Summer is here and with it all the peace that comes with an empty campus. It’s a time to reset and simplify anything that has built up over the previous year. At universities across the world, it’s often a time that leadership starts thinking about implementing a Cloud Enterprise Resource Planning (ERP) system.
In any organization, the decision to move to a Cloud ERP system is about simplifying, but especially at Higher Education institutions. The job of consolidating the processes and needs across different campuses is complicated and tedious. So, it follows suit that University Deans and CFOs typically make it a priority to use as much native functionality of that ERP as possible to further simplify the process.
CFOs and CIOs agree on the goal of maximizing Cloud ERP’s investment by utilizing all its functions. But they also recognize it should reduce any strain on the time and resources of tech teams. Experienced IT shops understand that Cloud ERPs are designed to lack depth in key modules, and integrations will need to be created and maintained. To understand which integrations are necessary, and to manage scope and ensure strategic planning, the university will examine processes in Finance, HR, and Procurement across their campuses.
A key question to consider… is whether IT is staffed and prepared to service the full cycle of buying and paying for goods and services, amidst other critical priorities?
Going Native
Going Native means only using the Cloud ERP’s functionality and not relying on third-party systems to perform other operations/functions your team might need. For procure-to-pay, this means the Cloud ERP will have to handle the shopping/catalog/punchout experience, p-card transactions, and electronic PO and invoice distribution. Instead of the ERP being the primary accounting vehicle for PO and Invoice activity, it’s stretched to function as a front-end operational tool for all the different users across the organization involved in the source-to-pay cycle.
Though going native might seem simpler at the onset, higher education institutions need to consider the significant changes in procurement and accounts payable (AP). When modules like General Ledger, Asset Management, or Grants are created, they mainly serve a small group of specialized users. But when source-to-pay modules are added, it can expand the user base by 2 to 5 times.
A key question to consider when going native is whether IT is staffed and prepared to service the full cycle of buying and paying for goods and services, amidst other critical priorities that a new financial system (and HR system, if it’s in scope) brings with it?
Migration of Responsibilities
Some organizations opt to transition their procurement and AP functions to the Cloud ERP after seeing what appears to be comparable functionality with punchouts, catalogs, requisitions, and workflow. As more detail emerges about what the Cloud ERP does and does not do for each department, IT teams find themselves suddenly and unexpectedly absorbing more responsibilities that for years had been outsourced to procurement solutions, such as JAGGAER.
The primary example is in catalog and punchout set-up and maintenance. Cloud ERPs don’t offer a supplier network, which means there are no supported services for procurement and suppliers to set up, maintain, and troubleshoot punchout catalogs and electronic PO and invoice distribution. Every punchout must be set up via IT with the Supplier. Every failed PO must be troubleshot and resolved by IT. So, let’s say a large supplier calls AP one afternoon saying that 400 invoices failed to transmit electronically and are now overdue. Now the IT department must drop everything to work with the supplier’s IT to resolve an AP issue. This time sensitive and time intensive work usually takes at least one full-time employee to support in a medium-sized org. Making the cost of a cloud ERP system radically more expensive, with just one expansion.
Additionally, tech teams will have increased accountability to navigate and resolve the complaints and frustration that are likely to come from a large, decentralized user group trying to achieve different things on a platform that was only made for a few things. Procurement teams who would historically partner with their third-party source-to-play platform and industry peers to create day-to-day experts in the system now turn to IT to release new features, and furthermore, point various end user groups to IT to resolve their own issues related to Procurement in the Cloud ERP.
This has created such a continuous strain on tech teams that some of the earliest Cloud ERP adopters are turning back to procurement solutions after years of struggling with a degraded procurement experience and frustrated end users.
ERP Out-of-the-Box vs. Plug-and-play
Fully vetting a Cloud ERP’s native functionality, with the participation of all departments, is the primary action organizations should take before anything else. The key is to look at your needs, and the ERP functionality in detail and catalog the differences in each user experience.
However, integrating with a specialized Procurement platform, like JAGGAER, provides the smoothest path. Especially when considering a front-end solution that is stable and serving a large, decentralized population.
While integrations would be needed, the strain on the IT teams is still lowered with out-of-the-box APIs that plug JAGGAER directly into the ERP, i.e., no more customized integrations.
Conclusion
When universities truly analyze native Cloud ERP functionality with the required IT resources to set up and maintain custom integrations plus the additional FTE needs, the math doesn’t math on the financial outcomes of implementing a Cloud ERP.
However, by leveraging standard API solutions such as JAGGAER, you’re able to serve a larger decentralized user base, while still reducing the strain on your tech teams. Leading to more efficient processes, and savings across the board.
Making these connections early in the project while collaborating with leaders in Procurement, IT, Finance, and PMO to consider these factors gives your transition a greater shot at a smooth rollout and a quicker return on investment.
