Student Management Software – Integrated ERP or Best of Breed

Deciding on a single fully-integrated ERP system or multiple Best-of-Breeds?

For educational institutions, performing tasks like nurturing prospects, providing portals for students and faculty, maintaining ongoing relationships with graduates while managing financial operations and compliance regulations presents challenges that require a significant investment in student management software. Each task is part of a separate functional area with distinct processes and needs for collecting and utilizing data.

Selecting the best student information software to manage these disparate operations will involve a complex set of decisions. There is never a perfect solution, so prioritizing what’s most important is critical, since compromises must be made.

The final decision always comes down to a choice between either one fully integrated system software or multiple niche’ software systems, a.k.a. Best of Breed (B.O.B.). Either choice offers positives and negatives that should be weighed against the goals of your organization and the available technology resources.

A Fully-Integrated Information System

The main distinguishing benefit of a fully-integrated student information system is that it utilizes a single database for the entire organization. If implemented correctly, each individual has a single file housing all their information, which means all the data about that person is typically accessible in real time. Since all information is entered into a single system, the back-end inner workings are relatively seamless and the data integrity is usually very good. But there is a downside.

A fully-integrated system is very broad in functionality, fulfilling a wide range of needs for the organization. But like any software, it’s difficult to do everything well and in order to maintain this seamlessness for the full scope of the organization (which is no small task) other aspects of the system are usually de-prioritized. In most cases what you’ll find lacking are the user experience and some specific features that are not critical or essential for the majority of their customers.

A Fully-integrated ERP System: The Pros and Cons

Below I’ve listed the most important benefits and drawbacks to consider when comparing a fully-integrated ERP with B.O.B. software.

Benefits

  1. More accurate and complete data.

  2. Consistent processes throughout the student lifecycle.

  3. Lower maintenance costs due to common architecture.

  4. A single user interface throughout the system.

  5. The overall Total Cost of Ownership is usually lower due to a unified business process.

  6. Single vendor is more accountable for solving issues.

  7. Fewer training costs due to common architecture.

  8. Subject-matter expertise levels are reached faster for the chosen technology.

  9. Single platform decreases evaluation, testing, proof of concept, and time to deployment.

  10. Economies of scale may afford opportunities for bundled (more price-competitive) license fees.

Drawbacks

  1. Risk of sole reliance on one vendor.

  2. Risk outdated technology and features.

  3. Less flexibility when adding new features and functionality.

  4. Downtime affects the entire system.

  5. Increased control and permissions required to ensure institutional data integrity.

Best-of-Breed Software

A best of breed system has the advantage of focus. These systems specialize in smaller functional areas like Admissions or Financial Aid and the features, user experience and look are built without much consideration for the other operational aspects of the organization. The features and functions are focused on user experience with added bells and whistles, but there is a significant downside: data integrity and accessibility.

Utilizing multiple database systems usually runs the high risk of information getting stuck in silos inaccessible to other parts of the organization when they need it, or the creation of multiple incomplete records for a single individual. For an organization to operate effectively it’s important that the information is complete, accurate and accessible and it can be a challenge getting multiple B.O.B software tools to operate together.

In an educational organization, there is no more dramatic example of this than the admissions department.

Best-of-Breed Software for Admissions

Admissions departments are under pressure to increase the pool of quality prospects. New marketing technologies seem to emerge every day with the promise of finding and attracting new prospects. The problem with adopting such new technology is the usual suspect: data integration.

Many inbound marketing technologies have two weaknesses, one they’re industry agnostic and don’t have all the specific admissions functionality like (application tracking, financial aid, transfer credit eval etc). Also these tools generally use implicit data with limited biographical information to find, track, and nurture prospective students. All student records should have a unique identifier (Name/DOB or SSN) to tie the data together. For many standalone marketing or admissions products, a cookie or email address is often used as the unique identifier. The problem is that cookies and email addresses change frequently based on who is performing the search or what computer/phone performs the request. Therefore the data does not lend itself to later integrating with the student information database because by its nature, it contains little actual biographical data about the person to match up.

