Assess the Strategic Context for ERP Modernization in Higher Education

High costs and high rewards for institutional IT.

Analyst perspective

Reduce the obstacles of modernization.

The higher education sector is experiencing a digital transformation, making enterprise resource planning (ERP) modernization a strategic issue. This shift aims to improve operational efficiency, enhance the student experience, and ensure financial sustainability through robust administrative systems. The ERP market is evolving rapidly, with legacy on-premises systems being replaced by cloud-based, SaaS-driven solutions. Institutions face challenges such as legacy system complexity, data fragmentation, cloud transition uncertainty, and regulatory compliance risks. Financial constraints also require careful cost-benefit analysis to justify ERP modernization investments.

This report outlines a structured approach to modernization, considering deployment options, replacement strategies, time frame alignments, and integration with institutional goals. While cloud migration is trending, adoption is slower due to operational complexity. A comprehensive ERP transformation can exceed millions of dollars and easily take up to seven years to complete. The CIO who begins an ERP replacement is often not the one who completes it. Ultimately, ERP modernization is a strategic shift that empowers colleges and universities to enhance efficiency, ensure compliance, and deliver a seamless experience, but the challenge of achieving those goals is sizeable.

Mark Maby
Senior Research Director for Education
Info-Tech Research Group

Executive summary

Info-Tech Insight

Modernizing ERP in Higher Education is not just a technology upgrade; it is a strategic transformation that requires strong collaboration with institutional stakeholders.

Understand ERP in the context of your institution

What is ERP?

• ERP systems facilitate the flow of information across business units. An ERP allows for the seamless integration of systems and creates a holistic view of the institution to support decision-making.
• In many institutions, the ERP system is considered the lifeblood of the enterprise. Problems with this key operational system will have a dramatic impact on the ability of the enterprise to survive and grow.

An ERP system:

• Automates processes, reducing routine, manual work.
• Integrates with core modules, eliminating the fragmentation of systems.
• Centralizes reporting information from multiple parts of the value chain to a single point.
• A Higher Education ERP has three essential modules: HR, Finance, and student records.
• Traditionally, alumni records was a common fourth module, but this is less common today.
• The ERP vendor will have other modules, but they are considered secondary to the three main modules listed here.

Higher Education ERP

Service-Centric

In Higher Education, an ERP is focused on the data relevant to students, faculty, and administration.

Banner, Peoplesoft, and Colleague are the dominant systems across ERP modules

While vendors are pushing their customers toward new SaaS products, most institutions are still using legacy systems.

Workday has been the disruptive influence moving the ERP sector toward SaaS-based systems. However, Workday has primarily been adopted for its Finance and HR systems (9% and 10%). Student systems have not seen the same adoption (3%).

Sources: Educause, 2023 (Finance); ListEdTech, 2025, 2022 (Student and HR, respectively)

Cloud adoption of education ERP systems is expected to continue in the next decade

Cloud-hosted systems are not necessarily SaaS-based systems. Many institutions are lifting their current ERP system to a cloud platform and moving away from on-prem hosting.

The transition to cloud-based ERPs is slower than the transition to cloud-based LMSs.

• In 2013, 38% of Higher Education LMSs were implemented in the cloud. This is comparable to the 33% cloud ERP implementation in 2024. By 2023, over 90% of LMSs were cloud-based.
• The transition to the cloud-based LMS was instigated by SaaS-based disruptors like Canvas and D2L. Workday has played a similar but less effective role in instigating the transition.
• While SaaS platforms for LMS supported the need for student interaction across mobile platforms, the student records system is highly customized to each institution, making the SaaS transition much slower.

Source: ListEdTech, 2024

Assess the strategic context for ERP modernization in higher education

Modernizing ERP in higher education is more than a technology upgrade; it is a strategic transformation that requires strong collaboration with institutional stakeholders.

Responding to Disruption

Improve operational efficiency by streamlining workflows.

Enhance decision-making with real-time insights.

Optimize resources by integrating financial and administrative processes.

Ensure compliance with evolving regulatory requirements.

Empower students and staff with modern self-service access.

1 Assess the Strategic and Cultural Context:

• Environmental factors
• Organizational goals
• Technology drivers
• Institutional needs
• Internal enablers
• Internal barriers

2 Value Streams, Capabilities, and Processes Within Scope

Define your organization’s key capabilities through cost and competitive advantages to understand its current organizational state and what it needs from a new ERP system, vetted through a value chain analysis.

Student Lifecycle Value Stream

Institutional Capability Map

3 Analyze SaaS-Based ERP Vendors

Review the vendor functional criteria that Info-Tech analyzed for key players in the SaaS-based solutions in the higher education ERP market.

Institutions looking to modernize their ERP should consider deployment options, replacement options, and time scales

ERP modernization initially begins with decisions on what to modernize, how to approach the change, and when to begin.

Deployment Options

On-Prem ERP:

For institutions with strong IT capabilities and regulatory requirements for full control of data.

