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Incorporation of ERP in Educational Institutions: An Empirical Study

Karminder Ghuman Sonika Chaudhary ksghuman@gmail.com Chandigarh Business School, Mohali 1. Introduction
ERP is an information technology solution that integrates enterprise functions such as planning, financials, sales, purchasing, human resources, logistics, customer service, and manufacturing. ERP is the, Commercial software package that enables the integration of transaction oriented data and business processes throughout an organization. Markus (1999). ERP is a system which consists of several integrated module that share data in organization in order to provide connectivity. Klaus Et al (2000) emphasized on the combination of all the processes and their control by one operation which is ERP software system. Thus, ERP has the potential to provide an effective solution for smooth operations of an organization and the underlying processes in its various departments by integrating all the departments and functions for maximum utilization of available resources. ERP in Education Sector Indian education system has witnessed massive growth in terms of numbers as well as a multitude of changes in the past few decades. Not only the quantum of intake in the group of colleges has increased significantly but the associated policies, procedures related to admission, teaching, examination, interaction with students also has grown many times. IT tools are promising a panacea in order to effectively manage such a scenario. One such Information Technology tool that is gaining wider acceptance is Enterprise Resource Planning (ERP). For universities, ERP is an information technology solution that integrates and automates recruitment, admissions, financial aid, student records, and most academic and administrative services. ERP can be used for both administrative and academic purposes by universities. Administrative functions include: human resources, accounting, payroll, and billing. Academic functions include: recruitment, admissions, registration, and all aspects of student records. Over the previous decades many institute have made significant investment in ERP while in most cases implementation is pretty successful, a considerable number of them have failed to achieve the expected objectives. The present study takes an in depth examination of the various facets associated with implementation of ERP in education sector.

2. Review of Literature
Many researchers have attempted to examine the implementation of ERP in the domain of Education sector and have identified critical success/l failure factors that affect implementation of ERP in an educational institution. Based of these ERP related researches we study the literature and have evaluated these factors by using expert opinions. Huang et al (2004) used Delphi method to identify potential risk factors, and constructed and AHP-based framework to analyze and also prioritize the ERP projects risk factors. Al-Mashari (2002) proposed taxonomy of ERP research and identified critical success and failure factors which are addressed as one of the main aspects of ERP researches. Wagner & Newell (2006) described ERP as establishing a powerful business system, infrastructure for organizations providing a depth of information horizontally across the value chain. The importance of ERP systems to an organizations competitiveness and the magnitude of ERP expenditures related to the firm resources imply that executers who implement these systems and academics studying ERP need to recognize which factors are likely to improve the chances of successful implementation. Ngai et al (2008) found that ERP system has been proved to be able to provide significant improvement in efficiency, productivity and service quality, and to lead a reduction in service costs as well as to make decisions more effective. King, Kvavik, & Voloudakis, (2002) reported that the top reasons universities adopt ERP solutions are to replace legacy systems, improve customer service, transform enterprise processes, correct year 2000 problems, modernize computer systems, improve administration, maintain competitiveness, increase operating efficiency, and adhere to regulatory compliance. 318

