5 Reasons to Think Beyond the ERP for Your Financial Aid Management (FAM) Solution
For decades, higher education institutions have used an ERP/SIS to manage all facets of their operations-including financial aid management (FAM). That one-size-fits-all model sufficed when introduced in the 1990s, but higher education has evolved-and so should the FAM. As James Wiley, Principal Analyst at Eduventures writes, “At first glance, one might think that financial aid solutions should satisfy three key requirements: allow students to apply for, track, and receive funding. In reality, however, financial aid is a complex web of systems. Any solution worth considering must be able to handle the complexity of the contemporary financial aid ecosystem.”[1]
These reasons have prompted institutions to reassess their ERP-provided FAM and instead move towards a best-of-breed solution:
1. Limited functionality restricts the Financial Aid team’s and institution’s ability to serve diverse student needs
As a means of serving a more diverse student population, institutions increasingly offer alternative, flexible enrollment models, which in turn increases student enrollment and promotes student success. But, ERPs do not support these flexible enrollment models. This forces Financial Aid teams to compensate via manual, time-intensive processes that often result in service levels that fall far below student expectations.
2. Manual effort means less time for financial aid counseling, a necessity for increasing enrollment and retention rates
Financial aid drives both prospective and existing student behavior, yet most institutions have nominal time to invest in students’ financial education and counseling. Investing in these high value activities is critical to an institution’s success, yet near impossible when the Financial Aid team spends its time doing manual entries and overrides, and shifting through numerous screens of data to answer a simple question.
3. Long ERP implementations are no longer realistic
“Large ERP projects don’t work anymore. You can’t take three, five or 10 years to implement an ERP; and by the time you do it, it’s obsolete,” states Joanna Young, Vice President for IT and Chief Information Officer, Michigan State University.[2] Financial Aid Departments need solutions now that will enable them to become more nimble and capable of supporting innovation. The opportunity cost of waiting multiple years is too high and the stakes are too great.
4. The Financial Aid module is a low priority for the ERP companies
The ERP market is in flux. Two of the major ERP providers recently announced a move to the cloud. A third cloud-based ERP is developing a financial aid module, currently offering only limited functionality. In many cases, more questions than answers swirl around the direction of the ERP providers, but one fact is certain the ERP providers develop and release the financial aid module last, leaving the financial aid community to question the ERP providers’ interest in bringing to market an innovative financial aid solutions.
5. Best of breed, proven success
Best of breed solutions are proving successful in higher education. For example, institutions are realizing tremendous successes with their best-of-breed Customer Relationship Management solutions (CRM). Built to automate and manage the admissions process in a fashion aligned with student expectations, they also integrate well with existing ERPs and offer the Admissions Department a package of advanced tools to improve their interaction and engagement with prospective students. Similarly, a best-of-breed FAM will aid the Financial Aid department in getting closer to their goal attainment in a highly efficient, and innovative way.
As with any department, the Financial Aid office needs sophisticated and innovative tools to achieve success. Tools are needed that large ERP providers simply do not offer. According to Gartner Group, “although enterprise resource planning (ERP) vendors offer numerous enterprise applications and claim that their integrated system is a superior solution, all modules in an ERP system are rarely best-of-breed.”[3]
Take the time to consider best-of-breed FAMs for your institution and learn about the efficiency, and productivity gains you will be able to realize.
Other resources you might enjoy:
Brandman University Case Study
[1] https://www.eduventures.com/2017/08/financial-aid-solutions-not-quite-expect/
[2] https://evolllution.com/opinions/audio-best-of-breed-vs-erp-whats-higher-ed-today/