1. Integrated Resource Information Systems IRIS University of Kentucky’s ERP Project October 22, 2004

2. Why did the University of Kentucky make an ERP decision? The University’s current environment consists of independent systems for financial management, human resource management and payroll, student information and administration, and materials management. The legacy systems are highly customized, lack flexibility and no longer have vendor support. Information is not available or easily accessed. Service delivery to the university community is ineffective and inefficient. Business processes are out-of-date.

3. Why did the University of Kentucky make an ERP decision? UK’s technology environment is obsolete, marked by  poor integration of systems;  lack of functionality, requiring many shadow systems;  manual processing, paper-based processes, and little workflow; and  difficulty in remaining compliance with regulations.

4. What is the history of UK’s ERP effort? A committee appointed by the institution’s president recommended replacement of systems in 1999. The effort had 2.5 false starts. Differences in 2003  new leadership  an eager campus ready for change  desire to be competitive in the Higher Education environment  willingness to begin implementation of all system replacements at the same time

5. What is UK implementing in phase one? In Phase One the core functionality of legacy systems will be replaced with SAP solutions. Finance Human Resources Campus Management Materials Management

6. How was the project set-up? The project enjoys executive endorsement. Clearly defined goals and expected outcomes guide the effort. The project is considered a functional effort, rather than a technology project. Activities are funded by a separate budget. UK retains ownership of the implementation process. Consultants facilitate implementation efforts. Implementation responsibilities shared among the informational technology and functional areas. Project team composition represents all affected functional areas.

7. How was the project set-up? Project Team Members  were selected by affected units (Project Director chose only 3/60 staff members)  receive 15% salary increase if full-time on the project (after one year the increase is added to base salary)  receive appropriate SAP training  have clearly defined roles and responsibilities  work in a separate, dedicated facility  are managed by a full-time Project Director and two co-leads (functional and technical) Affected units receive backfill funding. Project Team includes a sub-team dedicated to training.

8. How was the project set-up? Assumptions of the project:  University administrative processes will change to fit the software.  Plans for conversion of data from the legacy system to the new system began early.  Reporting needs were addressed early, with a sub-team dedicated to the policy and reporting.  Project staff members interact with peers at other universities (HESUG, SAPHEG, ASUG, SAP Forums).  Communication to campus is consistent and ongoing; a team is dedicated to change management and communication.

9. How was the project set up? A decision-making framework has been developed and is being used. The Project Team strives to “under promise” and “over deliver.” Risk assessment and mitigation planning are being addressed. The Project Team has learned to work together. Project leaders work to meet the needs of the Project Team members  bi-weekly full staff meetings  welcoming gestures  several office amenities  accessible parking

10. What process did UK use to select software? As a state agency, the University of Kentucky must follow strict procurement policies. UK selected a contract negotiator and used  the Master Technology Agreement (MTA) and  dual-track negotiations. UK issued Request for Proposals (RFP) and conducted bidders’ conference.  Instead of a typical gap analysis, the RFP contained the basic functionality of systems to be replaced.  Vendors were required to agree to negotiate from the Master Technology Agreement. UK conducted campus site visits and reference checks. UK arranged for campus demonstrations by vendors who were finalists.

11. What process did UK use to select software? Negotiation sessions featured:  a strong negotiation team with power to make decisions; and  the use of Master Technology Agreement to create the ground rules for a partnership. Goals of negotiation:  to obtain the best financial deal for UK;  to identify predictability in the cost of ownership;  to understand what we were purchasing; and  to learn more about the corporation and its people to determine best fit for our partner.

12. Why did UK select SAP software? The academic/student area was influential in the decision. UK determined that it could build a strong and productive working relationship with the SAP. References asserted that “SAP works diligently to form partnerships with their customers and to meet customer needs” “SAP values its customers” “If SAP’s staff makes a promise, it is kept” SAP provided  an integrated business solution;  an opportunity for cross-functional, cross-organizational collaboration;  access to real-time online information;  software that can be configured to meet our business needs without necessitating custom programming;  an approach to system architecture that is flexible, comprehensive, sophisticated and proven;  a fully auditable trail of activity, and  workflow native to the application logic.

13. How was the project team prepared? Team members –started working together early –connected with other SAP clients –researched SAP implementation methodology and shared findings –participated in basic SAP project training –drafted the project charter together –developed the decision-making model –inventoried current reports and interfaces –identified current business processes and created flow charts

14. How were UK’s implementation partners selected? UK established clear requirements  transfer of knowledge was the most important requirement  deploy consultants with SAP and higher education experience  provide one point of contact with partners UK issued Request for Proposals (RFP) and conducted bidders’ conference

15. UK’s evaluation team  reviewed proposals and sent list of questions to vendors  met with vendors separately  checked references carefully  narrowed the number of potential vendors and conducted three-day ‘discovery sessions’ based on advise of the University of Cincinnati  asked vendors to resubmit bids based on knowledge gained during the discovery sessions and to bid on only the first two phases of SAP’s five phase methodology (Project Preparation and Blueprinting)  narrowed choices based on evaluation criteria How were UK’s implementation partners selected?

16. A seasoned evaluation team initiated negotiations with the specific goals of:  obtaining the best and most reasonable financial deal for University;  acquiring the right to reject consultants; and  gaining agreement that selected consultants be engaged for the full term of the implementation.

17. What factors influenced the selection of UK’s implementation partners?  Experience in implementing SAP Campus Management  Experience in SAP higher education implementation and with third-party vendors  Excellent references  Flexible staffing plan  Comprehensive understanding of the needs of the hospital system replacement  Clear understanding of SAP’s corporate future strategy and directions

18. We are here. August 9 - December 17, 2004 January, 2005 To be determined during Blueprint Where is UK in its implementation?

19. What lessons has the project team learned to date? Project staff members must be knowledgeable and trusted employees from affected areas. Units must be allowed to choose their representatives on the project. The project team should represent the entire campus. Staff members must be able to tolerate not having answers and working with ambiguity and they must be flexible. The project benefits from a softened image. Communication efforts are never sufficient. The campus must be prepared for the pain involved implementation. A campus geared for change helps the project effort.

20. How do I learn more about UK’s IRIS Project? IRIS Project contact information: University of Kentucky IRIS Project 630 South Broadway Lexington, KY 40506-0564 Phone: 859.257.3514 www. uky.edu/IRIS