Since this data cannot easily be integrated into the ERP system, the organization is faced with some difficult choices.

  1. Either, use the best of breed software for the entire admissions cycle which means specific functions like common application, Department of Ed integration, financial aid, transfer credit evaluation, and many other necessary functions are not available.

  2. Another choice is to manually enter, batch upload, de-dupe and correct the data. This can be very labor intensive and usually yields only an 80-90% accuracy rate.

  3. The third approach is to not integrate the best-of-breed software at all. Just import data into it and take advantage of its strengths and let it function in a silo.

Best-of-Breed Software for Financial Analysis

The Accounting/Finance department is the other place where B.O.B software is often found. This does not present a problem if the data from the ERP is only exported to the B.O.B tool for analysis and reporting.

However, there is often a temptation to create a shadow system where the financial package is maintained and synced manually with the ERP. This always presents a problem, since these departments usually require immediate access to real-time data for critical strategic decisions and there can be a lag between one system synchronizing with the other. There’s also the added man hours required to keep both up to date that should be factored in.

Best-of-Breed Software: The Pros and Cons

Below I’ve listed the most important benefits and drawbacks to consider when evaluating B.O.B software.

Benefits

  1. Ability to choose the most feature rich product and latest technology for each department.

  2. Industry familiarity.

  3. Greater flexibility for replacing software modules.

  4. Maintenance and upgrades can be performed module by module without disrupting the entire system.

  5. Easier to implement a smaller department more quickly.

  6. Avoids single vendor dependence.

  7. Allows each department to operate independently of a centrally administered system.

  8. Often involves lower initial costs through more competitive licensing fees.

Drawbacks

  1. Added complexity of multiple systems, multiple databases and multiple vendors.

  2. High potential for data integrity issues, duplicate data, missing data, incomplete records.

  3. Increased costs from data warehousing, complex networking.

  4. Integration points must be continuously updated and maintained.

  5. Increased difficulty troubleshooting due to added complexity and finger-pointing from multiple vendors.

  6. Multiple user interfaces increases training costs and confusion.

  7. Difficult to get a complete set of reports in a timely manner.

  8. Duplication of effort (e.g. address change must be entered into several databases).

  9. Architectural complexity creates high downstream costs to integrate and maintain diverse systems.

  10. Testing and running proof-of-concept trials involving disparate platforms and architectures increases time to deployment.

  11. Higher training costs; team members rarely achieve subject-matter expertise levels across every technology.

  12. Higher risks, as incompatible product road maps may create unforeseen disruptions, such as one vendor opting to stop supporting another vendor’s products.

  13. Lack of coordinated effort at shaping vendor roadmap for organization-wide functionality.

Mapping a software’s strengths and weaknesses to your priorities

Like with any software decision, it’s good to determine whether the strengths of the vendor aligns with your organizational priorities. The a�?must havesa�? should map to the vendor strengths and the vendor’s weaknesses should be similar to the a�?can live withouta�?.

The major areas to consider for making these decisions can be broken down into:

  • Data accuracy – How correct is the information?

  • Efficient operations – How much time will be saved?

  • Data accessibility – Can I get the information when I need it?

  • User experience – How easy is the system to use?

  • Cost – What is the return on investment *?

The following chart compares the strengths and weaknesses of a fully integrated system or B.O.B. software by evaluating data accuracy, efficient operations, data accessibility, user experience and cost, as it relates to the entire organization and a specific department. This is not scientific and can vary by organization but it serves as a good rule of thumb.

Bob Chart.JPG

Conclusion

Even after all this assessment, there are other factors that can tend to add further complexity. Competing interests are usually at play where a department will favor a best-of-breed over an integrated system, even though it might not be the best choice when considering the bigger long-term picture.

It is important with any software choice that the organizational buys into the decision. A lack of buy-in may otherwise undermine any potential productivity gains.

The evaluation should always include an understanding of the level of integration that can be achieved especially from a technical standpoint since the other variables are subjective. The best way to do this is to look at other institutions and look at the support mechanism for user support, data integration, data warehousing needs, and institutional reporting. If all of these are being provided at a high level without large staff investments, then the solution should be considered.

