Sunday, August 9, 2009

Large-Scale Solutions for Small Enterprises: a Brief How (and Why) To

This is the first (technically, second I guess) in what will (hopefully) be a series of guest posts, from Ted and others.

One thing I really liked was the small shop that Ted talks about. So often you see IT become the cost center typically due to a lack of planning. 5 people supporting 3000? That's pure awesome. Speaks volumes for Ted and the choices he has made.


Wouldn't it be great if you could effectively run a major ERP suite on a tight budget with only a handful of staff? That is one of the things I do, so Chet asked me to write a bit about it. Specifically, he asked me "how have you integrated Oracle into a small shop? How much work? Hard? Easy?" Hopefully this post will cover those questions.

The What

The enterprise I manage runs a large and scalable ERP application suite: Oracle PeopleSoft Financials, HCM, Campus Solutions, and Enterprise Portal (all on application version 9.0 on PeopleTools 8.49). We have those applications running on an essentially Microsoft technology stack (Windows servers, SQL Server, Active Directory, ILM, and so forth). Our environment is heavily virtualized using VMware. Our mission has always been to maximize functionality and minimize cost. We do a fair job at that, as we deliver this ERP suite to a user base of ~3000 with an IT staff of 5 and a very small budget.

The How

Our modus operandi is basically to run our applications very near vanilla and to keep them as current as possible. This allows us to take full advantage of vendor and peer support and leverage the latest delivered functionality. Staying vanilla keeps operating costs down (no development costs, quick patch cycles, etc.) and allows rapid upgrades. We also do not diversify the technology within our enterprise architecture unless absolutely necessary. That allows our staff to use one skill set across multiple applications. That, in turn, allows us to hire ambitious generalists who are comfortable moving across applications. We minimize training costs by maximizing peer collaboration (very common in the Education and Research industry) and staying very active in user groups (our industry has an exceptional user group, -1 for my bias). We also rarely use consultants and never use implementation/upgrade partners anymore.

The Why

A colleague from a large university asked me recently why, for an organization our size, we did not use a much smaller solution (I think he suggested QuickBooks, +1 for snark). It is a fair question with a simple answer. While our organization is smaller than a larger university, the complexity of our business requirements is comparable. For example, our payroll contains all of the variations of a larger university: full time and part time staff, faculty contracts of every imaginable period of time, student employees, contingent workers, and so on. To use a smaller solution to handle that complexity would require a larger and far more specialized payroll staff, at least some custom application development, and a different IT support structure. All of those things are costly. Instead, we let Oracle worry about providing the functionality to meet those requirements, we let our payroll staff adjust their business processes around that functionality (we are mean that way), provide general IT support from our small pool of staff, and leverage our user group for strategic direction and answers to tough questions. So, to answer my colleague's question, we use a large solution like Oracle PeopleSoft to accomplish our mission: to maximize functionality and minimize cost.

The Importance

I am no analyst, but it does seem to me that business requirements, regulations, and compliance issues are getting more complex. It is probably safe to assume that they will not get simpler any time soon. We are also in a massive recession and resources are scarce. It is probably safe to assume this won't change anytime very soon, either. One way to meet these challenges is to take advantage of the benefits of larger enterprise solutions (to handle increasing complexity) and operate them as efficiently as possible (to handle decreasing resources). The major enterprise technology players (Oracle, Microsoft, SAP, IBM) are spending time and money focusing on small and medium enterprises (SME) recently. I think this is mostly for sales (what isn't?) but I also get the sense that they want to know how SMEs actually run these applications. I wrote a white paper last year (Effective ERP Practices for the Small Institution) that got a good bit of attention from Oracle. I also spoke at Open World last year about this stuff [http://www.slideshare.net/badgerworks/higher-education-acheives-oracle-peoplesoft-roi-presentation] (and went for free, in true oraclenerd style).

I hope that answered some of Chet's questions and maybe raised some new ones. If you have questions or comments drop them here. You might also want to hit my blog for the top 5 FAQs that I get when I speak, write, or consult on this topic. Thanks for reading!

About
Ted [ linkedin | twitter ] is Vice President for Communications and Membership at the Higher Education User Group, MBA and MSIS student at the Johns Hopkins University, Director of Administrative Systems at MICA, and blogger at badgerworks.

3 comments:

jesus said...

I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Sara

http://smallbusinessgrant.info

Michael said...

Interesting Post. But I am curious what your users think about vanilla systems. Did their normal business processes automatically integrate into peoplesoft business process workflow or did you force them to accept the new workflow in the aim or of doing more with less.

Ted Simpson said...

@Michael -- thanks for reading and commenting!

Generally speaking, our users have never known anything other than vanilla (or very near vanilla) since we implemented first in 1999. Since we started that way it is much easier to keep it that way. May peer institutions are seeking to get to vanilla from highly customized and are having a tough time with users.

To your specific question, our approach is to help functional areas/lines of business rework business processes to better utilize delivered functionality. We have top-level executive support for this approach, which is critical. Our president (http://www.alumni.hbs.edu/bulletin/1999/february/profile.html)once said very openly that it is easier -- and cheaper -- for humans to change their behavior than it is to customize applications around existing behavior. Nice!

Our executives understand (and we regularly remind them) that carrying many customizations is costly in many ways.

Oracle also does a very good job in our industry of delivering functionality that meets most core requirements of a university. They also to a commendable job at engaging our user community (through HEUG) to continuoously improve their product lines.

All of those are stars that are a bit difficult to align. We are pretty lucky to have worked our way into the constellation.

Thanks again. -Ted