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A few Universities, have touted their award winning ERP systems, esoteric ERP success factors, or complex ERP management frameworks. However, other universities have simply stated the benefits of their ERP systems in rather convincing terms (Savarese, 2003). These universities claim that they simply cannot revert to the old way of doing business or use of legacy systems. Yet, other sources firmly deny the return on investment of ERP systems or claim benefits are short lived (Menezes, 1999; Pendrous, 2003). Kvavik, Katz, Beecher, Caruso, King, Voludakis, & Williams, (2002) observed that ERP solutions offer improved services for faculty, staff, and students; administrative, academic, and student data are standardized; university data is globally accessible over the Internet; and the new systems involve less cost and risk than legacy systems. Georgetown University spent nearly $60 million on a campus wide ERP initiative (Blitzbau & Hanson, 2001). Their award winning alumni system now serves over 30,000 students. Louisiana State University implemented an award winning ERP system 1996, which now serves over 45,000 students (Ethridge, Hadden, & Smith, 2000). Course listings, libraries, human resources, e-mail, campus information, public relations, registration, admissions, and other campus functions were successfully implemented. The University of Nebraska-Lincoln successfully implemented an ERP system for recruiting and admissions for its more than 22,000 students (Gaska, 2003). Gaska reports that the University of Houston successfully implemented an ERP system in 1995 to serve 51,000 students using PeopleSoft for recruiting, admissions, registration, student records, and administration. Gaska says Florida Southern College successfully used ERP software from Jenzabar for an online registration for its 2,500 students. Gartner estimates that 80% of universities with more than 1,000 students will implement ERP systems by 2005 (Rivard, 2002). David F. Rico examined the use of ERP solutions by institutes of higher education with respect to cost, technical, and customer risks of implementing ERP solutions by universities. By some estimates, 7.5 out of 10 or 75% of ERP projects fail. This paper examines three successful cases from small, medium, and large Universities, and numerous problematic ERP implementations and lays a foundation for a general management framework for implementing ERP solutions in institutes of higher education. The Meta Group reports that as many as 70% or 7 out of 10 ERP projects end in failure, which is two and half times the industry average (Lewis, 2001). A Computer Associates survey of 886 managers reports 44% of ERP projects lose $1 million per year, 35% lose $5 million per year, and 21% lose $11 million per year (Dryden, 1998). A Deloitte and Touche survey of 164 professionals found that 62% of ERP failures were due to people obstacles, 16% due to business process issues, and 12% due to technology (Krasner, 2000). Unisource experienced a $168 million loss, FoxMeyer Drug and Dow Chemical each experienced $500 million losses, Dell Computer experienced a $115 million loss, and Nestle struggled with a $280 million ERP project, along with Boeing, Apple Computer, and Allied Waste (Bingi, Sharma, & Godla, 1999). Other causes of ERP failures include inexperienced analysts, long work weeks, poor communication, and lack of employee involvement, incentives, and management support (Barker & Frolick, 2003). Aloini et al (2007) collected and analyzed a number of key risk factors and their impact on ERP project success. He classified each risk factor and its relevance during the stages of the ERP project life cycle. Doyle (1999-2000) found implementation ERP can be successful only where the implementation process is based on proper understanding of organization Practices, Objectives & scope etc. Segismundo & Miguel (2008) designed a technique which systematically identifies and investigate potential system weakness through identification & prioritization of CFF is Failure Mode and Effect Analysis (FMEA). Ahsens (2008) explained the objective of FMEA is to prevent unacceptable failure and to assist management in a more efficient allocation of resources. Arnoldia (2010) identified some CSF of ERP these factors were prioritized for Lithuania based on the experts opinions. Plant & Willcocks (2007) identified 22 success factors of ERP implementation and they explained that these factors can be different for each country. Full Hoon & Delgado (2006) identified seven sets of CSF of ERP in organization which explained execution and elevation of ERP. Jiang (2005) evaluated 6 success factors in Finnish organizations which lead to the completing of ERP execution projects. Bernroider and Koch (2001) investigated 12 critical factors which affect ERP directly. Laudon & Laudon (1998) also identified some Critical Success Factors, which if ignored then their negativity could lead to failure of ERP systems. Kim et al (2005): found out that inadequate support from functional units project management and change management are the critical factors which large organizations face in the ERP system implementation.

3. Objectives of the Study

The major objectives of the present study are follows: 319

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To identify the level of performance of ERP in educational institutes of Northern Western region of India. To investigate the various issues that affect successful implementation of ERP in educational institutes. To identify the problems and prospects faced by educational institutions with respect to adoption of an ERP in educational institute. To examine the impact of implementation of EPP on the concerned educational institutes. To identify different the Critical Success/Failure Factors with respect to implementation of ERP in educational institutes. To formulate a framework/model for effective implementation of ERP on educational institute.

