The new face of ERP: enterprise applications come out of the back office to manage everything from business operations to student lifecycle relations.
WHEN IT COMES TO ENTERPRISE APPLICATIONS, ONE SIZE DOES NOT FIT ALL. Just ask John Southard, chief technology officer for New York Law School History
New York Law School is one of the oldest independent law schools in the United States. The Law School was founded in 1891 by a group of faculty, students, and alumni of Columbia Law School led by their founding dean, Theodore William Dwight, a prominent figure in the .
Southard's team manages a "quasi best-of-breed" mix of enterprise resource planning See ERP.
(application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) and constituent (or customer) relationship management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ) systems across the university. The solution includes SunGard's SCT Sacrococcygeal teratoma (SCT)
A tumor occurring at the base of the fetus's tailbone.
Mentioned in: Prenatal Surgery Banner for ERP; Admit-M software from the Law School Admission Council; and Blackbaud's Raiser's Edge software for alumni development.
Never one to rest on its laurels, NYLS NYLS New York Law School (New York, New York) also is investigating end-to-end hosted SunGard solutions from Drexel University Drexel University, at Philadelphia, Pa.; coeducational; founded 1891 by Anthony J. Drexel, opened 1892, chartered 1894 as Drexel Institute of Art, Science, and Industry. It was renamed Drexel Institute of Technology in 1936 and gained university status in 1970. (Pa.), which offers such services to other colleges, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
NYLS isn't alone. Higher ed institutions across the globe are rethinking their ERP and CRM investments with a new goal in mind: total financial management coupled with total student relationship management--from recruitment and enrollment, through retention, graduation, and even alumni giving.
The journey to this potential nirvana won't be easy. Like NYLS, most colleges and universities have a mix of ERP, CRM, and financial systems running across mainframes, Unix, Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. , and more recent architectures. Ripping and replacing these multimillion-dollar investments that took decades to design isn't an option. "On the one hand, universities want to simplify their back-end systems," says Ed Golod, president of Revenue Accelerators, a consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a in New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . "But on the other, they don't want to do anything that puts their current operations at risk." The best chance for real change frequently occurs when CIOs at institutions of higher ed reach out to their CFOs. "You can save money or drive revenue higher with a new enterprise system," Golod adds. "And that's the discussion CIOs have to have with their CFOs."
Ultimately, IHEs can gain economies of scale by standardizing on fewer, more powerful ERP and CRM systems, Golod asserts. "It's like buying in Buying in has several meanings. In the securities market it refers to a process by which the buyer of securities, whose seller fails to deliver the securities contracted for, can 'buy in' the securities from a third party with the defaulting seller to make good. bulk from a wholesale warehouse, only you're not saving a few dollars here and there. You're talking about annual savings that can exceed $100,000 through reduced licensing fees and better automation."
Skeptical? Consider the situation at the University of Houston. A new hosted CRM system from RightNow Technologies RightNow Technologies NASDAQ: RNOW is a U.S. software company that develops customer relationship management (CRM) software for small and mid-market businesses. It is incorporated in Delaware and headquartered in Bozeman, Montana. saves roughly $1 million annually, confirms a spokeswoman. Instead of a huge up-front licensing fee, RightNow gets a monthly subscription fee for the hosted service. The system automates communications between students and the university, reducing labor expenses related to retention, enrollment, and other key activities.
Comparatively speaking, RightNow is a relatively small player in the crowded enterprise software market. At first glance, the ERP and CRM industries are rapidly consolidating around two major forces: Oracle and SAP AG (company) SAP AG - (Systeme, Anwendungen, Produkte in der Datenverarbeitung - German for "Systems, Applications and Products in Data Processing") A company from Germany that sells the leading suite of client-server business software. The US branch is called SAP America. , the two largest independent application providers. A closer look reveals dozens of options.
Not sure where to start? First, keep four key enterprise software categories in mind: the traditional approach, hosted applications, open-source industry applications, and homegrown open-source applications. Here's a closer look at the pros and cons pros and cons
the advantages and disadvantages of a situation [Latin pro for + con(tra) against] of each path.
