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© Copyright: Al Dees & Patrick Voelker This work is the intellectual property of the authors. Permission is granted for this material to be shared for.

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Presentation on theme: "© Copyright: Al Dees & Patrick Voelker This work is the intellectual property of the authors. Permission is granted for this material to be shared for."— Presentation transcript:

1 © Copyright: Al Dees & Patrick Voelker This work is the intellectual property of the authors. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the authors.

2 The Benefits and Struggles of an ERP Collaboration Unique Institutions Working Together

3 copyright-2005: Al Dees and Patrick Voelker 5 independent, “friendly rival” institutions No corporate or association structure All institutions near or along a 10 mile stretch of Snelling Avenue in St. Paul, MN The Players

4 copyright-2005: Al Dees and Patrick Voelker We Are Different No. of Students Bethel4000 Macalester1865 Northwestern2500 St. Catherine4800 Wm. Mitchell1000

5 copyright-2005: Al Dees and Patrick Voelker We Are Different Degrees Awarded AABA/BSMA/MSDoctorate (Ed/Clin.) M DivJD Bethelxxxx Macalesterx Northwesternxx St. Catherinexxxx Wm Mitchellx

6 copyright-2005: Al Dees and Patrick Voelker We Are Different Religious Affiliation BethelBaptist General Conference MacalesterPresbyterian NorthwesternNon-denominational Christian St. CatherineCatholic Wm MitchellNone

7 copyright-2005: Al Dees and Patrick Voelker We Are Different Units/Subsidiary Operations with unique needs BethelSeminaries (3 locations) Center for Adult & Professional Studies MacalesterNone NorthwesternRadio stations St. CatherineNone Wm MitchellNone

8 copyright-2005: Al Dees and Patrick Voelker We Are Different Macalester –Stable business model –One campus –No student body growth Northwestern –Steady, undergrad student growth –Aggressive plans for alternative programming –Successful radio station –Multiple state operations St. Catherine –Two campuses –Undergraduate, weekend and graduate school –Steady growth Bethel –Steady undergrad growth –Multiple campuses –Growing graduate school William Mitchell –Stable model and size –One degree –One campus –Significant change in local competition Strategic Plans & Directions

9 copyright-2005: Al Dees and Patrick Voelker The Common Bond Utilizing the same ERP system/vendor Need to move to higher level of functionality than offered by current ERP vendor ERP system mission critical

10 copyright-2005: Al Dees and Patrick Voelker Initial Question Can independent organizations realize significant financial savings through collaborating in the purchase and implementation of an ERP system?

11 copyright-2005: Al Dees and Patrick Voelker Due Diligence Assessment IT Leadership –Without directive from nor involvement of the institutions’ presidents or other senior managers Identified 13 potential vendors Narrowed to 5 based on responses to a set of high-level questions Obtained “bid level” pricing from 4 vendors for individual purchases and 3 collaboration levels

12 copyright-2005: Al Dees and Patrick Voelker DUE DILIGENCE FINDINGS Projected Savings Level 1 –Joint bid request 4 - 22% ($0.25 - 2.2 million) Level 2 –Joint bid request –Joint training and implementation schedules 33 - 42% ($2.4 – 4.2 million) Level 3 –Joint bid request –Joint training and implementation schedules –Single contract … jointly owned/managed data center 30- 50% ($3.4 – 5.2 million)

13 copyright-2005: Al Dees and Patrick Voelker Institutional Engagement CFOs Presidents—individually Presidents’ Cabinets Presidents--jointly

14 copyright-2005: Al Dees and Patrick Voelker RECOMMENDATIONS Proceed on basis of Level 2 Collaboration –Joint bid request –Joint training and implementation schedules Proceed to involve user department representatives in: –Joint development of feature/function requirements –Joint development of scenarios for “scripted” vendor demonstrations –Joint evaluation of 3-5 vendors’ systems through “scripted” demonstrations