Any questions?Contact Us

Sign up for a Free Online Demonstration of Campus Café

About the Author

Joe Stefaniak has been a leading expert for almost 30 years in the development and implementation of software solutions for higher education. His expertise is in helping colleges and schools streamline operations and manage information for better decision making through analysis and application of best practice software. He founded SCAN Business Systems in 1986. Its flagship product, Campus Café, has grown into a leading provider of educational student information systems. He holds a degree in Business Administration from Northeastern University.

Footnote

* It is extremely difficult to actually compare the return on investment and total cost of ownership of an integrated system vs a best-of-breed approach. But the variables to include are:

  • Staffing levels and/or savings based on ERP approach.

  • Productivity gains or losses based on which approach is chosen.

  • Cultural issues sometimes referred to as turf issues.

  • User bias and/or lack of buy in which can undermine the efficiency of any organization.

Evaluating a Student Information System (SIS) – Part 2

SaaS vs On-premise: What are the Costs?

In the first part of our series, Evaluating a Student Information System, I outlined the major risks to consider when selecting a SaaS or on-premise solution.

But now the big question, which goes hand-in-hand with the risks… what are the costs? Although the costs in the near-term can be relatively straightforward, a key component that can be easily overlooked is evaluating the cost implications over time. I would recommend a 5 year Total Cost of Ownership (TCO), since most on-premise vendors charge 20% of the license fee for annual maintenance which equates to a 5 year re-purchase of the license.

As with any projection, a 100% accurate TCO is unrealistic since technology and business needs are rapidly changing. But a TCO serves as a good benchmark for budgeting and an apples-to-apples comparison for potential vendors. Some vendors backload many costs of an SIS in the latter years which, without a TCO, would give the impression of a much more favorable return on investment.

Components: Total Cost of Ownership in SaaS vs On-Premise

License & Subscription Fees

Cost to purchase the software

The majority of on-premise solutions charge a licensing fee which grants the organization full ownership of the software in perpetuity. The software is priced by the number of users or in the higher education space by Full Time Equivalent Students (FTE) and the entire amount is required to be paid up-front. Often, major upgrades or new software releases generally require additional payments.

In comparison, SaaS solutions are sold as a subscription on either a monthly, annual or multi-year basis. As with on-premise, it is priced by the number of users but all upgrades are included and happen seamlessly with no new installation required.

SaaS subscription is usually charged monthly. On-premise license is an upfront lump-sum cost.

Hardware and Operating Systems Software

Cost of equipment to run the software

Another major cost difference between on-premise and SaaS is the hardware requirements. An on-premise solution usually requires a sizable upfront hardware cost that could include application servers, databases servers, and networking infrastructure. This hardware also must be maintained and upgraded to meet the needs of a growing organization.

With a SaaS solution all of these costs are shouldered by the vendor.

SaaS cost is 0$. On-premise, fully depreciate all the all hardware and operating software over 5 years.

Implementation

Cost of installing and configuring the software.

It is often assumed that there is no implementation cost with SaaS. This can be a false assumption. While the SaaS vendor will provide a a�?platforma�? with all software installed, the configuration of the system is a major effort that cannot typically be done without understanding the customer’s specific business processes and tailoring the new ERP system to the needs of the organization.

SaaS implementation costs usually run 60-80% of on-premise.

Customization

Cost of changes to meet specific needs outside the current software offering.

Customization costs are hard to estimate without the customer’s needs fully scoped. Most customization is about integrating third party systems and will require additional programming cost no matter which type of solution is chosen.

Customers often feel that there is more flexibility and availability of developer tools for on-premise, but customization comes at a price and will have ripple effect down the line in terms of maintaining continuity with any software upgrades.

The customization costs for SaaS and on-premise is about the same.

Data Conversion

Cost to migrate historical data into the SIS system

Unless you’re starting a new school from scratch, there will be a data conversion cost and it should be about the same for both SaaS or on-premise. The cost is highly dependent on the volume of data, what format it’s in (paper, spreadsheet, database) and the quality of the data (does it require scrubbing for duplicates and bad entries).

