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On the Future of Administrative Information Technology

This is the first post in a new blog —“Got a Minute?”—that I will be writing from my perspective and position as EDUCAUSE Presidential Fellow. EDUCAUSE President and CEO Diana Oblinger asked me if I would use this platform to share some of my thinking on key issues and present some kernels around which the community could engage in broader discussion. My role, she said, would be to get the conversation started—even if I stirred up a little controversy in doing so. Be careful what you wish for, Diana!  I sought out the role of Presidential Fellow to do exactly that: advance the discussion of critical issues and challenges facing our profession in this second decade of the 21st century, at a time of disruption to the status quo of higher education.

One of the main items that I hope to help EDUCAUSE and the higher ed community explore is what we’re calling “Administrative Information Technology”—or “Admin IT,” for short. We used the phrase “Enterprise IT” for the past decade, partially because we felt that administrative was a word with too much baggage at our institutions. Well, based on my reading of Benjamin Ginsberg’s book The Fall of the Faculty, I think we were right: it is a word with a lot of baggage.  Nevertheless, it is the correct word and the baggage earned.  Thus, I believe that now is the time to return to that word and to focus on the true issue: the cost of administrative IT.

So let’s begin the exploration of an EDUCAUSE Administrative IT Initiative. Three points illustrate why such an initiative is critical for our community.

1.     Many administrative systems will reach their twenty-year anniversaries in the coming years of this decade. Although these systems have generally been updated regularly since they were implemented and can operate into the future, they are approaching the end of their functional life.  And some institutions (such as my own, UMD) are still using legacy 1980s-origin systems—catastrophes waiting to happen!

2.     Many commercial providers of administrative systems end their support for older products, even if those products have been maintained and updated. This typically happens as new products, with different functionality and/or architecture, establish themselves in the market.

3.     These two milestones—functional obsolescence and loss of vendor support—mean that many institutions will be considering restructuring or replacing their core administrative systems over the next few years. This, in turn, means that the stability of administrative systems will give way to 1990s-style uncertainty and change.[1]

We must also raise awareness that IT spending is done in support of functions across the institution, not just in or for information technology. As CIO at the University of Maryland, I spend many millions of dollars providing a host of services and provisioning much in the way of infrastructure—very little of which is used by me or my organization. I’m buying these items and providing these services on behalf of the campus community, for its consumption and based on its needs. We need to change the narrative away from “reducing IT costs” to “reducing the costs of administration and its attendant IT costs.”

We all have heard the horror stories of $100 million implementations of ERP. One might ask: Why are information systems so expensive? I do not believe it is because IT people are inefficient in their acquisition, development, deployment, and ongoing hosting of these systems. The spending is being done by the IT organization—on software licenses, system-integration expertise, and software-modification work—because functional areas and institutional activities demand customization of the systems for their specific and diverse wants (though termed “needs”). An ECAR study (not yet released) found that ERP projects involve as many non-IT FTEs as IT FTEs and that something similar can be seen with ongoing administrative system support. Projects took 43 percent longer in institutions whose functional units had high degrees of autonomy.

I believe that we are now in a period where a great many institutions will be considering, yet again, the prospect of spending a great deal of money on renewing their administrative applications. They will do RFPs and search for the lowest-cost option, but they will still spend millions of dollars individually and billions of dollars collectively on this effort. This will come at a time when they need those dollars to re-envision and revolutionize their teaching and learning in new pedagogical paradigms brought about by MOOCs and other elements of online education. This will come at a time when they will see shrinking research grant funding. This will come at a time when they will remain under the stress of reduced government funding, limitations on increases in tuition, and even reductions in philanthropic giving. In the popular vernacular, this will come at the time of a perfect storm of disruption.

Our colleges and universities are dealing with a significant disruptive event: online education.

One place where there is a lot of money being spent (and about to be spent) is in the area of admin IT. If we were to chart intelligent and collective paths forward, we could systematically reduce the spending in the areas of administration and thus free some funds to flow into the academy—to reallocate dollars from doing the “business” of higher education to performing the core functions of higher education.

EDUCAUSE and I believe we should focus on a critical question: How can colleges and universities find ways to significantly reduce the cost of administration and the attendant IT spending that supports it? If EDUCAUSE focuses its attention specifically on the IT elements (e.g., organization, people, spending), we will be addressing only part of the challenge; we will not be involving those who direct the nature of the work and require the spending of the money. We must expand our discussion to include these functional areas, perhaps via the various associations that serve them: NACUBO for finance and administrative functions, for example.