Cloud-Based SaaS ERP:

For increased scalability, reduced complexity, and faster access to innovations.

Hybrid ERP:

Combines on-prem and cloud elements for institutions transitioning to the cloud gradually.

Replacement Options

Full ERP Replacement:

For outdated systems that require significant modernization across all functions.

Modular Replacement:

Modernization in specific areas where a full replacement is not advisable.

Lift-and-Shift:

Moving the existing ERP to a cloud environment without significant reengineering; a temporary solution.

Timing and Time Scales

Immediate Replacement:

3-5 years for phased implementation; up to 7 years for full ERP replacement.

Deferred Replacement (2-5 Years):

For institutions without immediate risks but in need of modernization within the next 5 years.

Long-Term Replacement (>5 Years):

For those with stable systems and lower urgency for modernization.

Leverage Info-Tech’s research Identify a Resilient Approach to the Future of Your Higher Education ERP

Look beyond the standard considerations for ERP modernization and consider how IT can best support the long-term strategic goals of the institution. Not only will the decision involve an assessment of IT’s capability but also the institution’s maturity to deal with the change that modernization brings.

Download Identify a Resilient Approach to the Future of Your Higher Education ERP

Explore environmental factors, institutional need, goals, and technology drivers

1. Identify institutional drivers that are contributing to the organization’s need for ERP.
2. Understand how the institution is running today and what its future will look like. Try to identify the purpose of becoming an integrated organization.
3. Consider external factors, organizational drivers, technology drivers, and key functional requirements.

Activity 1 Explore strategic factors driving ERP modernization

1-3 hours

1. Identify strategic factors that are contributing to the institution’s need for ERP modernization.
2. Understand how the institution is running today and what its future will look like. Try to identify the purpose for becoming an integrated organization. Use a whiteboard or flip charts and markers to capture key findings.
3. Consider environmental factors, organizational goals, technology drivers, and institutional ERP needs.

For further elaboration on ERP strategy, refer to Info-Tech’s blueprint Build an ERP Strategy and Roadmap.

Download Build an ERP Strategy and Roadmap

What are the environmental factors affecting higher education?

These factors can provide context for both the need and risk for ERP expenditure.

Financial and Economic Pressures:

• Declining public funding, declining birthrates, lower foreign student numbers, and increasing operational costs push institutions to optimize spending through ERP-enabled efficiencies.
• Cost-effective ERP solutions are essential for resource allocation and improved efficiency.

Technological Evolution and Trends:

• Rapid advancements in cloud computing, AI, machine learning, and big data analytics necessitate the modernization of ERP systems.
• Institutions are pressured to adopt SaaS-based ERP solutions for flexibility and cost efficiency.

Globalization and Competitiveness:

• Institutions competing globally for students and research funding require ERP systems that support international operations and collaborations.

Regulatory Compliance and Security:

• Compliance with diverse regulatory frameworks (e.g. FERPA, HIPAA) and data privacy laws is critical. ERP systems must support these requirements and address security vulnerabilities in outdated systems.

Social Expectations and Equity:

• Increasing expectations for personalized, flexible learning experiences drive the need for ERP systems supporting hyper-personalized education through advanced technologies. There is also a push for equitable access to resources and technology, ensuring smaller colleges have similar capabilities to larger ones.

Download Info-Tech’s research Understand the IT Implications for the Enrollment Cliff

What are the institutional needs for ERP in higher education?

Integration of Information and Processes:

• The unification of administrative and academic processes (e.g. finance, HR, student information) will improve data sharing and ensure a single source of truth for decision-making.

Enhanced Workflow and Automation:

• Increased automation will improve operational efficiency, reducing reliance on manual workflows and paper-based systems while supporting advanced functionalities like e-procurement, grant management, and compliance monitoring.

Scalability:

• Scalable systems will accommodate growing or fluctuating user bases.

Data-Driven Decision-Making:

• ERP systems must enable robust data analytics, reporting, and decision-making tools to support academic and operational strategies.

Standardization:

• Standardized systems facilitate collaboration, shared best practices, and consistency in experiences for students, faculty, and staff.

Enhanced User Experience:

• Modern ERP systems provide user-friendly interfaces and self-service capabilities for students and staff.

Info-Tech Insight

The proposed benefits are readily available from the vendors’ promotional materials. The greater challenge is working with stakeholders to identify their needs, educate them on the possibilities, and implement effective change management.

Organizational goals typically align with these value drivers

Value drivers are factors that impact the success, effectiveness, and overall value of educational institutions and their programs.

The five value drivers listed here typically align with the goals of the institution. Despite similarities, every institution is different. Identify specific organizational goals and use them to inform the objectives of ERP modernization.

Institutional growth and sustainability
Drives sustainable growth, diversifies methods of generating revenue and decreasing costs, and increases student/institutional market reach.

Operational excellence
Provides transparency in the flow of value to the students and faculty, empowers administrative staff, and promotes teamwork.

Instructional and research value
Enhances the experience of students and faculty in their studies. It also supports the funding, development, and dissemination of academic and applied research.