The Traditional Approach
For many IHEs, traditional server-based applications provide scalable, reliable, predictable environments. But a little change can do a lot of good. Applications from a decade ago required expensive RISC RISC
in full Reduced Instruction Set Computing
Computer architecture that uses a limited number of instructions. RISC became popular in microprocessors in the 1980s. (reduced-instruction set computing) processors and Unix software. In stark contrast, today's applications can run on lower-cost servers designed on processors from Intel and Advanced Micro Devices.
The net result? Server hardware running Windows or Linux delivers at least 10 times the power at one-tenth the price of RISC hardware running Unix from a decade ago, estimates Golod.
Still, the traditional applications market is undergoing some monumental changes. SAP focuses mostly on writing its own applications, but Oracle has been busy acquiring third-parry applications for the past five years or so. As Oracle swallowed PeopleSoft, Siebel Systems Siebel is a brand name of Oracle Corporation. Siebel Systems, Inc., founded by Thomas Siebel in 1993, was principally engaged in the design, development, marketing and support of CRM applications. , and the JD Edwards See J.D. Edwards. software lines (to name a few), some IHEs feared Oracle would suffer from a severe case of indigestion indigestion or dyspepsia, discomfort during or after eating caused by some interference with the normal digestive process. Symptoms include nausea, heartburn, abdominal pain, gas distress, and a feeling of abdominal distention. .
Customer churn, employee turnover, and product overlap were potential concerns during the acquisitions, concedes Jim McGlothlin James Milton McGlothlin (October 6 1943 Los Angeles, CA - December 23 1975 Union, KY), a graduate of Reseda High School, was a pitcher who had a 9-year Major League career. , vice president of higher education higher education
Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. at Oracle. "But I think our track record proves we addressed those concerns rather effectively."
That's for sure. For the most part, Oracle has clearly communicated its software strategies to higher ed and other vertical markets. Short term, Oracle continues to position its PeopleSoft solutions as its best-in-class option for universities. That's not to say IHEs running Oracle's own homegrown software have been left in the lurch; development on that code base continues. Longer term, Oracle will meld its original higher ed software with PeopleSoft's code in a project known as Oracle Fusion.
The strategy has earned largely positive feedback from the Higher Education User Group, a major organization representing Oracle and PeopleSoft customers across the higher education landscape.
Southern Illinois University Southern Illinois University, main campus at Carbondale; state supported; coeducational; est. 1869, opened 1874 as a normal school, renamed 1947. It has a center for archaeological investigation and a fisheries research laboratory. There is also a campus at Edwardsville. , for instance, completed a migration to Oracle E-Business Suite A group of integrated Internet-based applications from Oracle. Introduced in 2001 as Version 11i, it includes modules for CRM, finance, human resources, supply chain management as well as applications for business intelligence. version 11i this past fall. The deployment spans accounts payable, cash management, fixed assets fixed assets npl → activo sg fijo
fixed assets npl → immobilisations fpl
fixed assets fix npl → , general ledger General Ledger
A company's accounting records. This formal ledger contains all the financial accounts and statements of a business.
The ledger uses two columns: one records debits, the other has offsetting credits. HR, payroll, and purchasing. "We did the upgrade with internal staff because we had the in-house talent and clear understanding of Oracle's strategy," says Frank Scobby, director of administrative information services See Information Systems. at SIU SIU Southern Illinois University
SIU Seafarers International Union
SIU Special Investigations Unit
SIU Schiller International University
SIU Special Investigative Unit
SIU Salem International University
SIU Societá Italiana di Urologia , an HEUG HEUG Higher Education User Group (Oracle software users) member. The university now has a clear long-term investment protection because Oracle is developing migration roadmaps to Oracle Fusion.
Brandeis University Brandeis University, at Waltham, Mass.; coeducational; chartered and opened 1948. Although Brandeis was founded by members of the American Jewish community, the university operates as an independent, nonsectarian institution. (Mass.) also has a clear path to Oracle Fusion. But in this case, the university's journey will start from the PeopleSoft code base. In April 2006, Brandeis deployed the latest version of PeopleSoft's Human Capital Management (HCM HCM hypertrophic cardiomyopathy. ) to manage HR, payroll, base benefits, position management, and time and labor functions, according to Jason Alan Masciantoni, a staff member for library and technology services.
