What is the future of the ERP?

So what is the future of ERP? At one point during a panel discussion involving 3 other CIOs and IT managers, Ramon Padilla let the packed room know his thoughts on the matter rather succinctly; holding his android phone up to the crowd he remarked that last week an OS update had been downloaded and installed overnight while he slept. He woke up to a phone that both looked and functioned differently than it did a day before, and he honestly didn’t like it. And he will have to learn to live with it.

This is obviously an extreme example, but all four panelists (Ingrid Nuttall – Manager, Enterprise Systems at AUniversity of Minnesota – Twin Cities; Kemal Badur – Senior Director, Infrastructure and Production at University of Minnesota; Scott Krajewski – Director of It and CIO at Augsburg College and Luther Seminary) agreed that the future of the ERP, for a variety of reasons, looks like Software as a Service (SaaS). Why? Well for one, maintaining legacy systems is becoming increasingly burdensome to maintain, let along upgrade. One panelist mentioned a 10-year backlog on development when he was brought in as CIO. When asked when he would address that backlog he said “I’ll address it right now – we can’t.” With all the customizations that many schools have, audience members suggested that implementations can take up to 10 years to fully implement to satisfaction, using the term loosely. How far behind current technology trends will you be the time you are even close to happy? SaaS can help alleviate some of those concerns and timelines, but it’s not a magic bullet by any means, and carries with it a host of new considerations and issues.

Panelist Kemal Badur mentioned that Facebook is written in php, which is pretty surprising for a platform that supports billions. They have around 1000 php developers working to maintain and upgrade their site, and has the capital to hire more if needed. A quick poll of the room by the panelists revealed that all but one person in the room actually has more staff in IT than they did 5 years ago. Institutional ERPs might not support billions, but there are layers of complexity that are different institution to institution and rarely simple to navigate. Asking staff that are already stretched thin to upgrade, let alone replace on premise solutions would be folly without significant time investment or increases in staffing power for a skillset that typically draws high salaries.

So SaaS can alleviate some of these issues. Pristine environments, leaving minimal data footprints for the institution, automatic upgrades, and so on. Integration would also be easier with the use of API hooks, in theory anyway. But beyond the problems they solve, they also offer benefits above and beyond that. While you’re at the Annual Meeting, visit some of the vendors in the exhibit hall and check out their demos – the systems are fun to use (assuming you’re a data geek or a technologist). That means happy students, happy supervisors, and just an easier time working through the loads of data coming through your office on a daily basis.

But the panelists and the audience were quick to dismiss the SaaS as a magic bullet. For one, cost is a major concern. Scott Krajewski, as the only panelist from a small school, expressed some doubt as to whether incurring a monthly, operational cost would be better for his school long term over the capital expenditure that on an-premise solution would amount to. In addition, many institutions rightly have IT staff who are well-versed in SQL, database administration, and scripting languages. You’d be flipping their roles to business analysts, essentially, if you move to SaaS. You would also need people in with API coding knowledge, which is a completely different coding paradigm from what most institutions currently have in terms of personnel. And one audience member was also quick to point out that some states that have unions or state laws regarding how things function and what can and can’t be accessible by third parties provide a slew of new governance and staffing concerns for any potential adopter.  

So walking out of the panel, do we have a clearer idea of what the future of the ERP is? Putting it simply, with SaaS solutions you are likely trading one set of problems for another. Some schools may still find it easier, even without support, to continue using older legacy systems that they build their processes around as a result. But there is a lot of opportunity with SaaS for improved services that solve longstanding issues that many institutions have had with their ERPs for the past 15 years or so. And while it might seem like vendors might be providing software which prioritizes function over process, collectively at AACRAO meetings and user conferences, changes in process can be leveraged. To come back to the cell phone analogy, with the amount of communication that is necessary between any institution and their vendor to have a functional relationship, your office need not be subject to surprise overnight upgrades.  

Download the session handouts here.