More than “Going Live”: Achieving Institutional Transformation through ERP Implementation

Budgets, Costs, and Resources

Consider the balance of costs against institutional goals. Although it didn't come up as the most commonly reported concern for institutions that have completed (36%) or are currently implementing (26%) a new ERP system, budget overruns and extra costs were a common concern for committed institutions (49%) and were the most reported concern for institutions interested in replacing their system (76%) (see figure 10). For those interested in changing ERPs, not only was cost their primary concern, it was also the greatest barrier preventing them from moving forward. This is perhaps unsurprising when one considers that, aside from constructing a new building, an ERP implementation is likely to be one of the most expensive projects an institution will undertake. Institutions must weigh the substantial costs of these projects against their goals and strategic mission to determine if this investment makes sense.

Figure 10. Concerns about Budget Overruns and Extra Costs

New cloud ERPs can eliminate some costs but will mostly shift them from capital to operational expenses. Interviewees reported cost considerations as a key factor in deciding if and when to change ERP systems. This illustrates the importance of forging a partnership between the chief financial officer and IT leadership throughout the implementation. Some institutions were facing massive technical debt due to their legacy systems, maintaining an overwhelming number of customizations and keeping on top of regular updates for hardware and software. Many leaders hoped that shifting to a cloud-based ERP would eliminate a lot of these costs but ultimately found that it shifted their costs while opening new doors for development and collaboration for IT.

The most common cost-related issues cited by interviewees included:

  1. Upfront costs: Hardware and infrastructure costs are among the most significant costs institutions see an opportunity to eliminate. Hardware costs vary depending on the size and complexity of the institution's IT infrastructure, as well as the level of hardware required to support the ERP system.
  2. Human resource costs: Interviewees reported additional short-term staffing costs, including the cost of hiring consultants, project managers, and backfilling other personnel to assist with the implementation process.
  3. Customization costs: For non-cloud systems, customization can significantly impact implementation costs. Modifying the system to meet the institution's specific needs is often time-consuming and requires additional resources, both initially and for ongoing management to accommodate any base product changes. The cost of customization can vary depending on the complexity of the changes required, ranging from low-cost work, such as adding new data fields, to high-cost changes such as embedded or unique, bolted-on functionality.
  4. Training costs: Adequate training is crucial to ensure faculty and staff are prepared to use the new system effectively. Training expenses can include the cost of training materials, trainers, and support personnel and may vary based on institution size, number of users, and the required level of training.
  5. Integration costs: Integration with existing systems can also impact the cost of an ERP implementation. This involves connecting the new system to existing databases, applications, and other systems used by the institution. The cost of integration can vary depending on the complexity of the integration required (e.g., real-time, one-way, two-way, uploads/downloads). Integrations can be challenging to implement, and additional resources may be required to ensure the integration process goes smoothly initially and for ongoing management to accommodate any base product changes to either of the interfaced products.
  6. Ongoing software costs: In a cloud or software as a service (SaaS) solution, maintenance costs are replaced with ongoing annual subscription costs, which is one key area where capital expenditures move to operational costs. Additional costs should also be budgeted depending on the vendor technical support and training services needed for your institution.

Preparing for these costs, both the monetary aspects and time required, requires a great deal of insight and future planning. However, with any project of this size, issues and unexpected challenges can arise that cause delays or lead to going over budget (see figure 11). Extra time spent on preparations before beginning an implementation, as well as regular communications and updates during the implementation, can help mitigate these issues, but sometimes issues will arise that cannot be prepared for and institutions can only try to adapt to manage them.

Figure 11. Causes for Budget Overruns and Implementation Delays
Figure showing reasons why implementations go over budget (unplanned consultants, unplanned customizations, staff turnover and training costs, change in leadership, changing vendors/partners mid-project, unrealistic timelines, and external events) and reasons why implementations get delayed (change management, staff not comfortable with new systems, underestimated complexity of customizations, changing vendors/partners mid-project, changing requirements, external events, and incomplete business process knowledge.

Backfilling roles helps ensure a successful ERP implementation. Backfilling roles—that is, temporarily filling a position to free up an employee to support the ERP implementation—helps maintain business continuity and ensures that critical business processes and tasks are sufficiently staffed to minimize disruption during the implementation. This can help ensure a timely implementation by minimizing personnel losses due to unexpected absences or reduced availability of ERP-focused staff. Backfilling also can ensure that key personnel with specific skills or knowledge are available to assist with the implementation.

More than just a productivity solution, backfilling also has implications for staff's mental well-being. Interviewees reported that backfilling helped improve morale among employees working on the ERP project because it balanced their workload, allowing them to focus on core ERP duties while other people support day-to-day operational responsibilities, thereby helping reduce feelings of being overwhelmed and stressed.

Interviewees highlighted several promising practices for backfilling roles during an ERP implementation:

  • Start planning for backfill roles early. The sooner you start planning, the more time you will have to find qualified candidates and make arrangements for their transition. An early business process review can help identify areas where backfilling can be most useful.
  • Consider all of your options. There are a variety of ways to backfill roles, from temporary staff to consultants, and needs may vary across departments. Be sure to consider all of your options before making a decision.
  • Be flexible. Issues and challenges will arise during multi-year implementations, so be prepared to make adjustments to your team or bring in additional staff or consultants as needed.
  • Communicate with your team. Keeping your team informed of your goals, progress, failures, and successes will buoy morale, ensure staff are on board with any changes, and help with project and team staff retention.

