In February 2006, William Lewis, Vice Provost and Chief Information Officer of Arizona State University (ASU) requested approval for funding of the Oracle PeopleSoft Student Administration and HR/Payroll ERP system. The goal was to "improve service to the community, improve recruitment of students and staff, minimize costs, and begin to coordinate
services across universities to simplify student access to university resources." The estimated cost was $23 million, including $6.7 million in staff costs over five years and $16.3 million in implementation costs over five years. The Student Information System portion of the project was targeted for completion in fall of 2006 with the HR/Payroll portion of the project to be delivered no later than the end of 2007. The project was a key component of ASU's 10-year plan to increase in size and scope while increasing academic quality. ASU is already the nation's fourth largest university and has set a goal to increase enrollment by more than 55 percent for a total enrollment of over 90,000 students. ASU's vision is to become "The New American University." 19 ASU took an unconventional approach to installing its ERP software. They decided to follow a strategy of strict adherence to planned project milestones and to start-up various components of the software on schedule-even if it meant cutting back on planned testing and that all the glitches and issues were not been identified and resolved. Problems would be fixed on the fly as they arose. It was anticipated that there would be problems as workers and students started using a system that wasn't rock solid, but managing through the problems was part of the plan. Mr. Adrian Sannier, ASU's technology officer, calls this strategy, "‘implement, adapt, grow,' since it not only relies on the IT department to fix any technical glitches, but also requires employees and students to help identify problems, as well as to adjust to working within the new system."20
ASU planned to implement the ERP system in a scant 18 months even though other similar sized institutions had taken over four years. Sannier was willing to spend money on additional project resources and consultants to fix problems rather than risk missing a deadline.21
ASU began using the new payroll system on schedule in July 2007, at the beginning of its fiscal year. Not unexpectedly, there were problems right away. For a variety of reasons, some 3000 employees were underpaid or not paid at all, while other employees were paid thousands more than they should. To compensate for these problems, the HR department
was directed to write checks on the spot to any employee with an erroneous paycheck. Unfortunately, there were so many errors that the check writers could not keep up with the underpaid employees who overwhelmed the HR offices. In some cases rather
than write a new check, check writers asked hundreds of employees to wait for up to a week to receive a corrected check.
Over time payroll calculation errors were corrected and timesheet data collection procedures were smoothed out. The new payroll system error rate is down to around 4 percent, which is lower than the 6 percent error rate of the old payroll system. The final cost of the project was a total of $30 million, $7 million over the Feb 2006 budget request
Questions
1. With the benefit of 20-20 hindsight, how might the problems with payroll checks been significantly reduced?
2. Do you suspect that there might have been serious problems with the Student Information System portion of this project as well? Why do you think there seems to be no documentation of problems in this area?
1. There is mixed reaction to ASU's implementation approach and its results. Imagine that you have been hired as a consultant to assess whether or not the ASU strategy was effective. Identify six people (by role or title) that you would want to interview. Identify a set of four or five questions you would ask each interview subject.
2. Would you recommend the ASU approach to other universities? Why or why not?