The data conversion costs for SaaS and on-premise is about the same.

Training

Cost to train all relevant users of the system

A Student Information System can be a complex piece of software that does many things, so employee training should be expected. The cost will depend on whether the vendor needs to go on-site and if any customize training is required. Some organization attempt to train a small core that will then train the rest of the organization. Training costs will typically be less for SaaS since the IT department does not need to be trained in the ongoing infrastructure maintenance of the system.

SaaS training costs usually run 60-80% of on-premise.

Maintenance and Support

Cost to maintain and support the software on an ongoing base

In addition to the software development cost that vendors pass on through a license fee, there’s a cost for ongoing updates, bug fixes and e-mail, chat and phone support (help desk) to handle any issues. This is passed on via a maintenance and support fee which can be between 15-25% of the software license cost.

On-premise solutions charge the software license fee in one up-front lump sum and the maintenance fee separately on a monthly or annual basis. When purchasing SaaS, the software license and maintenance are bundled together in a monthly fee. Be aware that the maintenance might not cover the more involved help and troubleshooting in which case a premium maintenance contract is usually available that provides support over and above the standard level.

SaaS cost is $0. On-premise, is the accumulated maintenance fee over 5 years.

Personnel

Cost of people to run the system

The third major cost difference between a SaaS and on-premise s is the personnel necessary to run the system. For a large institution, this usually consists of network administrators, database administrators, help desk and software support staff, data analysts, institutional research and/or report development staff. Budgeting an average low six figures per person including health and benefits is a good idea.

A SaaS solution will require a lower headcount than on-premise because the infrastructure and security is hosted by the vendor. The degree of this headcount difference will be dependent on the specific needs of the organization. A SaaS solution will require many of the same internal skill sets (report writing for example) unless these services are bundled into the SaaS fee, which is not a standard practice.

SaaS personnel costs usually run 40-60 % of on-premise.

Security and Other Software

Cost of security software

Security is often overlooked when considering cost. With an on-premise solution, the organization bears these costs while the SaaS vendor will maintain security and bundle the cost in the subscription fee.

Also, additional software (server licensing, SQL licensing, reporting tools, office suite software) might be required to complement and effectively make use of the SIS system. This will be necessary regardless of whether a SaaS or on-premise solution is selected.

SaaS security costs usually run 25% of on-premise.

Backup and Disaster Recovery

Cost of backup hardware and software

Cost of backup and recovery can be difficult to assess since everyone has differing notions about what a good backup and recovery strategy consists of. The highest level of backup and recovery offers immediate access to data and very rapid recovery in case of a disaster scenario. This of course could be very costly upfront which must be weighed against the risks of not having adequate plans in place, which can be a much greater cost down the line.

Potential buyers sometimes erroneously assume that with SaaS, they have fully mitigated their risks and don’t have to worry about back. But a good backup plan means that critical data must be backed up in at least three locations: production data, cloud backup, and an on-premise backup. Good risk management dictates that the customer maintain control of and a copy of all mission critical data in the event that something happens to the vendor, or a decision is made to move the data to a new system.

SaaS backup and recovery costs usually run 25% of on-premise.

Additional Cost Considerations

Typically, hidden costs occur when the customer is not fully aware of its information technology needs, prior to purchase and implementation. If the research in the discovery process is insufficient, then post project costs will most likely increase in the form of additional system customization, training, reports and dashboard development.

Another factor that is often overlooked when considering a new SaaS solution is the age of the existing on-premise hardware and software licenses that are being replaced. It might seem obvious but the older the hardware and licenses, the better. SaaS vendors include a software investment component to their subscription fee so if an on-premise solution was recently purchased (within the past 2 years) the cost might not have been fully recouped. Infrastructure as a service (migrate the existing software to the cloud) is a good option to be considered in this case.

Conclusion

After all of the costs ( outlined above ) are determined for each vendor and plugged into a spreadsheet, the recommended next step is to calculate the Return on Investment (ROI). This would be necessary regardless of which option is chosen since the ROI will help evaluate the efficiency in labor and equipment savings that can be expected.