Below are some key questions to spur the community conversation about Admin IT. In upcoming blog posts, I’ll comment on particular aspects of this challenge, which will also help advance the broader efforts of the EDUCAUSE Administrative IT Initiative.  I encourage you to join the discussion and share your views and ideas – via comments to this and other posts I’ll make, or in response to surveys that EDUCAUSE will be distributing in the days, weeks, and months ahead.

I look forward to the coming dialogue and to our exploration of this critical topic.

Admin IT: Key Questions

1.     What are the core elements that might significantly reduce the cost of institutional administration and the attendant IT spending that supports it? Examples include the following:

a.      Realistic and pragmatic functional requirements

b.     Project management and development methodologies and roles

c.      Process and continuous improvement

d.     Sourcing strategies for staffing, systems, and services

e.      Management and organizational models

f.       Development of other critical capabilities and roles (e.g., vendor management, change management, or service management)

2.     What data is needed to benchmark and manage institutional spending on administration and attendant IT?

3.     What are the professional development (PD), research, and service tools that are needed to enable the community to significantly reduce spending on administration and attendant IT?

4.     What is the “argument” or “line of reasoning” that will create a compelling case for change?

5.     What goals should we have? Should we adopt the “50 percent reduction in such costs by 2020” battle cry?

6.     Who must our partners be in this venture?  And how should we engage these partners?  What challenges do they present to us (and which do we present to them)?

 


[1] Greg Jackson, ”Enterprise and Infrastructure IT at EDUCAUSE,” November 2012, http://net.educause.edu/ir/library/pdf/entsummary.pdf.

 

Comments

With his usual knack for zeroing in on critical issues, Brian shines a useful light on administrative computing cost.  And he's undoubetedly right that we need to have a better undertstanding of why the costs are so high and what, if anything, we can do about that.  But are we really approaching a turning point?  Perhaps not.  For one thing, although most enterprise system are 20 years old, they have been steadily evolving and, for the most part, keeping pace with users' needs.  More importantly, however, is the fact that our investments in these systems are deeper than in any other area of technology.  Moving to a better model, however valuable, would require a tremendous institutional commitment.  And, as the track record shows, very few institutions have abandoned their administrative systems in recent years in order to move to new ones (or new strategies.  The game changer, if there really is one around the corner, will require a paradigm shift to a lower cost, yet still customizable, cloud offering.  And one that includes a migration path from current systems that won't break an institution's back (or bank account).   If such an option exists and a few courageous schools demonstrate that it is a workable, safe, and cost-effective strategy, then we are likely to see a stampede....

There are salutory lessons everywhere

 

In a time when administrative units are demanding more functionality, yet unwilling to change the way they do business, Brian may be right but our institutions are not prepared for the actions required to meet the demands of such a paradigm shift. He is right that we (IT) are not spending our budgets on "IT" toys - eliminating personnel costs, less than 10 percent of my budget goes toward true IT needs such as professional development, management tools, and the like. We need to stop being impressed with the bells and whistles of new modules and third party add-ons to our Admin IT tools and start addressing the need to reform the way we are using our current tools to solve our institutional issues. In short, many of our institutions are using perhaps 20 percent of the ERP capabilities, and to get the most out of the commitments we have all made we need to commit to improving the way we do business (functions) and truly understand the capabilities of our current investments before crying for "modernization and upgrades. If we truly partner with our vendors and take seriously process improvements (IT and Functional areas) we can and should make our systems fit the realities of what we need to accomplish on a daily basis.

Perhaps another bullet in the Key Quetions section might be:

"How best to manage the increasing demand by governmental, accrediting and other bodies for data that aids in the demonstration of accountability and efficiency."

The "business" of a university as described by many higher ed administrators is not the same thing as the product of a university.  With that nuance in mind, an ERP's purpose is more easily considered.

First, a few rules of thumb:

  1. Systems work best when used to solve the problems they were designed for.
  2. Monolithic systems tied into key business processes are expensive to maintain.
  3. Monolithic system manufacturers want you to customize and tie their systems into every part of your organization.

 

There's no need to get rid of ERP systems.  However, we should only be using them for their core features:  HR, Financials, course and enrollment management, and payment.  ERP use over the last 20 years created a solid foundation for campus core data, something very few systems can lay claim to.  However, there are better and more modern ways to access that core data, and we should be using them.

