Student and Finance Systems in Higher Education: ERP Trends and Integration Challenges

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.”
– Dan Millman

Background

Higher education is evolving. The global pandemic impacted almost every aspect of the traditional campus as institutions and their IT departments adapted and innovated to serve students virtually. This demand for virtual access to IT systems and services will continue and grow. In fact, the campus administrative work culture is expected to see a permanent shift toward more hybrid work arrangements [1]. A recent Gartner survey of CFOs from around the globe found that spending on IT has become a higher priority for companies compared to other initiatives [2]. We can safely assume that within the higher education community, IT will continue to be a focus. The continuing demand for virtual access and the increase in IT budgets will accelerate two ERP-related trends in the next three years. In higher education, ERP systems are typically comprised of a combination of the school’s Student Information System, finance system or General Ledger (GL), and human resources and payroll system.

Integrating systems enables a smooth and richer business process experience for users while reducing manual overhead costs of data synchronization and transformation. Integration with ERPs are critical, since other value-add systems rely on secure and reliable data flows from and to the ERP, which serves as a system of record for student, employee and alumni data. In this article we will look at two student and finance system trends and their related integration challenges to system administrators.

Where are ERPs headed?

Trend #1: Higher Education institutions will move from a single vendor for student and finance systems to a hybrid multi-vendor best-of-breed ERP ecosystem. This trend had already started in adjacent markets and will gain more traction in the higher education space in the next two years. We are likely to see a sharp increase in hybrid, multi-vendor ERP ecosystems fueled by the demand for best-of-breed user experience and features. This allows system administrators the flexibility to build an ecosystem, using products from different vendors, that meets their unique needs and runs smoothly and seamlessly – à la carte. With most vendors providing cloud offerings, the lower total cost of ownership (upgrades, data center costs, etc.) for the IT department makes it a more palatable decision for an institution. The challenge for vendors, is building solutions that have seamless integration capabilities. As John Kitchen [3] points out: A central benefit of migrating legacy systems, platforms, tools and resources to the cloud stems from the ability to remove costly physical upkeep burdens of on-premises data centers.

Trend# 1 Move from Single Vendor to Best-of-Breed Multi-Vendor

Trend #2: Adoption of cloud and ultimately SaaS will gain considerable traction. A recent survey [4] of 650 colleges and universities shows how the pandemic has accelerated demand to move to the cloud. According to the survey: Senior leaders overwhelmingly said cloud-computing services have been valuable in responding to institutional needs (96%). Cloud adoption improves online instruction, student services, enrollment and admissions management. It helps colleges and universities seamlessly adopt the latest technology and functionality without investing in an entirely new system. Depending on the complexity of the IT ecosystem, institutions are likely to take one of two paths to cloud adoption:

1. Hosted/Hybrid: A fully hosted, or a hybrid cloud model allows institutions with a complex ecosystem a softer transition towards cloud. This incremental approach is cost-effective and allows the institution to adapt to a new operating paradigm.
2. SaaS: The SaaS ERP model will likely be the preference of small to medium sized institutions.

Trend# 2 Adoption of cloud and ultimately SaaS will gain a lot more traction

Challenges for Integrations

With opportunities also come challenges which, if not addressed, will act as barriers. The ERP trends will create three challenges for integrations.

Challenge #1, Proliferation in the number of integrations: Integrations are key to enabling a multi-vendor ERP ecosystem. Tracking data flows to keep two systems in sync is a challenge. However, with a multi-vendor ERP ecosystem there will be a greater need for reliability, maintainability, traceability and auditability of data flows between multiple student and finance systems.

Challenge #2, Bridging business process gaps: Integration is a three-step process – extracting data from the source system, translating it and then pushing it to the target system. With a complex ERP ecosystem, a fourth step may be necessary – bridging business process gaps. A challenge with any new integration is the reconciliation of an institution’s business process with the new system’s processes. With a multi-vendor ERP ecosystem, bridging these process gaps will be key for seamless integration but can become a maintenance challenge.

Challenge #3, Non-uniform technology stacks and integration methods: A potential downside of moving to a multi-vendor system is the introduction of different technology stacks. While most cloud-based vendors offer APIs for real-time integration, they are often at different maturity levels and follow different standards. Some offer batch as a fallback option to push data in or out of the system, which has its own set of rules and maintenance requirements. This means that institutions must not only deal with different integration methods but also different protocols and rules within each method.

In the case of a hosted/hybrid model, there is typically a dedicated VPN connection between the campus and the cloud hosting provider. In the absence of publicly available ERP APIs, integrating an additional system, especially if it requires direct access to the datastore, requires intervention of both the institution’s IT department and the cloud hosting provider which adds a layer of networking complexity and maintenance.

At Transact, we believe that while these challenges are not insurmountable, they are solvable. In many cases, we’ve built configurable solutions for our clients that address these challenges head on. We have built an integration platform that gives our clients the ability to navigate through these challenges with dexterity and confidence. To learn more about Transact and schedule a demo of our solutions, visit https://www.transactcampus.com/.

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