Risk and resilience
Mitigates and withstands rapid changes across the IT landscape, secures student and academic information while protecting personal and institutional information, and easily integrates with current technologies, projects, and strategies.

Brand impact, community engagement, and social responsibility
Differentiates the institution from competitors to external communities while strengthening its position on social responsibility.

Technology drivers include not only innovations but also the resolution of redundant technology

Innovations

Cloud and SaaS models reduce future support for on-prem systems.

Advanced data management tools enable real-time reporting, and enhanced governance and cybersecurity tools can manage these data sets.

APIs and integration tools create a digital ecosystem by connecting ERP systems with third-party applications.

Intuitive interfaces and role-based access enhance user adoption and satisfaction.

AI-driven automation tools boost operational efficiency.

Redundancies

Heavily customized legacy systems are difficult to maintain, and institutions would love to move away from them.

Systems developed in-house are unsustainable due to outdated technologies and lack of support.

Inefficient, old process models in legacy ERP systems need to be replaced by agile, streamlined processes.

Maintaining legacy ERP systems is costly, driving the adoption of modern technology.

Legacy systems are unable to manage the student experience, necessitating modern ERP solutions for better engagement.

Explore enablers and barriers within the institution

• Identify internal factors that act as barriers and enablers within the institution.
• These factors will change from institution to institution, and the local context should be carefully examined.
• Example enablers and barriers are included below. These may or may not align with a specific institution and shouldn’t be considered exhaustive.

Activity 2 Explore internal factors affecting ERP modernization

1-3 hours

1. Identify challenges with the current systems and processes.
2. Brainstorm potential barriers to successful ERP selection and implementation. Use a whiteboard or flip chart and markers to capture key findings.
3. Consider functional gaps, technical gaps, process gaps, and barriers to ERP success.
4. Identify the opportunities and benefits of an integrated system.
5. Brainstorm potential enablers for successful ERP selection and implementation. Use a whiteboard or flip chart and markers to capture key findings.
6. Consider institutional benefits, IT benefits, organizational benefits, and enablers of success.

For further elaboration on ERP strategy, refer to Info-Tech’s blueprint Build an ERP Strategy and Roadmap.

Download Build an ERP Strategy and Roadmap

Case study

Oregon State University's ERP transformation

INDUSTRY:
Education

SOURCE:
Oregon State University

Challenge

Outdated Systems: Oregon State University (OSU) was using Banner, which remained outdated and cumbersome despite upgrades.

Administrative Burden: The existing system was inefficient and costly due to customizations and manual processes.

Data Silos: The lack of integration between various systems resulted in data silos, making data access and use ineffective for decision-making.

Solution

Implementation of Workday for Finance and HR in a Phased Approach: This decision was influenced by Workday's modern architecture. The student module did not meet requirements.

Integration With Existing Systems: Workday integrated with other platforms like Microsoft Data Fabric and ServiceNow to ensure an effective and cost-efficient data flow.

Results

Reduced Administrative Costs: The new system is projected to save $10.8 million annually after the initial three years of investment.

Improved User Experience: The implementation has significantly enhanced the user experience for faculty, staff, and students.

Data-Driven Decision-Making: The system provides real-time data and analytics, enabling better decision-making across the university.

Analyst Recommendations

Engage Stakeholders Early: Involve faculty, staff, and students in the planning and implementation process to facilitate smoother adoption.

Invest in Change Management: Allocate resources for organizational change management to help users transition to the new system.

Plan for Integration: Ensure that the new ERP can integrate with existing platforms and data sources to avoid data silos.

Consider a master data platform to mitigate data egress costs

Data egress charges can make using ERP data outside of the system prohibitively expensive. This is a concern when AI is offering new automation possibilities.

Make sure to check on the cost of data egress from enterprise SaaS solutions

• Data transfer charges out of the cloud provider’s network
• Volume-based pricing means that high-volume egress incurs higher charges
• Regional transfers between zones can also incur costs
• Plan for unexpected data transfers

Mitigate data egress costs with a master data platform

• A master data platform centralizes core business data, reducing the need for data transfers between different systems.
• Consistent, and accurate data minimizes errors and inefficiencies, reducing the need for repeated data transfers.
• Combining data modeling, warehousing, and analytics within a single platform reduces the need for data movement across different platforms.
• The cost of another system can be prohibitive.

Leverage Info-Tech’s research to determine if a master data platform is an appropriate path for your institution

Download the blueprint Develop a Master Data Management Practice and Platform

Compare your institutional capabilities with the ERP functionality

1 Use Info-Tech’s Industry Capability Maps to identify which institutional capabilities require ERP functionality (blue) and which make use of other technology (grey).

2 Consolidate the institutional capabilities into value streams and analyze them against strategic factors.

Strategic Factors

• Risks
• Complexity
• Key Benefits
• Dependencies
• Financial Impact

3

• Map the value streams to the required ERP functionality.
• Assess the functionality of the current ERP system to better guide prioritization of future functionality.