Making the grade? ERP and public school districts.

• Author: Wheeler, Michael
• Position: Enterprise resource planning

Over the last several years, government organizations across the country have enhanced their efficiency and effectiveness by procuring and implementing ERP and financial systems. In some cases, vendors have taken products initially created for private sector corporations and have made significant changes to address the unique needs of the public sector. These vendors now offer--to varying degrees--fund accounting, budgeting, grant management, and purchasing functionality tailored to the specialized needs of state and local governments.

Some companies have also developed software to meet the needs of many single-purpose, special district governments like water and transit districts. These systems usually serve as third-party add-ons that can be integrated with many of the top-tier ERP systems. But what about public school districts? Throughout the United States, many school districts are contemplating upgrading from their legacy systems to ERP. These districts are concerned about whether generic off-the-shelf packages can address their unique needs.

Over the past six years, GFOA Research and Consulting staff has advised several school districts in the United States that have replaced their legacy financial management systems. As such, we have gained some perspective on the issues school districts are most concerned about. The purpose of this article is to answer some of the basic questions about the use of ERP systems by public school districts, including the following:

* How well do ERP systems work in public school districts?

* Have school district ERP implementations been successful?

* How has ERP improved the management of public school districts?

* Has ERP hindered school district operations?

* What are the major drivers in a school district's decision to procure an ERP system?

* In what areas can ERP software improve to better meet the needs of public schools?

THE ANSWERS

To answer these questions, the GFOA Research and Consulting Center obtained a list of 58 school districts from the Council of the Great City Schools. (1) From this list we created three categories of districts--small, medium, and large--based on number of students and size of the operating budget. Exhibit 1 shows the breakdown for each of these categories. We interviewed at least three districts from each category (Exhibit 2). This section summarizes their answers to the six questions posed earlier. (2)

How well do ERP systems work in public school districts? A majority of the small- and medium-sized school districts we interviewed indicated that their ERP systems were working reasonably well. Since the definition of success could have varied from district to district, we asked these districts to define what they meant when they said their systems were working well. Those that had completed their implementations indicated that either the system was operational with different and improved business processes or that the system was operational with net improvements to efficiency and effectiveness. The responses of the large districts were more varied than those of the smaller ones. At one extreme, the district indicated that its ERP system was a good fit. At the other, the district indicated that it was still having difficulty integrating the ERP system with some of its standalone systems.

Have school district ERP implementations been successful? Most of the districts interviewed indicated that their ERP implementations had been successful. However, the criteria for success were many and varied. One district cited the performance of the vendors in meeting RFP requirements while another suggested the measure should be the project delivered on time and within budget. Other districts indicated that their new systems had allowed them to achieve business process improvements and to enhance their decision-making capability, especially the reporting functionality that allows for real-time access to mission critical information. Finally, ERP has led to greater technological efficiency for many school districts by eliminating shadow systems and providing employee self-service.

Despite the apparent success of these ERP implementations, not all of the districts responded with success stories. One of the medium-sized districts, still in the process of implementing, said that its effort had been a formidable challenge, particularly the data conversion component of the project. Since the project is still in the implementation phase, however, it is too early to judge the outcome.

How has ERP improved the management of public school districts? Each district was asked to explain how its system, if fully implemented, had been an asset to the organization. The most common benefits reported by the districts are listed below.

* Availability...