I will go over this in more detail in a future post. In the meantime feel free to contact me through our website if you wish to discuss your current needs.

 

Check out Part 1.Evaluating a Student Information System: What are the Risks?

Any questions? Contact Us

Sign up for a Free Online Demonstration of Campus Café

About the Author

Joe Stefaniak has been a leading expert for almost 30 years in the development and implementation of software solutions for higher education. His expertise is in helping colleges and schools streamline operations and manage information for better decision making through analysis and application of best practice software. He founded SCAN Business Systems in 1986. Its flagship product, Campus Café, has grown into a leading provider of educational student information systems. He holds a degree in Business Administration from Northeastern University.

Evaluating a Student Information System – Part 1

SaaS vs On-premise: What are the Risks?

Determining the best Student Information System (SIS) built to adequately meet the needs of your organization can be a daunting task. There are many factors to consider and choosing the right software solution is only the beginning. How the software should be delivered and the adequate infrastructure required to support it can be just as critical a decision. Knowing the risks and costs associated with these considerations can save you a lot of time and headaches in the long-run.

In this series, Evaluating a Student Information System, I’ll outline in detail the major factors in determining a SaaS vs on-premise solution. This series is broken into many parts, this post (the first) pertains to the risks, the next post will be focused on the costs, and also stay tuned for more timely posts to follow.

Defining Cloud and SaaS

Part of the problem in assessing cost and risk associated with SaaS vs an on-premise solution is defining just what the terms mean. Without a high level of IT expertise, it is a challenge. Clear definitions are key to avoiding hidden costs and risks.

The a�?clouda�?, we hear that term alot. It’s essentially a remote network of servers (the utility of which is to provide/purchase only the necessary computing resources to meet the business requirement). SaaS is typically defined as a software delivery model that uses a cloud remotely hosted from the client. The other major characteristic of a SaaS-based approach is the software is provided on a subscription basis (monthly, quarterly or annually). There are many combinations of cloud-based storage and SaaS delivery models that make it difficult to assess total cost of ownership (TCO) and risk over time. For example, a provider might deliver a software product where the service and the data are stored at a specific location (colocation or colo), while another might deliver the same type of service where the data is stored in an undefined location.

Main Components in a Student Information System

Hardware

Consists primarily of servers and ancillary equipment that the software runs on.

The Network

The network includes all the services and hardware components that allow the server to communicate with other computers. This includes services like internet access, bandwidth, throughput and physical layers such as cabling, fiber, power, security, switches and routers.

Operating System and Upgrades

The student information system isn’t the only software that will be running on the hardware environment. The server will require an operating system which involves various functions in maintenance and upkeep which includes: installations, configurations, change control, updates and patches, anti-virus protection, and security.

Licensed software and upgrades

Licensed software includes many third party applications that work with the student information system including: server licensing, SQL Licensing, Reporting Tools, Office software (email, communications, etc.). Other recommended services like anti-virus, backups and storage for your SIS system require licenses.

Security

Security encompasses many different aspects of the operation in both the physical and virtual world. A complete information security policy includes, but is not limited to, protection from external and internal threats, data integrity, information assurance (the availability of the business information when you need it), disaster recovery and business continuity.

Personnel

A student information system is a complex piece of software that generally requires many levels of human resource support. The most common of which are network administrators, database administrators, help desk and software support staff, data analysts, institutional research and/or report development staff.

Risk Considerations: On-premise vs SaaS

Software Availability

With an on-premise solution, software availability might seem to be a lesser risk compared to SaaS, assuming you have a stable installation running locally. However, many organizations that select on-premise overlook the creation of an adequate disaster recovery and reimplementation plan in the event of a local outage. The other main risk involves keeping up to date with upgrades and the resource cost to maintain them. In any case, your institution should have a plan for business continuity regardless of where the solution is hosted.