15 copyright-2005: Al Dees and Patrick Voelker We are NOT so “Different” Must haves –10 Department Groups Two meetings (4 hours & 2 hours) Consolidated five individual college top 10 “must have” lists into one Identified demonstration scenarios and/or specifications

16 copyright-2005: Al Dees and Patrick Voelker We are NOT so “Different” Business Process Flows –Developed by five teams Student Billing Student Records Non-personnel Operating Expense HR/Payroll Expense Development & Alumni Affairs

17 copyright-2005: Al Dees and Patrick Voelker We are NOT so “Different” Admissions Returning Students Financial Aid Registration Student Housing Student Billing New Students BUSINESS PROCESS FLOW STUDENT BILLING

18 copyright-2005: Al Dees and Patrick Voelker Demo Derby 4 Vendors 4 Consecutive Days 2 Formats –Department/area specific modules –Integration and data flow between modules

19 copyright-2005: Al Dees and Patrick Voelker One college bows out William Mitchell withdraws from group –Lower feature/function requirements –Costs for selected vendors not affordable

20 copyright-2005: Al Dees and Patrick Voelker We are NOT so “Different” Post-demo ranking/rating clearly identify two “front runners”

21 copyright-2005: Al Dees and Patrick Voelker But—Differences do affect vendor preferences

22 copyright-2005: Al Dees and Patrick Voelker Presidents defer decision Request CIOs & CFOs to: –Assess Vendor D in more depth given substantially lower initial bid –Obtain updated bids later in year

23 copyright-2005: Al Dees and Patrick Voelker Preference differences narrow College ACollege BCollege CCollege D Current LeaningVendor D Vendor CVendor D Feature/Function Fit Vendor D fits Vendor C more than needed Vendor D fits Vendor C more than needed Vendor C fits Vendor D less than needed Finance & Development Vendor D fits Vendor C more than needed Ability to pull it off Vendor D more comfortable EqualVendor D more comfortable Viability of Consortium Key! If Vendor C is only way to stay together, would consider if price comparable Key! If Vendor C is only way to stay together, would consider if price comparable Key! Would consider Vendor D if affordable, workable solution can be found for unmet requirements Key! If Vendor C is only way to stay together, would consider if price comparable

24 copyright-2005: Al Dees and Patrick Voelker Differences Require Compromise Presidents decide cost savings achievable through collaboration outweigh preference differences –Concur on Vendor D –Set 3 month deadline for approval by Boards

25 copyright-2005: Al Dees and Patrick Voelker Lessons Learned Institutional culture and affiliation have little impact on basic business processes Collaboration can occur at many levels Process provides many unplanned, unpredicted opportunities for collaboration

26 copyright-2005: Al Dees and Patrick Voelker Lessons Learned Collaboration can occur without a heritage of cooperation through an existing organization or a “strong-willed” collaboration leader Full realization of benefits does not occur until participants’ top leaders agree to collaborate

27 copyright-2005: Al Dees and Patrick Voelker Lessons Learned Vendors are willing to provide volume discounts to a group of non-affiliated colleges Money is the ultimate driver (binder)

28 copyright-2005: Al Dees and Patrick Voelker Lessons Learned Allow for loss of collaboration participants –Request pricing for two or more alternative groups in bid requests Collaboration takes time –Start thru initial institutional engagement14 mo. –Institutional engagement thru vendor selection15 mo. Total29 mo.

29 copyright-2005: Al Dees and Patrick Voelker Where are we Today? Negotiating contract with Vendor D Assessing whether hardware costs can be leveraged through collaborative acquisition Finalizing a project organizational structure Developing a collaboration agreement

30 copyright-2005: Al Dees and Patrick Voelker Additional Q & A Pat Voelkerpjv@nwc.edu Al Deesamdees@stkate.edu Bill Doyledoyle@bethel.edu Joel Clemmerclemmer@macalester.edu Steve Morrowsrmorrow@nwc.edu


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