ERP systems came of age before a lot of things:  before the Internet was huge, before there were things like web services, before there were lots of easy-to-develop-on frameworks for developers to choose from, and before the terms "agile" and "iterative" were commonly used in project management.  We should not extend the functionality of ERP systems beyond what they were designed for just because it's what we're familiar with.  We should not view ERP systems as a "sacred cow" above all other systems just because we spent a ton of money on it.  We should instead use the right tool for the job...and that includes the ERP system.

This is a good start to the discussion.  A few comments:

We consciously moved away from "administrative" to "enterprise" labeling on our campus when we saw the access and control move away from a few small core departments.  For example, there was a time when our Office of the Registrar produced every report and every mailing label regarding students.  The Office of the Registrar entered all grades.  That ability has now been widely distributed around campus, including deeply into academic units and, in the case of grade entry, to individual faculty.  The use of the data in the ERP is broadly distributed beyond the few departments traditionally considered administrative.  A change of ERP systems today would involve far more campus operations and departments, including many academic and academic support areas, than we changed administrative systems in 1990 and again in 1997.  Enterprise, as a label, is far more descriptive of the impact.

Paul Schantz makes a good point in that there's no need to get rid of ERP systems.  I'd probably word it slightly differently; a major change driver, justifying the cost of change, is not present.  In 1990, the change driver was moving away from custom-built solutions to package implementation.  This huge shift promised a "finished and completed" system, with a promise of getting something done at lower cost.  This was important on my campus, after spending years of trying to develop and never getting anything close to a finished and integrated system solution.  In 1997, the change drivers were more integrated modules, avoiding a year 2000 data issue that would have stopped operations, and the emerging web service environment (just on the horizon during the 1998 implementation). 

We've tried to identify similar change-drivers today, but are not finding reasons to change.  User-interfaces for the standard ERP solutions are falling behind, but our university would never be known for a state-of-the-art payroll-time-entry user interface.  We can develop improved user interfaces as needed by incorporating mobile platforms.  Unlike Paul's suggestion, though, we do see the value in keeping as much university data in our ERP as possible, as it reduces technical administration overhead, provides data access consistency, and therefore reduces costs.  In some ways, I see this as an update to the strategy used by many universities that succeeded with custom-built mainframe environments, and held on to those environments as authoritative data repositories and just added on web front-ends.  Now our server-solution is the repository and the new front-end is our mobile development.  And we can add on niche solutions, suited to meet specific needs, pretty easily with standardized data integration.  As suggested by thcarnwath, there would be return on investment in just fully utilizing the current ERP implementation.  There isn't a change driver to justify spending $100 million on a new ERP solution.

We seem to be increasingly moving away from these overhaul moments.  We are into gradual evolution of our system solutions, not into systems revolution.  We've changed our campus IT strategic planning to evergreen and constantly renewing, rather than a plan of fixed life, i.e., a "three year IT strategic plan."  That is true for our ERP environment as well, at least until a rewarding change driver emerges.  One campus leader suggested we were as likely to pick up and move the campus and all its buildings as we were to change ERPs at this time, and I can see that grounded foundation as a tough thing to consider changing, given all the other things around learning and learning outcomes that really need attention.

I love that brian is bringing this issue up and I think he hits a bullseye on many of the key points we need to consider.

The one thing I think we need to emphasize is how we bring innovation back to administrative functions. What we don't talk about is the fact many universities are still organized and silo'ed as if we were doing all transactions on paper, not electronically.

I'm a huge fan of the work Mitch Davis is doing a Bowdoin. Mitch, as CIO, has authority to go and improve business processes anywhere on campus that technology can make a difference. Few of us have that authority but even if we don't I think IT can drive innovation in administration.

I'll put in a plug for two thigs we have done -- integrate analytics and reporting outside the ERP and develop an identity strategy. The identity strategy allows me to quicky on-board new services - a reporting and analytics strategy allows me to easily integrate these new services into a comprehensive reporting strategy that includes ERP data. 

What we are doing with these two strategies is to transform administrative services. New cloud services get qucily integrated by requiring InCommon & Shibboleth. Building a strong analytics back-end allows us to bring data back into the data warehouse and povide additional data for decision making and business process redesigm.  

To Brian's point, while many of these SaaS are costly, they tend to provide tremendous bang for the buck in the way we do business. As long as they are additive to what we do and broadly enhance decision making and business processes.

jack

Admin IT is indeed important and valuable for growth of any country and indistries. We can go into such direction that reduce the expense on IT and at the same time improve their end result and benefits. There are still so many loopholes on that we need to work to get maximum out of Information Technology.

Thanks

galaxys6samsung.com

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