Enterprise Resource Planning (ERP) software solutions provide to organisations of any size, sector or industry enhanced operational efficiencies, better business reporting capabilities, as well as improved customer service and supply chain management. In addition, the use of ERP solutions provide the opportunity to reduce operating costs and boost data and business continuity capabilities for any organisation, when cloud applications are used. Research suggests that ERP implementation led to process improvements for 95% of organisations while the top three benefits captured from such implementation were reduced process time, increased collaboration and a centralised data system leading to "one truth" [1].
Although the above benefits also apply to HEIs, their operational requirements are quite different from other types of organisations. For example, HEIs, due to their complexity of purpose, tend to have fragmented internal structures, experience challenges in measuring strategic outputs and outcomes and while they have a high degree of autonomy in some cases, in other cases are being under government dependence, mainly in terms of funding and sometimes regulatory compliance. HEIs find themselves constantly under pressure to deliver high quality education satisfying ever increasing expectations from their stakeholders while at the same time face considerable funding cuts. As a result, adoption of information technology that can improve the operational and organisational performance and reduce costs is perceived by all HEIs as necessary investment to remaining competitive in a global education market.
Many HEIs that are considering investing scarce resources in their digital transformation journey find often themselves pondering the usual"buy or build" management question - the dilemma of whether they should develop their own, in-house ERP software solution that meets their exact needs and match their internal processes or purchase a standard solution from one of the numerous vendors in the market that specialise in the HEI market.
My recent interactions with a number of private HEIs, reminded me that although every university may be different in terms of needs, target markets (local and international), educational programs, and access to funding, the challenges that are trying to address through an ERP solution remain very much the same,
...they all strive to have an efficient and effective means of interacting with and supporting their students' educational pathways prior to admission, during their studies, and after their graduation...
HEIs are in some sense "unique" organisations and their needs from an ERP solution go beyond the typical sales and marketing, supply chain management, HR and finance that any other business has. They include, among other tailored functions, student information systems that map, follow, support, and assist students during their educational journey. In this article, I thought to capture and outline some of the pros and cons of buying a standard ERP software solution for an HEI and compare them to the pros and cons of building an in-house one. Specifically, I wanted to consider the questions:
Considerations for buying or building an ERP solution
Of course, every HEI and situation are unique and specific advice should consider all of the above points. In general, developing an in-house ERP solution will demand from the HEI a lot of resources in terms of time, money and expertise and the decision to opt for such project should carefully consider whether the HEI is up to the considerable challenge and understands the specific benefits it is trying to gain. Outsourcing the ERP solution to a competent vendor, will certainly allow the HEI to focus its attention, resources and efforts to its educational mission and vision serving best its student community.
But, how does one choose a competent ERP vendor?
Costas Chryssou
MBA, PhD
Founder and Managing Director
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