Hypotheses In order to study the above mentioned objectives of the present study the following hypotheses have been framed. These hypotheses have been statistically tested through application of relevant statistical tools to derive pertinent objective inferences. H1: There exists relationship between impact of ERP on different aspects of institute management like: HR, Finance, Training & Placement, Administration, Academics, Alumni activities, Admission in institutes of higher education. H2: There exists relationship between limitations associated with ERP being expensive and limited scope of customization across technical colleges and universities has been accepted. H3: ERP system is perceived to be extremely expensive to implement in educational institutions. H4: Lack of continuous technical support is perceived to be limitation for implementation of ERP in educational institutions. H5: Experiences of implementation of ERP is not related with perceived expectation of efficiency & effectiveness that ERP can deliver. Research Methodology The present empirical study is based on primary data collected from the senior functionaries associated with leading educational groups of North Western India through a standardized questionnaire. Data for the present study has been collected from educational institutions and 100 functionaries associated with these institutions through a standardized questionnaire. 60 of these respondents were associated with different Universities whereas 40 respondents were from colleges offering technical and professional education. The data has been put to thorough statistical analysis through application of tools to statistically test the hypothesis to make pertinent and statistically significant conclusions. Summary statistics was performed in terms of Frequency Distribution tables depicting counts with percentage along with average values (mean) for the section Needs catered to by the ERP implementations, Improvisation by ERP system, Limitation of Scope of ERP, Problems and Challenges in Implementing ERP, grouped into type of institution. Chi-square test (p-values were generated for decision) of independences was applied to analyze if any statistical significant relationship existences between the response pattern available on Likert scale for various sections & Institution type. Mann Whitney non parametric statistics (p-values generated) were used to test the significant differences in average score among universities and technical colleges respondents. The existences of degree of relationship between the efficiency & effectiveness of ERP with experiences of respondents were measured by spearmen rank correlations. Also, the impact of various challenges on each other and on the efficiency & effectiveness of ERP were also studied with degree of spearmen correlations.

4. Major Findings and Analysis

The statistical analysis performed on the responses of all 100 respondents was grouped into two major groups: Universities or Technical colleges. The result analysis were further sub sectioned into: Needs catered by the ERP implementation, Improvisation by ERP system, Scope of ERP in educational institutions, Problems and Challenges in Implementing ERP and Relationship between the efficiency and effectiveness of ERP with experiences of respondents. Needs Catered to by the ERP implementation in Education Institutions All 100 respondents were analyzed on likert scale on the issue that whether they think ERP would cater to the needs of various sectors of education industry or not. With respect to Financial Management 92% respondents were on agreed range with p = 0.043 as all technical college respondents agreed while 4 respondents from 320

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universities were neutral and other four disagreed, thus there were significant difference on average respondents of both category respondents (p = 0.008). In concern with HR department 84% respondents were on agreed range with p = 0.000 as again 4 respondents from university were strongly opposing this thus there were difference of opinion between both category respondents (p = 0.001). For Supply Chain Management, Procurement and CRM there were thrust of neutral respondents i.e. 29%, 39% & 45% respectively but overall majority respondents on these three issues were on agreed scale i.e. 61%, 61% & 49% respectively. Also, on issue of SCM and procurement both average responses of universities and technical colleges respondents were almost same as p = 0.075, 0.707 respectively. On the issues like Feedback Analysis, Academics, Registrar Office & Administration and Training & Placement the majority of agreed responses were in the range of 77 89 %. About alumni activities there were same opinion of both category respondents (p = 0.888) and also they think in same pattern (p = 0.076) i.e. agreed 77% same like the issue of admissions i.e. agreed 69% but there were also 31% neutral respondents from which universities respondents were 70% respondents.
Table 1 Average Response of Perceived Impact of ERP in Education Institution Total Finance HR SCM Procurement CRM Feedback Analysis Academics Registrar Office & Admin T&P Alumni Activities Admissions 4.1 3.9 3.5 3.7 3.7 4.3 4.2 4.5 4.0 3.9 3.9 Universities 3.9 4.0 3.6 3.6 3.9 4.6 4.4 4.2 4.1 3.9 3.8 Technical Colleges 4.3 3.8 3.4 3.7 3.3 3.9 3.8 4.8 3.7 4.0 4.1 X2 test 0.043 0.000 0.002 0.001 0.000 0.000 0.000 0.000 0.000 0.076 0.078 MW- Test 0.008 0.001 0.075 0.707 0.005 0.000 0.000 0.000 0.002 0.888 0.039

