of how an institution uses technology to fundamentally change performance and outcomes. Digital transformation is and should be disruptive, innovative, and a necessary means of survival as our digital world has changed how we work, learn, and interact.
Business modernization, an aligned term in play today, refers to effective use of data as a primary asset that delivers actionable intelligence. In particular, new technology topologies are introduced, such as hybrid and multi cloud computing and web services, accommodation for automating processes associated with the entire lifecycle of a student, streamlining and optimizing associated business processes, and leveraging technology to gain efficiencies and greater return on investment.
ERP systems have evolved now for several decades into what is considered today to be the heart of an organization’s enterprise information systems architecture. Evolution of modern day ERP systems began decades ago with material resource planning systems used to manage inventory in warehouse and distribution centers. As functional applications developed and became available, ERP systems began to unify the operations of organizations. Enterprise Resource Planning, a term coined by Gartner in 1990, refers to major architectural advancement, with the consolidation of silos of data and applications that transacted against the data, into a “data centric” or single, unified data environment. Whereas functional areas relied on silos of data to operate, the reports generated from these silos told different stories and created confusion with respect to the actual state of the business. Unifying data and creating applications for each functional area to transact against the same data, created one story where the system captured enterprise data holistically and achieved a new value proposition through transposition of data into information and ultimately into knowledge.
Today’s modern higher education ERP system relies on data centricity and an ERP suite of applications to serve general ledger accounting, student information, constituent relationship management, human resources, student recruitment and enrollment, career placement, and alumni management. These highly complex software solutions are configured to automate the re-engineered business processes of the institution. Mass amounts of data through analytics present trends, patterns, and behaviors within the data that are of strategic value in solving problems of recruitment, attrition, graduation rates, and graduate placement.
Added to these complex implementations of ERP systems, many organizations have hybrid-cloud and mixed-cloud topologies, concerns with security, mass device connections driven by the Internet of Things, the lack of user adoption or confusion over re-engineered business processes, and varying models of support. What is the result? Likely a failed ERP project.
Projects are defined with a start and end date, and generally considered a success if they are “on time and on budget”. Sadly, this is not the majority case. Leading research has found that the percentage of global ERP projects that fail has risen from 55% to 75%. The definition of ‘failure’ is a bit fluid, but certainly means the projects did not reach their objectives. At the extreme end, the new systems did not work in any meaningful way or the cost overruns were 100% or more. This level of failure is daunting to any institution planning to renew or replace its ERP system.
Although there are many variables that can lead to failure, and certain essentials with respect to competent project management must be in place, the major cause is that institutions are not ready to perform against the project plan. As examples of lack of readiness: data structure, governance, and management may not be centralized and in effect, functional managers may lack the ability to manage the change, business processes may not be sufficiently re-engineered and documented through business process modeling, information technology architecture may be lacking, undocumented, and ill-prepared for software as a service implementations. Such lack of readiness results in project change orders that are time consuming and expensive. As a result, $4M projects turn into $6-7M projects, and time drags on until institutional fatigue sets in.
So what can be done about this problem? How do we reduce the risk associated with implementing or modernizing existing ERP systems?
A Successful Business Systems Modernization Approach
This three-phased, bundled approach is closely coordinated by Edge on your behalf and involves nationally known companies with demonstrated leadership in the education domain, all selected by means of a competitive public bidding process. As your trusted partner, Edge is committed to work in concert with these highly regarded national companies that serve to transform higher education institutions by providing an independent perspective and creative solutions to improve operations, reduce costs, and position students for success.
For more information on Edge’s ERP and Business System Modernization Success Methodology, please contact info@njedge.net.