1. Higher Education Industry Practice Area © 2003 IBM Corporation The Road Less Chosen: Evaluating Financial Systems and Alternative Paths to Success May 22, 2007 Mark Olson, maolson@us.ibm.com Eric Letsinger, letsinger@us.ibm.com

2. © 2006 IBM Corporation 2Public Sector A Community Source Session and Powerpoint!  Special thanks to all who participated in the “Road Less Chosen” session at the St. Louis Kuali Days Conference. Your great contributions and engaged discussions are captured in the slides that follow. We especially thank Denise Kirkeby from Minnesota State Colleges and Universities for her generous Powerpoint capture.  We enjoyed the session and learned a lot and hope that you did too – you were all great and really helped make this a fun and provocative session! Eric Letsinger and Mark Olson

3. © 2006 IBM Corporation 3Public Sector Agenda  Current Systems  Emerging trends  The process…traditional and Kuali  Commercial vs. Kuali…pros and cons  Is Kuali right for you?

4. © 2006 IBM Corporation 4Public Sector Outmoded Financial Systems of Today…  Aged  Costly to maintain  Not innovative  Very slow – batch oriented, slow response time  Bad performance  Complex code – difficult to maintain  Painful upgrades, and costly  Integration problems – with other central and distributed systems  Platform costs  Poorly trained consultants  Lack of higher education functionality  Counter intuitive

5. © 2006 IBM Corporation 5Public Sector Are you positioned well for tomorrow… challenges ahead  Fair value and historical costs for investments and land  More audits  Vendors dropping support  Shorter time frames  Increasing internal controls and documentation  More GAAP vs. Fund Accounting (need ability to do both as well)  Software is becoming a commodity, changing support model  Lack of competition in software arena for Higher Education  Changing business practices, more frequently  Need for better management of data and management information systems

6. © 2006 IBM Corporation 6Public Sector Two Approaches: Commercial Only or Consider Open Source The Paved Road  Informal analysis of the current system  How are we doing business- what do we need  Formal agreement – we need do something (business plan)  Costs, budget needs  RFP-requirements  Infrastructure needs  Review of vendors-rfp  Identify new goals-future strategy  Select vendor  Re-engineer, training, etc  Write the checks  Resources/back filling staff  New technology integration  Research on interfacing –legacy systems, shadows The Road Less Chosen  Not always an obviously decision  Lack of history, track record, uncertainty  Become part of the process-own time into the development  For some it is an obvious decision  No one to respond to the RFP  No firm implementation plan, little documentation  Kuali not quite finished yet  Lack of a student system or HR system  Role of the community-to fill the gaps  Sole source to foundation  Change in mind set-Kuali is not a vendor, more action on our part  Who is assuming the risk—the institution - how do we handle this issue (ownership)

7. © 2006 IBM Corporation 7Public Sector Risk Analysis: Pros and Opportunities Kuali Systems  “By and for” Higher education industry  Cost savings-licenses and implementation?  Open source is as secure as others  More focused communities  Ability to test drive more adequately and less expensively  Teams may be more committed because of ownership (personal commitment)  More options for fixing broken areas  Upgrades less expensive/fewer resources Commercial Systems Large install base Active communities Predictable implementation costs Team may be more committed- because of the costs (pressure from the top)

8. © 2006 IBM Corporation 8Public Sector Risk Analysis: Cons and Barriers Kuali Systems  Risks  New and untested implementation  Infrastructure, software, business rules, change management -- expectations of the future  Past behavior is not a good indicator of future needs Commercial Systems  Expensive consultants- implementation  Illusion that we avoid some risk w/ a vendor  Infrastructure, software, business rules, change management -- expectations of the future  Less responsive to broken paths  Upgrades more expensive/resources

9. © 2006 IBM Corporation 9Public Sector Characteristics of Institutions Ripe for Kuali  Need to replace existing systems  Letter from current vendors, dropping support  Looking for something new-innovative  Need for new technical architecture  Limited resources  Loss of Knowledge of current staff, may be leaving/retirements  Dissatisfaction with current model/vendors and their process  Strong internal staff that wants to go down this path  Have done their research, compared products  Strong leadership and willing to take risks, try something new  Stakeholders in the functionality of the system

10. © 2006 IBM Corporation 10Public Sector Rationalize the Process  Define the gap between your system and modern systems  Quantify/qualify this gap into a business case for change  Gain buy-in early for considering Kuali  Define system requirements  Conduct cost benefit analysis (Kuali vs. commercial offerings) Software, Implementation Services, Internal and Hardware  Conduct risks analysis Kuali vs. Commercial  Try Kuali via Kualifier and Test Drive  Select and implement

11. © 2006 IBM Corporation 11Public Sector IBM Kuali Overview Today BUSINESS TECHNOLOGY HELP ME DO IT MANAGE IT FOR ME TELL ME WHAT TO DO Strategic Outsourcing Services Application Management e-business Hosting Infrastructure Outsourcing Data Center Desktop Network Managed Storage Learning Services Integrated Technology Services Business Continuity & Recovery Technical Support e-business Infrastructure Networking & Connectivity Infrastructure & Systems Management Global Business Services (GBS) Strategy & Change Customer Relationship Management Supply Chain Management Financial Management Human Capital Management Application Innovation Business Transformation Outsourcing

12. © 2006 IBM Corporation 12Public Sector IBM Kuali Overview Tomorrow BUSINESS TECHNOLOGY HELP ME DO IT MANAGE IT FOR ME TELL ME WHAT TO DO Strategic Outsourcing Services Application Management e-business Hosting Infrastructure Outsourcing Data Center Desktop Network Managed Storage Learning Services Integrated Technology Services Business Continuity & Recovery Technical Support e-business Infrastructure Networking & Connectivity Infrastructure & Systems Management Global Business Services (GBS) Strategy & Change Customer Relationship Management Supply Chain Management Financial Management Human Capital Management Application Innovation Business Transformation Outsourcing

13. © 2006 IBM Corporation 13Public Sector Limited IT Resources is the biggest barrier to adoption Source: A-HEC, 2006