Yet these traditional applications typically require deep pockets for service and support contracts that can easily cost $100,000 or more per year. Plus, not all colleges and universities are clearly situated in the Oracle or PeopleSoft camps. Many institutions--NYLS, for one--have a hodgepodge of student and financial systems, and they are exploring hosted applications to simplify their IT infrastructures.
Otherwise known as software as a service (SaaS), hosted applications are generating strong buzz in the IT industry. Customers pay a monthly fee to access applications housed and managed by remote data centers and software providers. The model is simple, easy, and efficient--but is it a case of a host with the most?
The model is certainly not perfect. Some IHEs face cultural pushback push·back
1. A device or mechanism that affords movement of another object backwards: the pushback on a subway door.
2. Forced movement of troops back from the line. from trustees and privacy advocates who worry that remotely hosted data can be lost or stolen. But in reality such concerns appear baseless: Data stored remotely is at no greater risk from security breaches than data stored locally, according to Gartner, a technology research firm.
In a hosted model, there are also concerns about service level agreements (SLAs) and application availability. When Research In Motions BlackBerry e-mail system briefly went dark in mid-April because of a software glitch A temporary or random hardware malfunction. It is possible that a bug in a program may cause the hardware to appear as if it had a glitch in it and vice versa. At times it can be extremely difficult to determine whether a problem lies within the hardware or the software. See glitch attack. , many users were reminded that hosted applications fail from time to time.
Another potential concern is that many hosted application providers aren't profitable. "People forget how many application service providers went out of business during the dot-corn implosion implosion /im·plo·sion/ (im-plo´zhun) see flooding.
1. ," says Golod. "I'm not suggesting that will happen again with hosted application providers. But the financial viability of your partners is something to keep in mind as you weigh your hosted options."
Apparently, RightNow, which isn't yet profitable, has plenty of true believers "True Believers" is the fourth episode of the first season of the CBS television series The Unit. The episode aired on March 28, 2006. Summary
The team is sent to Los Angeles to protect Mexico's drug minister from an assassination threat. . More than 100 colleges and universities have embraced its hosted CRM software to manage recruitment and retention. For example, the University of Houston uses it to provide students with up-to-date information on academics, financial aid, and campus life. The system saves the university about $1 million annually because it eliminates thousands of expensive, labor-intensive phone calls between students and UH administrators.
Aware of the hosted buzz, traditional software companies also offer hosted versions of their products. But keep the hype in mind. Oracle estimates that five percent or fewer of North American North American
named after North America.
North American blastomycosis
see North American blastomycosis.
North American cattle tick
see boophilusannulatus. universities have embraced hosted ERP, CRM, and financial services. (Company officials say the adoption rate is growing quickly.) One reason for this: Hosted applications don't involve big capital expenditures for licensing fees and upgrades. The monthly costs are operating costs, which are predictable and easier for college and university CFOs to stomach.
Some colleges and universities are even developing and hosting applications for partner institutions. Such is the case at Drexel University (Pa.), which deployed and now manages the SunGard SCT Banner platform for nearby Cabrini College, which didn't have the internal resources to manage such a deployment, notes John A. Bielec, CIO CIO: see American Federation of Labor and Congress of Industrial Organizations.
(Chief Information Officer) The executive officer in charge of information processing in an organization. at Drexel.
Open-Source Industry Applications
At some IHEs, however, IT leaders want access to an application's inner workings so that they can tinker with the code and make enhancements on their own. In such schools, open source solutions from Centric CRM, Sugar CRM, and others might make the grade. In the open source model, IHEs typically pay a nominal--or even no--licensing fee to use the software. The only real ongoing cost is typically an annual maintenance fee that is usually a fraction of traditional "closed source" application fees, notes Golod.
Universities also gain the right to look into the software's source code--the hidden instructions that tell a program how to function. From there, programmers can tailor it to institutional needs.
Open source solutions such as the Linux operating system, MySQL database, and Apache web server See Apache. have gained critical mass within higher ed. CRM and ERP applications are newer. Although more technology consulting firms and integrators now support open source applications, it can be difficult for administrators to find the talent they need, when they need it, for an open source project.
Homegrown Open Source
If you want the benefits of open source but don't want to purchase such software from small software companies, there is another option: homegrown open source.
