What Others Are Doing

The following is a brief, high-level look at what system replacement alternatives have been selected by other higher education institutions and the state of Washington. This type of comparison can be useful in understanding the various approaches and their relative costs. Numbers included are only preliminary estimates from institutions’ Web sites, and should not be viewed as complete or final. They are being provided for context only. The charts below provide a quick overview of the systems of other peer institutions and the state of Washington; details are given in the sections that follow.

Systems used by other peer institutions:

Systems used by the state of Washington:

UW Peers

An analysis of 30 of the UW’s peer institutions reveals that few have older systems than the University of Washington. In fact:

• Only one out of 30 peer institutions has an older financial system than the UW.
• Only two peers have an older student system.
• Only four peers have an older HR/payroll system.

A majority of these institutions have replaced their legacy systems over the past ten years with large vendor solutions, or Enterprise Resource Planning (ERP) systems, especially in the financial and HR/payroll areas. The two ERP systems selected most frequently are Oracle and Banner. Of the few homegrown systems remaining at the UW’s peer institutions, most were built before 1990.

The following table shows the approaches taken by the University of Washington’s three peer comparison groups: 1) Higher Education Coordinating Board (HECB) Peer Group; 2) Washington State Office of Financial Management (OFM) Peer Group; and 3) Global Challenge Peer State Institutions (state flagships with medical schools).

Administrative Systems Used by Peer Institutions
33 Universities	Financial	HR/Payroll	Student
Homegrown system	19%     (6)	28%       (9)	42%    (13)
Oracle ERP	44%   (14)	47%     (15)	19%      (6)
Banner ERP	28%     (9)	13%       (4)	35%    (11)
SAP ERP	3%       (1)	6%         (2)	0%        (0)
Other vendor system	6%       (2)	6%         (2)	3%        (1)
Average year of ERP implementation	1998	2000	1994

Of the peer institutions that have ERPs in all three areas (finance, HR/payroll and student), seven use the same ERP in all the areas, and eight institutions employ a mix of ERPs. For example, the University of Illinois system replaced all three areas with Banner. The University of Minnesota replaced all three areas with Oracle.

Some universities that have been following a strategy similar to the UW’s of supporting and strengthening their legacy systems now seem to be considering ERPs. In 2006, UCLA’s strategic plan endorsed retaining and strengthening its legacy systems, but acknowledged that it must start to prepare for an eventual move to an ERP. The 2007-09 budget request included $700,000 for preparation planning.

Michigan State, the only university with an older financial system than the UW’s, authorized replacement of its legacy systems in 2006. The University selected Kuali financials and SAP for its HR/payroll system, according to its Web site. Target implementation date is 2009-2010. Michigan State was also one of the five institutions with an older HR/payroll system than the UW.

The Washington State University (WSU) strategic plan, updated February 2007, called for a review of alternatives for legacy system replacement, and development of a replacement/upgrade plan, including a timetable and funding strategy. WSU requested a scoping study to replace financial and student systems, estimating the implementation cost at around $60 million.

Higher Education Consortia

As an alternative to commercial ERPs, some universities are joining consortia to build administrative systems that are specifically designed for the higher education environment. The Kuali Foundation is an example.

The Kuali Foundation is a collaborative effort between numerous universities, including Indiana University, University of California, Massachusetts Institute of Technology, and Michigan State University, to create a suite of open-source administrative systems to meet the needs of Carnegie Class institutions. Currently the foundation has four partnerships focused on developing systems in the following core areas: financial, research administration, student, and endowment management systems.

Kuali Foundation Student System

The Roadmap strongly recommends that the University of Washington join the Kuali Foundation as a founding member and participate in the development of the Kuali student system. This is a unique opportunity for the UW to partner with other Tier 1 peer higher education institutions to develop the next-generation student system. Current founding partners include the University of British Columbia, University of California, (Berkeley), University of Maryland (College Park), Florida State University, San Joaquin Delta College, and the University of Southern California.

The UW’s current student administrative system is a 26-year-old homegrown legacy mainframe application that is inflexible and does not collect the information critical to effective operations and decision making.

A next-generation student administrative system has the potential to substantially improve the educational quality and experience for UW students. The new system will provide better tracking of educational outcomes against expected performance, which will enable the UW to raise the bar on developing new educational programs and instruction methods. The UW’s current system does not have those capabilities.

Joining the Kuali Foundation now will give the UW a voice in deciding critical design issues so that the final product has a high probability of meeting UW needs. This early involvement also will enable the UW community to leverage the resources of partner institutions in redesigning student administrative processes to maximize efficiencies and flexibility.

State of Washington

The state of Washington is following the trend of replacing legacy systems with ERP implementations. The state recently replaced its HR/payroll system with an SAP solution at a cost of $67 million. The state is now considering replacing its legacy financial and accounting system and is considering SAP as a possible solution. The need to replace its financial systems was a key recommendation of the state’s recent strategic plan for finance and administration, the "Roadmap for Washington State Financial and Administrative Policies, Processes and Systems."

As part of this effort, the Washington State Office of Financial Management is currently engaging all state agencies, including higher education institutions, in projects to define common data and a new chart of accounts. The UW is participating in these activities.

In addition, the UW is actively engaged in conversations with the state and Washington State University to understand what each is planning in this area and to explore possible partnerships.

Continuing this active engagement will be important to ensure that the UW’s plans remain aligned with state efforts. Any large information management or administrative systems project that the UW undertakes will need to receive approval from the Washington State Department of Information Services, and in the case of financial systems, the Washington State Office of Financial Management.

State Resources:

Roadmap for Washington State Financial and Administrative Policies, Processes, and System is available at:
http://www.ofm.wa.gov/roadmap/default.asp

The State Strategic IT Plan is available at: http://dis.wa.gov/news/publications/IT_Strategic_Plan_2008.pdf

This source of this data is the 2007 EDUCAUSE Fact Book augmented by information from other higher education sources. The analysis of more than 30 institutions included 24 from the Washington State Higher Education Coordinating Board’s list of UW peers, 8 from the state of Washington Office of Financial Management list of UW peers, and 11 from the UW Global Challenge list of peers.