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Need for management information. One compelling reason for an institution to face the challenge of implementing a new financial system is the need to have reliable, accurate, timely, and useful information on which to base decisions. The importance of having a financial system with these characteristics cannot be overestimated in terms of the value to faculty for timely information on grant balances, to academic unit administrators for optimizing the use of their resources, to managers of self-funded enterprises such as bookstores and student housing to manage their bottom lines, and to college presidents who may oversee macro-level allocations, budget reductions, and new opportunities across the institution.
Aging technology. An institution that has used the same financial system for the past 20 years will likely recognize that technology available today can provide capabilities not possible with the aging technology employed by its current systems. Given dwindling resources and increased competition for enrollment, it is becoming very important to be more responsive to the marketplace and to have systems that enable more efficient and effective administration. Thus having the ability to separate transaction systems from decision support systems, and/or migrate from character-based interfaces to intuitive graphical interfaces may well be drivers for changing the financial system.
High costs. The costs associated with maintaining legacy systems can be a key motivator to move to a new financial system. These costs can include the cost of maintaining the hardware of a proprietary mainframe-based system, the cost of maintaining and enhancing the software of the legacy system, the cost of not having a flexible system that will enable streamlining of key business processes, the cost of not managing cash balances in an optimal fashion that maximizes interest income and minimizes working capital expense, and even the cost of providing electricity to the legacy systems.
New leadership. While colleges and universities are charged with the discovery of new knowledge and the dissemination of knowledge, they can also be remarkably slow to recognize and correct inadequacies in their information infrastructure. Often such a change is prompted by the arrival of a new president or chancellor, a new director of information technology, a new accounting officer, or a new senior administrative officer.
While many of these stakeholders may complain about current aging financial systems, the steering committee must not mistake such complaints as a signal that the case for change has been made or is self-evident. This distinction is subtle but important. These are the systems people "love to hate," and business systems, practices, and infrastructure that people love to hate are systems around which fundamental elements of organizational culture arise. While we all complain about a fiscal closing process that occupies three months of every year, the process is nonetheless the one we know best, and our jobs are defined by such disagreeable systems.
Thus, developing a sound business case for change is an essential and early responsibility of the committee that will guide the development and implementation efforts, especially through the times when doubt surfaces in the face of the reality of difficult change. The particulars of the business case will vary greatly from one institution to another and will embody the highest-level institutional objectives and aspirations both in the area of financial management and in the specifics of the existing financial operating environment. In spite of this wide variation, the process of building the business case has a number of common elements.
First, the steering committee should identify in specific terms the principal stakeholders of the institution's financial system. The essential point here is that the financial system is a nearly ubiquitous manifestation of the institution's business architecture and, as such, affects -- directly and indirectly -- surprising numbers of people. In addition, the steering committee must recognize that the institutional culture is not monolithic; that is, various stakeholders are affected differently by the financial system. These stakeholders will have different views of the existing financial system, different needs and aspirations about the future, and consequently differing assumptions about the need for change and the nature of the needed change.
One methodology for "mapping" the views of the college or university community regarding both the existing financial system and high-level future aspirations is the deployment of interview and focus group teams. Typically, organizing for this activity will reveal stakeholders such as the following:
While most of these stakeholders will have some representation on the steering committee, it is a good idea to survey or organize focused discussions with other individuals from these groups to elicit their views about their current and future financial management needs. Not surprisingly, this review will reveal both common and divergent needs and wants. What the steering committee learns about universal views and particular views will inform the overall financial management vision of the future financial environment, will help set early project priorities, and will guide the development of an institution-wide communication strategy to support the project. Table 1 illustrates how the information elicited from a few hypothetical stakeholder discussions can be organized to reveal both common and divergent perceptions about the existing financial system and the needs or beliefs about future change.
The focus group and interview approaches can be supplemented with easy-to-use surveys of stakeholder needs, beliefs, and satisfaction with the existing financial system. Information from such surveys can also go far toward preparing the ground for change, including broad elements of the institution in the process of change, and building a tangible and compelling case for change (or not!).
The deployment of processes to elicit the differing views of the financial system does not need to be analytically rigorous, or expensive. Remember, the purposes of this activity are to: (1) prepare the ground for change, (2) convey that the process of change is intended to be inclusive, (3) uncover high-level commonalities and differences of views, and (4) supply "back of the envelope"-quality information to help the steering committee members understand potential priorities and pockets of potential project support or resistance. If resources permit, the use of outside facilitators to conduct this early discussion will go far in building objectivity into future project plans and actions.
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