In this scenario, multiple IHEs partner to design and share open source applications. Indiana University, for one, is working with several peer institutions on the Kuali Project and the Sakai Project. While Kuali focuses on financial software, Sakai involves course management, notes Brad Wheeler, CIO of IU.
During the 1990s, IU administrators worked with an outside consulting company to write and develop the university's own financial software platform. But as the industry shifted from client-server to internet computing, the university had trouble keeping pace.
Kuali, which several universities are already testing, could change all that. By sharing code between universities, each institution can focus on one or two key areas of software development. The project should speed ongoing code enhancements and information sharing. Indiana University, for instance, plans to use a reporting module written by staff at Cornell University.
What's the downside? If any one university doesn't hold up its end of the bargain, peer universities could wind up with buggy or incomplete code. Also, here again, universities must clearly document all code changes. This will ensure that universities continue to have a clear feel for product changes and upgrades--even if IT staff members come and go over the years.
Kuali and Sakai are real-world solutions that have only been deployed on a limited basis. "It's safe to say that the open source community will continue to gain momentum," says Golod. "It's a natural fit for the universities that like to collaborate with one another."
Still, in the enterprise software space, one thing is clear: No one size fits all. Universities have at least four software models from which to choose. Weigh the options carefully. Examine long-term product roadmaps closely. The end-result should be a software system that manages student relationships from recruitment all the way through alumni giving.
Four Models to Know
When evaluating future enterprise software directions, keep these four options in mind:
TRADITIONAL SOFTWARE APPLICATIONS
Leaders: Oracle Corp., SAP AG, SunGard, numerous others
Upside: Very reliable, predictable, and scalable
Downside: Potentially high acquisition and customization costs; potentially high support costs
Leaders: Oracle, SunGard, Drexel University (Pa.), RightNow Technologies, numerous others
Upside: Monthly subscription fee is an operational cost rather than major capital expenditure; applications can be easily accessed from web browsers.
Downside: Many hosted application providers are small businesses with unproven financial models; universities must carefully negotiate service Level agreements (SLAs) to ensure availability.
OPEN SOURCE APPLICATION PROVIDERS
Leaders: Sugar CRM, Centric CRM, several smaller firms
Upside: Few if any acquisition costs; potentially low maintenance costs; ability to customize source code and tailor application for your university
Downside: Many open source providers tack global support teams and are not yet profitable.
HOMEGROWN OPEN SOURCE
Leaders: Indiana University, Cornell University, others
Upside: Universities partner together to write and share applications from scratch; Leverages strong "collaboration" heritage found within universities; no ongoing fees to third-party software companies
Downside: You may need to hire a team of programmers; one bad piece of code from another university can undermine your own applications.
Seven Questions Worth Asking
A growing number of colleges and universities now use hosted applications. Administrators should be sure to ask questions about the following issues before signing on the dotted line with a managed service provider.
1. Service Level Agreements: Does the hosting center offer five-nines (99.999 percent) or better availability? If not, what are the contingency plans to restore failed applications?
2. Backup Sites: Where are primary and backup sites located, and how is data moved between them in the event of an emergency?
3. Upgrades: How are software updates delivered, and do they trigger any system outages?
4. Data Protection: Where is student and university data stored, and how is it protected?
5. Financial Viability: How is the application provider funded, and what is its current financial standing?
6. Guarantee: What happens if the university isn't satisfied with the system? Is there an easy, reasonable path back to your old system?
7. References: What do staff at peer universities that are using the system have to say about pricing, performance, support response times, and the benefits delivered by the system?
Advanced Micro Devices, www.amd.com
Campus Management, www.campusmgmt.com
Centric CRM, www.centriccrm.com
Higher Education User Group, www.heug.org.
Kuali Foundation, www.kuali.org
Law School Admission Council, www.lsac.org
Research in Motion, www.rim.net
Revenue Accelerators, www.revenueaccelerators.com
RightNow Technologies, www.rightnow.com
Sakai Project, www.sakaiproject.org
Sugar CRM, www.sugarcrm.com
SunGard Higher Education, www.sungardhe.com
Joseph C. Panettieri, VP of editorial content at Microcast Communications, can be reached at firstname.lastname@example.org. He has covered Silicon Valley and higher education since 1992.