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There are major changes in the national higher education landscape coming very soon related to enrollment, demographics and cultural. Private higher education institutions are looking at flat or decreasing net revenues over the coming years. With the demographic changes ahead, seriously impacting our institutions now that will be hitting hardest in 2026 and years after, private institutions are trying to find ways to collaborate with other institutions to save money and staff time.
We currently have 32 private, non-profit HESS Consortium institutions interested in creating and participating in a "shared ERP services operation." As our planning process develops will be seeking partners in this feasibility study as well as solutions selection. Another major goal for our group is finding a grant funding partner that can help our private colleges and universities develop and adopt this new paradigm in ERP operations nationally.
Many smaller institutions are desperately looking for ways to share services, expertise and staff resources to lower technology costs, specifically in their enterprise resource planning (ERP) systems. As a former CIO in higher education and a leader with the HESS and E&I organizations, I believe that it is time to discuss a new concept, centered on shared technology operations.
This could be done in several different forms but all of these should be focused on information technology systems, operations and resource sharing to help institutions interested in joining an effort to develop an innovative and financially sustainable approach to ERP operations for our small and mid-sized private institutions.
We know that this model will not be possible for every institution, but we want to give energy to this concept if there are HESS institutions interested in partnering together in this way.
We have two functional groups of HESS Collective institutions - 1.) the research and development working groups and 2.) the review and response group. The group below are the members of the research and development focus team working groups:
Current HESS ERP Collective Shared Services Leadership Working Groups
* denotes working group chair(s)
The primary question that this document will ask is “is it possible for a group of HESS institutions to work together to move to a consolidated and “shared” cloud-based, cloud-native ERP solution to find economies of scale in our technology operations. Some of these economies of scale include:
We believe the key to the long-term success of the project is working together and building on the experience, documentation and implementation/ operational resources of the pilot institutions and those institutions in the following phased cohorts to lower overall costs and ease implementation for each institution in the future. We intend to standardize our "common structure model template" to best business and IT practices to ease implementation and training and hone the model in each member implementation.
Illustration 1: Resource and Staff Sharing
This is a complex project concept and, in reading this, you may be thinking that the idea isn’t feasible. Keep in mind that these types of shared services have been done for decades. Even though these other ERP shared services projects have been centered around shared datacenter installations with staff and hardware/facilities overhead, times have changed. Now that systems and operations are provided by many solution providers in the cloud and communications via web conferencing are quick and easy, there is little need for a shared facility with staff, servers and equipment overhead to operate a shared system outside the vendors’ services. In concept, staffing and expertise in colleges and universities inside a cohort could do the work necessary to implement, manage, enhance and support systems for multiple institutions. Staff resources could be shared between institutions while some institutions could reallocate staff to customer-facing functions. Some institutions, in theory, could eliminate or reduce positions connected with ERP operations and lower their overhead costs.
A COMMON STRUCTURAL FRAMEWORK MODEL
The operational model is centered around the "Common Structural Framework Model" that includes 1.) Core Database and Reporting platform, 2.) Student Information System and Portal, 3.) Finance/Accounting, 4.) Human Resources and 5.) Student Financial Aid (see illustration 2). As we develop the model, it could include other software needs such as housing, LMS and CRM.
Illustration 2: Common Structural Framework
This concept cost model would include 1.) implementation, installation, and migration costs, 2.) support and training costs, 3.) on-going maintenance and licensing costs and 4.) enhancement and upgrade costs. All servers, systems and storage would be provided through the solution provider or through 3rd party cloud services eliminating the need for on-campus equipment and storage necessary for the ERP itself.
General questions for exploration in how a cohort might work together in this cost model would include:
After the core common structural framework is built for one model institution, the model could be economically replicated in the cloud for other institutions (see Figure 3 below). All institutional data would be segmented and separated within database tables and stores, eliminating any possibility of co-mingling student, financial and human resources information with other institutions. All confidential data would be kept confidential to its institutional owner although shared database administrators (DBA) may require their having access to institutions’ data for operational, reporting and auditing purchases. Because of this, all employee time that is shared by the cohort group would sign a legal non-disclosure agreement with strict penalties for violations of the shared privacy and confidentiality agreement.
STANDARDIZATION AND REPLICATION OF THE COMMON STRUCTURAL FRAMEWORK & BUSINESS PROCESSES / WORKFLOWS
The question of how costs could be shared among institutions within a cohort can be approached by answering the following questions within the cohort agreement:
Illustration 3: Replication of the Common Framework Model
Business practices are the crucial key in this process as it may require some institutions to change or amend their internal business practices, schedules, standards and policies to work with a cohort group of other, like-minded institutions. Functional aspects of such changes could touch on operational items such as:
These items are at the heart of college and university operations and are necessary areas for management and normalization of business processes and practices using a shared system. This decision process would be done as a collective group of chief financial officers, chief information officers, human resources leadership, registrars and other key managers and staff. Guided by leaders and selected solutions provider(s), these key leadership groups would outline a straightforward set of standards for a shared policies and procedures document to govern the cohort’s activities and partnership. Once those standards are set, institutions would follow these standards and practices to operate a shared system and manage necessary operational workflows for their organizations.
Using this as a concept discussion starter, the initial questions include:
If you are a HESS Consortium member institution and interested in joining the HESS Collective Shared ERP Services Initiative, please click here to fill out the questionaire and application form.
If you have any questions about this whitepaper and the information contained here, please contact Keith Fowlkes at firstname.lastname@example.org.
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