Do You Need ERP?(2)

from Technology & Learning

In the business world, enterprise resource planning software keeps costs down and productivity up. Should districts follow suit?

Enterprise resource planning software does what school leaders have always wanted their computer systems to do: It sees all. By integrating every IT application an organization has—from purchasing and inventory control to payroll—ERPs create a single unified system.

Not only does this give IT managers a holistic view to what's happening in the enterprise, it also lets them track in one place the purchase, installation, and maintenance of every item the district owns.

Like any software product, ERPs come with a lot of baggage attached, particularly when it comes to time and resources needed for deployment and maintenance. To help you assess the pros and cons, T&L has compiled this list of essential considerations.

Instructional Technology Budget by Category

Instructional hardware is 42 percent and software is 15 percent of the instructional technology budget.

Districts spend most of their technology budget on instruction, with the remainder spent on administrative functions such as student information systems, payroll, and other administrative functions. This survey reports that about one-third of the hardware budget is spent on administrative hardware with about two-thirds spent on instructional hardware, as reported in other surveys.
—America's Digital Schools 2006

1. Does a centralized ERP solution make sense for your district?

According to Ray Wang, principal analyst with Forrester Research, the answer is yes. "All school platdistricts have some kind of finance and purchasing systems," he says. "Add in human resources and payroll and you can see why every district could benefit from an ERP solution."

However, "I don't think all districts should adopt ERP software," says Philip Brody, chief technology officer/assistant superintendent of Clark County School District in Las Vegas.

"Choosing whether to buy an ERP solution is not based on district size, because some ERP packages are designed for smaller environments," Brody says. "Rather, it's a question of the resources and personnel a district is willing and able to commit to the project." In the case of CCSD—the fifth-largest district in the country serving 293,000 students—all three final ERP bidders "estimated that 23 to 26 full-time staff members would be needed over a year and a half, and that we would occasionally need a few additional people for tasks like testing." For the record, CCSD installed a Sun Microsystems–based SAP ERP system.

2. How much do ERPs cost?

ERP systems are not cheap. For instance, Florida's Palm Beach County School District paid $25 million to install a PeopleSoft ERP platform, according to Computerworld.

Be warned: Some of these millions may have to cover after installation consultants, such as the one the PBCSD had to hire to remedy ERP-caused payroll problems.

If you're as big as the PBCSD, then the millions of dollars required to buy and implement an ERP solution are feasible. But what if you're a smaller district with shallower pockets?

In this case, the answer may be forming a consortium with neighboring districts to share the cost of a single ERP solution, Wang says. "In this way, each consortium member gets the benefit of using ERP but only pays a percentage of the cost to buy and run it," he says. Such consortia can help smaller districts get better prices on their purchases by buying in volumes large enough to win manufacturer and distributor discounts.

3. What are some of the implementation challenges?

For starters, there's the issue of time. "You should plan to take 6 to 12 months to fully implement an ERP system," Wang says. "Larger, more complex districts may need more time than that. Vendors such as Lawson and SAP have done this for clients."

Brody likens the demands of an ERP implementation to the maneating plant in the film Little Shop of Horrors. "They require a lot of human and IT resources to implement, integrate, and then maintain," Brody wrote in a 2005 article (see "ERP Resources"). "They always seem to be yelling, 'Feed me!'"

A case in point: CCSD purchased a storage area network (SAN) with 3.5 TB to support its ERP. At first, the ERP installers said this would be sufficient for several years' storage, then they came back six months later and asked for 3.5 TB more. Besides storage, school districts may also have to upgrade and expand other components of their network to support ERP software. Be sure to ask for detailed systems specs from potential vendors before agreeing to any of their bids.

4. What's the bottom line?

ERP systems are expensive to buy, implement, and maintain. Yet over time they have the potential to pay for themselves thanks to the streamlined systems management, purchasing control, and efficiency they provide. In this way, an ERP system is like a good marriage: You have to invest a lot in time and effort, but you get a lot in return.

James Careless is a freelance journalist based in Ottawa, Canada.

This article originally appeared in T&L's February '07 issue.