As per the data in Table 1; there exists statistically significant relationship between impact of ERP on Alumni activities and Admission related functions across technical colleges and universities has been accepted. On the other hand it cannot be statistically proven for other functions like HR, Finance, Training & Placement, Administration, Academics, that there exists statistically significant relationship between impact of ERP on these function across technical colleges and universities. Improvisation by ERP System in Higher Education Institutions In this section respondents were again evaluated on likert scale on various aspects which can be improvised by the implementations of ERP. The analysis showed respondents in the range of 81 % - 95 % were on agreed scale i.e. they believe ERP implementation can improvise productivity (85%), customer service & their satisfaction level (81%), tracking & forecasting techniques (95%), would bring transparency in system (84%), integrations of all subsystems (82%), streaming of various processes (87%) and communications of information in various departments (93%).
Table 2 Average Response for Perceived Extent of Improvement by ERP Implementation Total Productivity Improved Customer Service & Satisfaction Enhanced Tracking & Forecasting Transparency Integrated System Streamlining different Process Communication Flow 4.1 3.9 4.4 4.4 4.0 4.0 4.4 Universities 4.2 4.2 4.6 4.3 3.8 4.1 4.6 Tech Inst 3.9 3.6 4.2 4.5 4.3 3.9 4.1 X2 test MW- Test 0.000 0.005 0.000 0.000 0.000 0.000 0.000 0.370 0.000 0.071 0.301 0.000 0.011 0.000

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Also, significant p-values of chi square (all less than 0.05) suggests there were existences of strong relationship between the both categorized respondents and their response pattern on all facets but on the factors like Customer Service & Satisfaction, Integrated System, Streamlining of Processes and Communications there were statistically significant difference (as all p-values were less than 0.05) on average response but again that was on agreed range only difference on degree of agreement. Limitations associated with Scope of ERP in Education Industry In this section responses were analyzed on likert scale for the scope of ERP system in education industry. 87% respondents on overall were of opinion that present business would be modified to synchronize with new ERP system while on issues like limited customization of ERP there were no exact level of opinion was available from the respondents as approximately 50% respondent were either on disagreed or agreed level. Similarly on rigidness of ERP system in few organizations 41% respondents were neutral while 48% were agreed. 27 29% respondents disagreed that ERP systems will be extremely expensive and perceived lacks of continues technical support in future but on contrary 58- 61 % takes it to be other directions. There was surprising mixed result of average responses (p = 0.00) on lack of continuous technical support were available as all technical college respondents were agreed while among 60 university respondents 27 disagreed and 30 were on agreed level.
Table 3 Average Response of Perceived Limitations Associated with Scope of ERP Total Limited Scope of Customization Synchronization of Processes Expensive Lack of Tech Support Too Rigid for introducing Change 3.0 3.8 3.4 3.6 3.5 Universities 2.9 3.8 3.4 3.0 3.5 Tech Inst 3.1 3.9 3.3 4.4 3.4 X2 test 0.097 0.001 0.905 0.000 0.030 MW- Test 0.292 0.085 0.551 0.000 0.400

As per the data in Table 3; there exists statistically significant relationship between perceived limitations associated with ERP being expensive and limited scope of customization across technical colleges and universities has been accepted. Problems in Implementing ERP system in Education Institutions It was found that all respondents believed that ERP training should become mandatory for everyone as lack of the same can lead to less than optimum utilization. On active participation of all in implementation of ERP system 87% agreed but 4 respondents universities disagreed whereas 7 were neutral. 29 university respondents think implementation of ERP to be not a time consuming process while 32 respondents from technical colleges thinks it to be in future. On issue of being an expensive process mixture of results were there as 25 30 % respondents were thinking in all three directions.
Table 4 Average Response of Perceived Problems in Implementing ERP at Education Institutions Total Expensive Process Training Requirement Time Consuming Active Participation 3.4 4.3 3.3 4.37 Universities 3.5 4.1 2.8 4.28 Tech Inst 3.2 4.5 4.0 4.51 X2 test 0.000 0.000 0.000 0.024 MW-Test 0.221 0.000 0.000 0.477