Moving to the cloud…or not. Moving to the cloud was not a primary motivation reported for implementing new ERP. The unique needs and circumstances, especially when it comes to customization, mean this is a decision that needs to be weighed carefully and informed by an early needs assessment. It is important to understand that not all vendors provide on-premise solutions, and many of those that do are working to have their clients move to a hosted/cloud environment.

Interviewees commonly reported both benefits and concerns about moving to a cloud system:


  1. Reduced or shifted costs: Cloud ERP systems are typically subscription-based, which means that institutions will see pricing structures based on staff/faculty user count for Finance/HR/HCM/Payroll and FTE counts of Student for SIS as published in IPEDS. Since these systems are maintained and updated by the vendor, many institutions moving from on-premise to the cloud reported that they were able to shift costs away from maintaining life-support on old systems once they could be decommissioned and can now spend their resources developing more business analytics and solutions for departments across campus.
  2. Auxiliary solutions: Vendors aim to provide solutions that can meet institutions' numerous and varied needs. An ERP implementation should be used to evaluate the institutional needs aligned to a reconciliation of capabilities and functions required that should permit the retirement of any number of current auxiliary products. This would also reduce the number of physical data repositories for data management and reporting. This has the added benefit of providing a common user experience for students, faculty and staff, and likely one that is more streamlined, since newer systems tend to have a more modern design and user interface.
  3. Integration: ERP vendors continue to enhance their system's capacity to integrate with other cloud-based software and applications, since additional solutions will always be needed (e.g., LMS, Events, Housing, Advancement, etc.), and are vastly more effective when interfaced with the ERP.
  4. Scalability: Cloud ERP systems can easily scale their computing power up or down, as needed, which would otherwise require an institution to invest in more on-premises system hardware. If a college or university has changing needs, subscriptions can be increased based on staffing and new enrollment counts to accommodate growth.


  1. Customization limitations: True cloud ERP systems will have customization limitations compared to on-premises ERP systems, which could restrict the institution's ability to tailor the system to its specific needs. This isn't necessarily a bad thing, especially for HR and finance, where the cloud systems are designed based on reliable best practices that have been tested and proven, not just in higher education but in organizations across public and private sectors.

    Recall that two of the primary drivers compelling institutions to move to a new ERP include the lack of ability to meet functional needs and the challenges to support the current solution. There is no question that many support challenges stem from legacy customizations. In pursuing a new ERP, institutions need to lean into modernizing business processes and leveraging the configurability of the modern ERP, including the SIS domain as designed. Otherwise, you might customize and end up where you started. Choosing an ERP system that can meet both your institution's current and future needs becomes a central consideration when selecting a new system.
  2. Security and privacy concerns: Cloud ERP systems can raise security concerns because sensitive data are stored off-site and accessed through the internet. Most ERP vendors have robust security measures in place to protect data, and each institution should investigate its chosen vendor's data storage location and security practices to ensure the vendor meets institutional needs and regulatory requirements. For instance, most ERP vendors supporting U.S. institutions have committed to storing institutional data physically in the United States. Typically, ERP vendors have made security and disaster recovery investments at a level most institutions can't afford, which is a substantial benefit. Institutions remain responsible for ensuring the security and privacy of sensitive data through controls and, in the United States, Family Educational Rights and Privacy Act (FERPA) policies and practices. Many institutions reported feeling more secure after their implementation due to the changes in business processes from their legacy systems.
  3. Migration challenges: Changing ERP systems will be challenging, requiring significant resources and time. Exploring these challenges was a primary reason for conducting this research. For more information, see the sections on Institutional Culture and Pillars of Readiness.
  4. Reporting: Most interviewees, especially those moving to a cloud provider, reported extra work after the go-live date to figure out how to provide all of the reports that end users relied on from the legacy system. The majority of business processes can be changed, removed, or adapted, but interviewees reported that there were always some that required more work or external reporting capacities to fulfill their needs.

Planning for changes to roles and responsibilities post-implementation. Institutional leaders should expect to continue dedicating a significant focus on recalibrating processes and configuration for the first year or two after go live. The monumental level of change required to adopt these frameworks is rarely perfectly aligned to institutional needs after go-live. Many successful institutions are still refining processes after go-live, and interviewees recommended planning to reserve resources to help stakeholders finalize their shift to the new and changed business processes, especially to help provide key reports and data that aren't available in the new system.

How Backfilling Roles Has Helped Grand Valley State University through Implementation

Planned and added strategic roles in IT, HR, and finance. Grand Valley budgeted for up to 12 temporary positions to be added university-wide, strategically placed in areas that would be the most impacted throughout their HR and finance ERP implementation.

"Many people we talked to did not backfill roles during their implementation. They tried to just buckle down and get it done, but that had a heavy cost of burnout on their employees."

Offered flexible funds to departments and business units. Funds could be used to pay consultants to work with their current staff, bring in short-term contractors, or hire full-time temporary employees.

Committed to transparent and up-front communications. The university made clear that project-funded temp positions were only funded through the end of the implementation. However, it's anticipated that these employees, through project work, will have received training and institutional knowledge, making them sought-after candidates for permanent positions that may come available through common attrition.