At the beginning of the Enterprise Business Systems Projects, university leadership established a set of parameters for the project team. These parameters include three directives and set the boundary conditions for the project team to proceed. The leadership clearly stated that this was to be an encompassing project that included business and operational processes as well as information technology (IT); the scope of the project included the whole of the MSU community not only the central offices; and that the end result must work for the campus community for it to be deemed successful.

Enterprise Systems Vision

Michigan State University recognizes decisions made today regarding a new suite of systems proposed for implementation has the potential to have a major impact on future business. MSU also recognizes that other institutions and organizations have implemented new systems and that there is an opportunity to learn and capitalize on their experiences and expertise. Accordingly, MSU identified other universities regarding completed or ongoing systems projects. The University pulled together comments, suggestions and advice from the schools and continues the interaction following the implementation progress.

In addition, the university identified key universities and alumni in the private sector and sought their expert advice. The decision to reach out beyond higher education and into the private sector was made because they have had significantly more experience with enterprise systems.

Bill Raduchel (former CTO, AOL Time-Warner; former CIO/CFO Sun Computer; former executive Xerox and McGraw-Hill) observed that universities like MSU have "unfortunate scale and structure." While universities are large and complex organizations requiring a multifaceted set of systems to accomplish their work, they cannot justify the large expenditure necessary to acquire a top-end system. Furthermore, due to simplistic design structure, uncomplicated, inexpensive software is not a viable option for large higher education institutions.

MSU received advice to be attentive to typical change cycles of functional software when considering a new array of systems. Sue Unger (CIO, Daimler-Chrysler) recommended a modular approach, rather than a monolithic enterprise resource planning (ERP) system since not all functional aspects will require updating at the same time. Instead of integrating long-cycle function with short cycle function, she suggested adopting right-fit software modules using middleware to link the systems.

Concerns about the frequency and cost of upgrades associated with commercial software packages were expressed by Chuck MacIver (IT Director, Materials, Planning and Logistics, Ford Motor Company). He pointed to a lack of control an organization has regarding updates as an area of concern. There is a high vendor dependency associated with a monolithic system.

Randy Cowen (CIO, Goldman Sachs) conveyed that his organization has been using a modular approach, including middleware, with success for several years. Based on their decision to use modules and integrate them utilizing middleware, they realize significant benefits from standardizing data presentation and information exchange between diverse functional systems.

After a critical evaluation of the extensive information accrued and an analysis of relevant software architecture, MSU decided to develop a future model that connects right-fit modules (system components chosen for their distinct functionality) using commercially available middleware. This approach offers MSU the most flexibility for the immediate and relative future. It recognizes that certain systems (e.g., finances) should not require regular functional updates, and will remain relatively stable over the long term. While other systems will change more frequently (e.g., benefits change annually and Human Resources approximately every two years) and require regular updates because of relatively short-lived functionality.

Thus, the right-fit approach permits the selection of individual functional components on their own merit. This provides a more flexible and cost effective approach, and does not restrict the university to one monolithic vendor. The modular and middleware approach provides MSU with the greatest set of options and control.

Kuali Foundation and Kuali Financial System

Michigan State University has made a commitment both in terms of financial involvement and in leadership activities to the Kuali Foundation, and the Kuali Financial System development effort. The Kuali Foundation is a non-profit organization responsible for sustaining and evolving a comprehensive suite of administrative software that meets the needs of the full range of Carnegie-class institutions. Members of the Foundation are colleges, universities, and interested organizations that share a common vision of open, modular, and distributed systems for their software requirements. The goal of Kuali is to bring the proven functionality of legacy applications to the ease and universality of online services.

The Kuali Financial Systems (KFS) project is currently a group of seven colleges and universities. The group is working collaboratively to develop a community source financial system. Led by Indiana University, MSU joins a number of other core higher education institutions (Cornell University, University of Arizona, University of California, University of Hawaii, and San Joaquin Delta Community College), the National Association of College and University Business Officers (NACUBO) and the Andrew W. Mellon Foundation in developing a suite of modules that is better able to meet the functional requirements of higher education institutions than similar products marketed for a more generic audience. This is the first system development effort sponsored by the Kuali Foundation. KFS will include modules for the general ledger, accounts receivable, budget, capital asset management, contract and grant administration, purchasing and accounts payable, among others. As a development partner, MSU will have the source code and therefore be able to act independently in making modifications.

KFS is dedicated to providing and maintaining a richly featured financial system for use by member institutions. The consortium will work to ensure:

• Indiana University's existing financial information system serves as the baseline of the new system.
• The functionality of the included modules will support Governmental Accounting Standards Board (GASB) and Federal Accounting Standards
• Board (FASB) standards.
• The system supports a strong control environment.
• Thoughtful and timely changes are made to keep pace with advances in both technology and business practices.
• No one member will bear the bulk of the cost for, or reap the overwhelming majority of the benefit/profit from system development.
• An efficient governance and administrative structure is created and maintained to support the member institutions with new or improved functionality, fixes, and service releases.

MSU is a founding partner in the Kuali Financial System project and holds key positions throughout the Kuali Foundation. Members of the University sit on the Kuali Foundation Board, the Kuali Financial System Board and Extended Board, the KFS Functional Council, as well as chairing certain functional teams. The Boards and Council provide the governance structure and development direction for the Foundation. In addition, MSU staff participates in functional work groups and with development work of a technical nature. MSU technical staff members are actively contributing to the development of KFS code, and participating in the Kuali Technical Council.

Participation in the Kuali Financial Systems project is in alignment with the university's decision to utilize a right-fit approach for its upgraded information systems. This approach provides MSU flexibility today and into the future. Modules may be replaced or upgraded, as needed based on evaluations rather than software vendors schedules.

MSU's active participation in the development of the KFS occurred contemporaneously with the development of the university's own requirements for financial system functionality. MSU is committed to performing due diligence in regards to consideration of Kuali as the financial information system. As Kuali is developed, MSU will conduct a thorough evaluation of the functionality of the systems in relationship to the future state requirements gathered from across the campus community. The evaluation process includes determining and defining the future state requirements, testing of the available components relative to our requirements, and consideration of system flexibility for expanding, shaping and modifying.

Human Resource System

Based on benchmarking discussions with other universities, experts from private sector companies and internal discussions, the Project team performed an analysis of requirements and expectations for the Human Resources system. Key decision parameters included the need to install frequent updates to the Human Resources software due to mandated changes caused by legal and regulatory processes. The project team learned through the investigatory process that the benefits and payroll components will require modifications annually and the human resources component will dictate alterations approximately every two years. These recurrent changes, essential to support local usage, result in the relatively short-lived functionality of a system.

The analysis of the information compiled during the inquiry process concerning the implementation of a new array of systems lead the project team to consider three viable options. The project team rejected two options: to purchase the human resources functionality as part of an integrated Enterprise Resource Planning (ERP) package and to write the software.

The recommended approach, to purchase one of the several commercial packages currently available, reflects the opportunity to select a market-tested solution that best fits the university's needs. This decision capitalizes on an existing proficiency and supply of critical dedicated resources that are a fundamental part of an existing commercial software company. The companies have a demonstrated knowledge and skill managing the changes associated with the human resources continuing cycle.

This approach, when combined with the legacy Student Information System (SIS) and a new Financial Services System (Kuali or other) provides MSU the flexibility to select the functionality that most closely matches the University's requirements in these areas. It avoids the requisite upgrade to the finance system every time there is a new human resources release implementation as well as avoiding the internal expense and timeline associated with writing our own code.