Challenges in Implementing ERP system in Education Industry The respondents ranked the various challenges associated with implementation of ERP from being most tough to the least tough. It was analyzed that majority of respondents ranked Quality of Software & Time Factor (r = 0.632), training support from vendor with lack of system study (r = -0.556) & cost of acquisition (r = -0.594) in opposite directions but they think resistances from employee and timely customization of software ranked in parallel directions (r = 0.404). On contrary timely customization of software ranked opposite to lack of system support ( r = -0.433).

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Relationship between Efficiency & Effectiveness of ERP with Experiences of Respondents Analysis of relationship between experience of implementing ERP system with its perceived efficiency and effectiveness attained 0.578 spearmen value between experience of respondent with ERP system & its perceived efficiency. It suggests that respondents think for both in same direction but were meager on relationship issue of experiences of ERP with its effectiveness as r = 0.327. About ERP system being perceived as both effective & efficient there was high degree of relationship in the ranking of respondents as r = 0.672.

5. Conclusions
Although almost all respondents perceived that the effectiveness and efficiency of operations of educational institution would improve significantly through the implementation of ERP yet no clear cut trend was observed with respect to nature of their experience with its implementation. If 10% respondents reported their experience with ERP to be an excellent than other 10% reported it to be worse as well. On an average if 53% of respondents reported their experience to be relatively less satisfying than 47% of respondents reported it to be positive. This clearly signifies that ERP as a tool has a lot of potential but its implementation is not yielding positive result for one and all. On an average the respondents did not agree that implementation of ERP can improve the aspects like: Admissions, Procurement, Supply Chain Management and Customer Relationship Management whereas agreement was reported for facets like: Finance, Human Resources, Academics, Training and Placement and managing of Alumni activities. But the highest impact was perceived to be in the areas of: working of Registrar Office and Administration and Feedback Analysis. The respondents were relatively less confident about impact of ERP on improvements with respect to: Streamlining of different organizational processes and work flows and Improved Customer Service & Satisfaction; but they were more confident about impact of ERP on enhancing: Transparency, Communication of information across various departments and Enhanced Tracking and Forecasting. The reasons like: present business processes have to be re-taught, lack of continuous technical support and ERP system being too rigid way of working were termed as major limitation with respect to implementation of ERP in educational institution whereas surprisingly ERP being expensive was not perceived as that major a limitation. The requirement of active participation of all and need for training and handholding were termed as major problems in implementing ERP in educational institutions. Resistance from Employees was reported as the toughest challenge when respondents were asked to rank the different challenges associated with implementing ERP in educational institution. This is further supplemented by the fact that respondents perceived that software are not exactly as per the needs of the organization as there is lack of in-depth system study by the software providers and then the software which is implemented is not customized in a timely manner. Surprisingly, the provision of training support from the vendor and cost of acquisition of the ERP system were reported as being the lesser tougher challenges in that order. Hence, we can conclude that implementation of ERP can reap rich dividends if its implementations issues like: managing resistance of employees, executing system study and timely customization of the software as per the needs of the organization is given due attention. It has also been inferred that the cost of acquisition of the software and provision of training support by the vendor are not perceived as major implementation barriers as they are thought to be.

6. Recommendations
In line with the conclusions cited above it is recommended that educational institutions need to manage the resistance of employees towards the introduction of software through employee engagement, involvement in implementation, education and training about its corresponding benefits that are likely to accrue in near future. It is also strongly recommended that organization should ensure that the institutions that intend to implement ERP need to get actively engaged in system study with the vendor so that software is developed as per the needs of the organization. It is also suggested that ERP needs to be implemented module wise by implementing pilot projects in select department so that software is customized in a timely manner before its full fledged organization wide implementation.

7. References
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