Collegiate Project Services
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With the growing number of options for SaaS (Software-as-a-Service) ERP systems in higher ed, many institutions are beginning to evaluate how or if these solutions fit in their technology landscape on campus. The important thing to remember, of course, is looking at SaaS ERP isn’t about making a technology decision, it’s about making a business-driven decision to better meet the needs of campus. The fact that ERP is deployed as SaaS is an important consideration, but not the central one.
So how are institutions reacting to SaaS ERP? While adoption is growing, it’s not taking off at a radical pace. Here we look at some of the reasons schools are switching to SaaS ERP and why many are still waiting to take the leap.
5 Reasons Institutions are Adopting SaaS ERP
Here are some of the leading reasons schools are moving towards a SaaS environment for ERP systems:
1. Standardization. Many schools are on a mission to ‘get back to vanilla’ and shed the costly customizations that have weighed down their existing systems. Most institutions don’t know the true cost of the modifications they’ve implemented, not to mention the opportunity costs of those modifications – specifically the missed chances to streamline and standardize.
2. Functionality. For many institutions who are running systems based on older technology, or perhaps older versions, the look and feel and feature/function set in a SaaS solution will seem like a huge leap forward. But in a lot of cases this is really a matter of a SaaS ERP being built with much newer technology than what’s currently implemented, not necessarily because it’s SaaS. But a leap forward regardless.
3. Funding Models. Shifting from a CAPEX (capital expenditure) model to an OPEX (operating expenditure) model presents an advantage for many schools, and can offer a lower-risk investment. But schools need to perform a comprehensive budget analysis to ensure they’re capturing all the associated costs that come with adopting a SaaS solution.
4. Lower Costs for IT Administration. With SaaS ERP, IT moves away from more tactical responsibilities in keeping systems running towards a more strategic role at the institution. This brings about significant opportunities for change management within IT and across those relationships with business units, but can especially benefit institutions with smaller IT staffs.
5. Technology. Lastly, SaaS ERP is built around forward-looking technology and promises accessible, consumable, scalable and integrate-able technology for institutions.
So with these reasons, why would institutions resist moving towards SaaS ERP?
5 Reasons Institutions are NOT Adopting SaaS ERP
Here are some of the reasons we’re seeing schools resist the idea of SaaS ERP – permanently, or at least for now.
1. Standardization Averse. Every institution is unique, yes. But many are not willing to let go of the idea that those ‘uniquenesses’ mean they need a one-off (customized) solution to perform the business of the institution. So many institutions shy away from the idea of standardizing their processes and prefer to customize an installed ERP rather than configure a SaaS ERP.
2. Risk Averse. Higher education institutions are typically ‘majority adopters’ for new technology – which means most institutions will wait for the ‘pioneers’ to chart the course and establish a sizable peer base before taking the leap to SaaS ERP.
3. Security Perceptions. Concern around the security of SaaS solutions tends to be an emotion-based issue rather than a fact-based issue in higher ed. Meaning that even though most concerns about security from a SaaS provider can be easily addressed by protocols and processes that outpace and outperform typical campus-based security measures, there is still a lot of ‘feeling’ that data and systems are less secure if hosted somewhere else. And that hurdle will take a long time to overcome.
4. Retain Control. Many campuses want to retain control of their systems and their data. In some cases, this is driven by IT not willing to ‘let go’ of their current investment of time and resources into the current system. And some others are not willing (or prepared) to adapt to the new skillsets that would be required to effectively manage an SaaS ERP.
5. Evolving Solutions. To date there isn’t a comprehensive or ‘full-suite’ higher ed SaaS ERP in production. There are leaders who are building them, with plans to rollout comprehensive functionality in the next few years, but many schools are deferring to the ‘wait and see’ approach before investing in a platform that may not address all of their administrative needs. In general, many institutions want ‘fully-baked’ applications to be ready for them, rather than participating in an evolving solution that will prove out over time.
Both sides of the coin have very compelling and rational arguments. So how can you navigate the SaaS ERP debate at your institution? We advocate for schools to start with institutional need – articulating how services to students, faculty and staff and institutional priorities are not being met by your existing ERP systems is the first and most critical step. Then schools can get better educated about what’s available in the market and how those solutions line up with institutional need, as well as institutional culture and capacity to make the significant switch to SaaS ERP.
What other factors are playing a part in your institution’s evaluation of SaaS ERP?
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Great article about the reasons institutions decide on SaaS or licensed on-site implementation, very useful for those individuals (faculty, staff and management)who are not familiar with the various ERP implementation options. Succinct and pertinent for any institution to use in deciding how to deploy their ERP.
Good blog. One more thing to think about before going to SaaS. Opex is forever whereas Capex is mainly one-time.
Thanks