Will there be a disruptive ERP vendor bringing a whole new solution to market similar to what is happening in the LMS market? Probably not, but that does not mean there is not change occurring today. The vendors continue to move forward with the same models and implementing product enhancements or incremental improvements. I find it interesting to hear people ask for the vendors to provide a SaaS version of their products as if this is the change that will impact the market. To date, it seems the vendors either give us a marketing message that states they have a SaaS solution or they let us know that their customer’s are not really asking for SaaS.
Regardless of the messaging, is SaaS the change the ERP vendors should be delivering, given all of the changes in regulations, the continued pressures on costs, the implementation of outcomes based measurements, the increased focus on retention, and the new models for higher education? In his Chronicle article, A Disrupted Higher-ed System, Jeff Selingo does a very good job of describing how different Higher-Ed could be in the future. In his article, Jeff points out:
But unless traditional colleges figure out a way to incorporate the new players and their ideas, such as MIT did recently, the innovators will figure out a way around the credentialing hurdle that will be acceptable to students, parents, and, most important, employers. And when they do, a part of the higher-ed market will be disrupted and rebuilt with students at the center.
The current ERP offerings would have a very difficult time adjusting from a model of managing the students to a model where the student is the center of the interactions. SaaS provides a different implementation model that can provide an institution savings, but also could provide the speed and agility for an ERP vendor to change to a student centric approach. Changing an ERP to SaaS is a large investment in time and cost for any vendor to address. Therefore the challenge for the vendors is how to get the ERP, with its slow development and implementation cycles, to provide the solutions to the new needs of the institution.
SaaS has the Opportunity
Although the vendors will have challenges converting to a SaaS solution, there are a growing number of vendors providing SaaS solutions to help institutions become agile and implement solutions focused on today’s problems. These solutions are not looking to replace the ERP, but to replace components or provide additional value in addition to the ERP. There are numerous examples of vendors implementing solutions:
- WorkDay Higher Education – Provides HR and Finance components to replace the ERP solutions.
- SalesForce.com for Higher Education – Provides solutions to assist with recruitment, alumni, and providing service to your community.
- Oracle/RightNow for Higher Education – Recently purchased by Oracle, RightNow assists with student relationship management.
- TouchNet for Higher Education – Provides solution that work with the ERP to provide enhanced campus commerce solutions.
- EnrollmentRX – Provides CRM for higher education and is built using the Force.com platform from SalesForce.com.
- AcademicWorks – Provides a solution to help manage scholarships.
This is only a small sampling of vendors providing SaaS based solutions to enhance or replace components in the ERP. Some of the solutions may also come from the ERP vendors. For example, Datatel+SGHE’s Faculty Compensation Tracking solution is supposed to be a SaaS solution that works with any ERP.
It will be interesting to look at the Datatel+SGHE merger and evaluate the potential product strategy changes. Merging two companies with similar product lines provides challenge enough, but with the change in Higher-Ed and the risks from the SaaS vendors the company has a number of key decisions to make. Review the timeline in Datatel+SGHE Merger Update.