| July 1, 2016 | by Keith Fowlkes,Vice President, Technology at E&I Cooperative Services
The higher education enterprise systems market is changing nearly as quickly as the U.S. higher education system itself. (Note that I said “nearly.”) In the two years that we have spent working to found the Higher Education Systems and Services Consortium (HESS), ERP market dynamics and views on institutional return on investment have drastically changed. All colleges and universities are tightening their financial belts and opportunities in cloud computing have institutions looking for options to improve system functionality and reduce operating costs.
The Higher Education Systems and Services Consortium
Two years ago, a group of chief information officers and chief business officers started talking about how to work together with other private, non-profit colleges and universities to better communicate with our ERP partners and together develop collaborative agreements in private higher education. Today, our membership in the HESS Consortium has grown to over 70 private, non-profit institutions, large and small.
HESS is growing quickly for what I believe are two primary reasons: the opportunity for collective cost savings, and a desire to collaborate better and closer with each other and our ERP software partners. Most of our software partners have been excited about the opportunities of a consortium like HESS. Campus Management, Ellucian, Jenzabar, Oracle, Unit4 and Workday are all current software vendor partners.
Was this idea for collaboration solely to collectively demand major pricing discounts for our institutions?
Surprisingly, the answer to that question is no. HESS private institutions understand that for our schools to be successful, our software vendor partners must be successful. It is a symbiotic relationship and we understand this. Yes, we do want to affect the future of price escalation, but only based on the the continuing success of our institutions, helping our software partners to understand better the changing private higher education market that they serve. We understand that we cannot continue to operate in the way we have for the past 25 years, and we believe the answer for many of our member institutions may be in the cloud, the entry into which environment brings a new dynamic to higher education, especially to many of our private, non-profit institutions.
The development of what I call a “collective cloud” model along with the entry of newer higher education ERP software vendors into the marketplace could add a spark to the industry as it has not seen in years. The development of a new model for features, delivery and, yes, pricing in the cloud could bring private institutions into the reevaluation and selection process.
Our objective is for our member institutions to have the option of joining a HESS vendor cohort, collectively negotiating a price and implementing a new or strengthening their existing solution in the cloud in a multi-instance cloud computing environment. Collective implementation costing models as well as the re-thinking of annual and multi-year maintenance and support models could change the industry as we know it.
The key to future success in private higher education is two-fold
Yes, it is important for us to work with our ERP software partners to re-think their pricing models as we move to the cloud. This is difficult for us and them. Many of our ERP providers have used the same costing models for years and the system is baked into their financial earnings statements so tightly that to change something so fundamental sends ripples down their spines. We can all understand this. Many of our institutions operate with the same historical constraints and can be just as difficult to change.
The second part of this is internal to most of our private institutions. We must begin to think about how we can find savings by pushing costly overhead in our operations to the cloud as well as rethink our workflows and business processes. For many private institutions, this is gut-wrenching. Many internal processes have evolved slowly through the years to a comfortable and repetitive state. Thinking about how we can innovate on shared business operations as well as cloud-based ERP operations is messing with campuses’ culture and community. Private colleges and universities do not like this type of meddling and resist it… ferociously. On the other side, vendors must figure out how they can make these operational services cost effective, reliable, and attractive for private institutions to make the jump. This is where HESS comes in to bring private institutions and vendors together to find solutions for the future.
We all have to change
Much like our national debt problems, higher education has mounting challenges with declining student populations, family economic issues, and shrinking student financial aid opportunities. We all know challenges are coming but ignoring them won’t make them go away. Our private, non-profit higher educational institutions have stepped out to address some of these oncoming challenges, not only with our ERP systems but in collaborative services together. The work we are doing to collaborate, find economies of scale, and develop new ways of working with our software partners will hopefully help all of our individual colleges and universities be stronger and more resilient in the leaner years to come.
As Virgil stated: fortune favors the bold. Collaboration in ERP solutions is only the beginning for HESS. We are looking for new ways to collaborate and affect positive change in all of our purchasing and service areas. In the coming months, we will be inviting more software companies to begin discussions with us in many different areas. If our private institutions are to survive, we must adapt and the HESS Consortium is an effort to adapt to a quickly changing higher education market and possibly find some new opportunities for our collective and individual futures.
We invite your private, non-profit college or university to join us in finding solutions. For more information, please visit www.hessconsortium.org.
About the Author
Keith Fowlkes is the Vice President, Technology at E&I Cooperative Services. He is a veteran Chief Information Officer and is a co-founder and board member of the Higher Education Systems & Services Consortium (HESS). Keith is a frequent speaker and contributing writer on technology topics in education. He can be reached at email@example.com.
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