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Weekly UpdatesAlthough GFOA has provided technology procurement consulting services to public agencies for a number of years, we just recently took on our first higher education client. Higher education is one sector in which technological advancements have had a significant impact on operations. Colleges and universities find that they have no option but to keep pace with these advances. Our community college client recognized that a totally integrated enterprisewide solution would improve its ability to provide high quality service to students, faculty, staff, and the community.
The generally accepted definition of an enterprise resource planning system (ERP) includes all of the modules necessary to accommodate an organization's financial and human resources-related administrative functions. For this particular client (and most other colleges and universities), however, the student information modules are just as important, if not more so, than the financial and human resources modules. And because college students are one of the most technologically advanced populations, constituent relationship management (CRM)--including self-service capabilities for applying, enrolling in courses, paying fees, and so forth--is also an important component of the college's enterprise technology solution.
The request for proposals released by the college included all of the modules listed in the box on page 52.
The expansive scope of the RFP was rather daunting to both the college and to GFOA. However, by following GFOA's proven procurement methodology, which divides the process into manageable tasks, we are now in the process of helping the college obtain the best enterprise solution for its needs.
DEFINE THE DETAILED BUSINESS REQUIREMENTS
Defining the detailed business requirements for an ERP system is one of the most important tasks in the procurement process, not only because it is an effective way to differentiate product offerings, but also because we recommend that these requirements become part of the product warranty. This can be an overwhelming task for clients. While subject matter experts are familiar with the capabilities of existing systems, they are often unfamiliar with the functionality of modern systems and find it difficult to communicate their needs to vendors.
By the time GFOA was hired to assist in the procurement of a new enterprise system, our college client had made significant progress in defining business requirements, especially for the student information system. As a result, we were able to focus on validating those requirements and filling in less complete functional areas. GFOA has a database of baseline requirements from which to draw, so our clients do not have to develop an RFP from scratch. The ability to shop for requirements from a database such as ours makes it much easier to define specific organizational needs and greatly reduces the time it takes to develop the business requirements matrix.
DEVELOP A THOROUGH REQUEST FOR PROPOSALS
The second step in the procurement process is to develop a request for proposals that succinctly yet thoroughly presents the organization's needs to vendors. The RFP must request the information needed for the organization to determine which vendor or vendors can provide the best overall solution for its specific needs. Our college client had already developed an RFP on its own, so we simply incorporated some of GFOA's proven requests and clauses.
Many of GFOA's clients attract responses from vendors in more than one stratum of the ERP marketplace. GFOA classifies software vendors into three tiers based on the quality of the product offering and the nature of the company. Both Tier I and Tier II software vendors were considered viable options for our college client. Tier I companies offer advanced ERP systems that can be configured to accommodate most industries, including the public and higher education sectors. Tier II software firms offer less technologically advanced solutions than Tier I firms, but their products are designed for a specific industry, in this case higher education. Such products are quite likely to meet the essential business requirements of a higher education institution, perhaps with more robust functionality in certain areas than Tier I systems. Of course, products in different tiers vary significantly in terms of functionality, cost, and implementation effort, among other things.
Because our client was considering both Tier I ERP solutions and Tier II niche products, we knew it was critical to prepare the RFP so as to be able to compare responses on an "apples to apples" basis. Comparing project and maintenance costs, implementation effort, and user license structure is particularly troublesome. For this reason, GFOA has developed a series of spreadsheets that force vendors to present information in an understandable and comparable manner. This methodology helps clients evaluate the overall value of a given solution and provides the tools for selecting the best system for their particular needs. The college incorporated these spreadsheet templates into its RFP.
For this particular procurement, managing the expansive project scope was a significant issue. The college decided to categorize functionality in the RFP as either required or optional. Required functionality included the financial, human resources, and student information modules, while optional functionality included data warehousing, constituent relationship management, enterprise portal, and document imaging. This approach encourages the selection of the best overall solution based on core functional requirements. Once this decision has been made, the college can then determine whether the optional functionality should be implemented concurrently with the core functionality, postponed to a future date, or eliminated. In other words, the college has the freedom to explore the optional functionality without committing to anything.
FOLLOW A DETAILED EVALUATION PLAN
The system selection process should be conducted according to a formal evaluation plan. The evaluation plan is important for a couple of reasons. First, the plan serves as a project roadmap, defining the schedule, tasks, activities, and responsibilities for the project as a whole and for the members of the project team. Second, the plan documents the evaluation process, ensuring compliance with all relevant procurement policies and procedures, as well as a fair selection process. The evaluation plan and the documented evaluation results may come in handy in the unlikely event of a vendor protest.
For our higher education client, the evaluation plan detailed each step in the evaluation process, from checking for detailed submittal requirements to contract negotiation. While GFOA consultants provide support for each step of the selection process, the college makes all of the actual decisions. GFOA provided a detailed proposal assessment and requirements analysis report to help the college select vendors for software demonstrations and implementation interviews. Since GFOA analyzes this information on a regular basis, we were able to identify differentiators in the proposals and point out areas for clarification. GFOA also checked the references provided by each finalist and facilitated the software demonstrations so that the evaluators could see as much of the same functionality from each vendor as possible. The next step is to help the college determine which vendor teams to elevate for discovery, a clarification process that occurs between evaluation and contract negotiation.
SUMMARY
There are a number of high-quality software products in today's market to meet the needs of any public organization. In most cases, these applications dramatically expand an organization's capabilities and enhance the efficiency of its business processes. An organization's ability to select the best solution for its needs depends to a great extent on a well-planned procurement process. Our first higher education client has benefited from integrating GFOA's technology procurement methodology with its own internal process, and the college is well on its way to selecting an enterprise solution that will take it to the next level of education delivery.
REQUESTED MODULES:
Student Information
* Prospect Management
* Enrollment Management
* Student Administration
* Financial Aid
* Space Utilization
* Student Accounts Receivable
* Curriculum Management
* Community Outreach
Financials
* General Ledger/Budget Development and Control
* Accounts Payable
* Accounts Receivable
* Purchasing
* Fixed Assets
* Inventory
* Project and Grant Accounting
* Investment Management
* Cost Accounting
* Work Orders
Human Resources and Payroll
* Personnel Administration
* Position Control
* Applicant Tracking
* Performance Evaluation
* Training
* Benefits Administration
* Risk Management
* Labor Relations
* Payroll
Constituent Relationship Management
Enterprise Portal
Data Warehousing
Document Imaging
PATRICE SUTTON BURGER is a senior manager in GFOA's Research and Consulting Center. She can be contacted at 312/977-9700.
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