Tuesday Sep 17, 2013

Higher Ed ERP and Cloud

The past couple of weeks have been a relative frenzy in the ordinarily mundane world of higher ed "administrative" IT or ERP.  Most notable was the much-anticipated Workday announcement of an intention to build a SaaS Student Information System (Workday Student).  This caught almost no one by surprise given that their partner institutions are talking and their recent hires into leadership roles telegraphed this rather overtly.

The topic of Cloud and SaaS in education IT is one that I've devoted considerable air time to, both on this blog as well as in our forum with a number of global education partners (our Industry Strategy Council, or ISC, that meets twice a year).  Inevitably the conversation and discussion always seems to come back to a couple of key questions:

1) Will it lower costs?

2) Will anyone consume it if it's offered?

The attraction to SaaS applications in higher ed is almost always the allure of lowering costs associated with the acquisition, maintenance, upgrades, and management of an on-premise application.  Further, many I talk to actually admit that they'd love to use the SaaS vendors upgrade schedule (which is the upgrade schedule all of its customers will be on, like it or not) as the justification for business process standardization and implementation of strict IT governance (i.e. thou shalt not customize).  Meaning: We can't enforce the needed governance ourselves, so we need a SaaS solution to impose it on us, leveraging the justification of reduced costs.

There seems to be a perception that Oracle isn't part of the Cloud revolution in IT or has been "slow to adopt the cloud."  I am astonished by this given the facts, but perception is often reality.  But shouldn't we really be talking about, given the fundamental realities of higher ed institutions and their overall structure, SaaS is really workable in all cases?  Brian Voss in his recent blog post "On the Future of Administrative Information Technology" comments that many administrative systems in higher ed are reaching their 10 or 20 year anniversaries and that commercial vendors of IT for higher ed are discontinuing support for older products, leading to a potential wave of replacements in the coming years.  These same issues confront many commercial enterprises - what is different in my view is that higher ed has for the most part (and I am falling victim to something I generally despise - broad generalizations) been largely unable to contain costs and extract a great deal of value from admin IT because it lacks strong IT governance.   SaaS WILL NOT solve this problem.

One of the many business transformation partners that my team and I have worked with over the years is a firm called the Hackett Group.  For the winter meeting of the ISC I referenced earlier, representatives from Hackett in partnership with one of their clients (and ISC member) the University of Michigan, presented on the IT rationalization project they had embarked upon at Michigan and also generalized to the overall "world class" benchmark of higher ed vs. other commercial organizations that exhibited "world class" performance.  What was clear in nearly every category was that while higher ed overall has done a reasonable job containing costs, it still spends a preponderance of its IT resources on largely "transactional" (vs. strategic) functions - even higher in fact that what is exhibited by public sector (government) IT organizations in the US.

There is no question that the Workday announcement for a SaaS SIS will garner a lot of attention, and in fact it will have a positive impact on us as strong competition always has on the industry.  But I caution my colleagues, partners, customers, etc. not to get hung up on the shiny new object and lose sight of the real issue that has the greatest opportunity to enable higher ed organizations to realize value from strategic investments in IT: standardized infrastructure and systems simplification hold the key to IT truly becoming a strategic resource for the institution.


Comments, news, updates and perspectives from Oracle's global vice president of the education and research industry--which includes higher education, research, and primary/secondary education (K-12) organizations worldwide.


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