Data Loss

Backups and offsite storage of data is critical to any disaster recovery or business continuity plan. On-premise backups are essential for quick recovery due to many factors. The most common are user error, hardware failure, and power loss. For short-term business continuity, battery backups should be employed and local backups to storage area networks are another critical consideration that needs to be factored into the equation. If your policies are properly planned and executed there should almost never be a time where data is completely lost. With a SaaS implementation, the general assumption is that the vendor is completely responsible for the data. This would be a mistake. The type of storage used, its availability, and backup/recovery strategies of the vendor should be made clear. Where the data resides, who owns it, and the level of accessibility to the data, should also be well documented. Critical data should exist in three locations 1.) the primary data storage 2.) another data storage facility housing a regular back-up, and 3.) locally within the organization. This ensures that if the software service or computing capability becomes unavailable for any reason, the data that is owned by the organization is under its control.

Up-time

In today’s rapid business cycles, loss of access to your information can have a major impact on your success. The system availability is dependent on the working effectiveness of all components listed prior (hardware, network, virtualization, operating system etc.) and will be adversely affected by oversight in any one of the supporting layers. Since today’s internal networks are dependent on the external network for day-to-day operations (email etc.), the risk of moving to a SaaS is relatively small when compared with staying on-premise. One risk to consider with SaaS is that while the vendor guarantees 99+ percent uptime, you do not have control over when the scheduled downtime occurs. While vendors usually perform scheduled downtime tasks in off-hours, this might be an issue if you are in a different time zone, or have global operations.

Response time

Response time is affected by many variables including physical computer hardware (disks and memory, internal bandwidth, switches, and external bandwidth). It is often assumed that moving to SaaS will increase bandwidth. While your organization can eliminate many of the internal response time issues with SaaS, maintaining adequate upload and download speeds is still the organization’s responsibility.

Issue Resolution

Irrespective of SaaS or on-premise, how quickly an issue is resolved will vary based on many factors including: internal staffing levels, partnership agreements, vendor availability, vendor access to 3rd party systems, the timing of an issue (i.e. business hours, weekends, evening) and the availability of the proper information (access to trained staff, documentation etc…). Service level agreements should have a clear indication of expected call back time when an issue is reported and how these variables will affect issue reporting and resolution.

IT Core Competency

One of the greatest risks with an on-premise solution is ensuring all IT staff members are continuously trained to effectively manage all of the technical components of an student information system. If information technology is an organizational core competency then this is a minor concern. If not, then the advantage of going with SaaS is paying for resources that will stay on-top of the changing technology landscape while maintaining and sustaining the software infrastructure with a high level of proficiency.

Security

SaaS security has the advantage of ensuring adequate bandwidth to systems servers, firewalls, intrusion detection systems and other security appliances. Managed Access Control, encryption, physical security of the state-of-art data center are all components of the SaaS solution. On-premise is dependent on the competency of the human resources and the physical infrastructure of the organization. There are also certainly security risks with a SaaS solution that must be weighed including breaches outside of the control of the SaaS vendor.

Conclusion

Many organizations (especially smaller ones) have been moving to SaaS over the years as technology advances have helped alleviate the fear of trusting a third party with such critical business operations. Of all the risk factors, IT core competency and staying current with technology are probably the two driving forces that make SaaS an attractive option. These factors must be weighed against risks associated with moving your data and software to the cloud. For some, a SaaS solution isn’t viable or a hybrid approach is the best option. In each case it’s important to find a trustworthy vendor that will evaluate your particular business process and needs and then work with you to find the best solution for your organization.

Finding a good vendor can be challenging so please subscribe for helpful tips and industry trends so you’re able to manage your vendor relationship with confidence.

Check out Part 2: Evaluating a Student Information System: What are the Costs?

Any questions? Contact Us

Sign up for a Free Online Demonstration of Campus Café

 

About the Author

Joe Stefaniak has been a leading expert for almost 30 years in the development and implementation of software solutions for higher education. His expertise is in helping colleges and schools streamline operations and manage information for better decision making through analysis and application of best practice software. He founded SCAN Business Systems in 1986. Its flagship product, Campus Café, has grown into a leading provider of educational student information systems. He holds a degree in Business Administration from Northeastern University.