By Malcolm Woodfield, Global Vice President, Head of Industry Business Unit Education & Research, SAP

The coronavirus crisis has forced countless businesses to rethink their business model amid disruption and budget cuts. Just as businesses need to adapt, so do universities and colleges. With an increased strain on institutions of higher learning, it is more important than ever to overhaul outdated legacy IT systems that create redundancies and inefficiencies. The modernization of IT systems allows institutions to quickly pivot and avoid losing costly resources. Thriving institutions will need to identify new business models that will enable more fiscal stability in the face of growing economic challenges while meeting the expectations of students, parents, staff, and faculty.

For Pennsylvania State University (Penn State), the benefits of taking on this type of overhaul were clear even before the pandemic set in. Two years ago, the school set out to rebuild its financial systems to be more in line with the quickly changing landscape and best of breed technologies available to large enterprise organizations.

The University’s existing financial systems were not fully integrated and were unable to handle vital tasks like reporting and budgeting as effectively as the University needed. In taking on this digital transformation project, Penn State aimed to achieve several crucial business objectives including: modernizing business practices, increasing agility to meet constantly shifting needs, improve overall financial, budget, planning, and operational services, and the implementation of an easy to navigate system to enhance the end user experience.

To accomplish its goals, Penn State partnered with a team that understood the needs of the entire University with the resources and technical expertise to take on a large-scale digital transformation project. Penn State ultimately teamed up with SAP and LSI Consulting – an SAP Gold Partner – to implement an ERP solution that would update financial systems and streamline business processes. Partnering with SAP and LSI, Penn State embarked on its journey to implement S/4HANA.

Bringing Financial Systems into the 21^st Century

When Penn State started to look at its business processes and operations, the need to revamp its financial systems was clear. The school had a 30-year-old finance, procurement and budgeting system that had built up costly redundancies and increasingly challenged the university’s ability to address the engagement needs of today. The S/4HANA implementation process included 2,616 requirements and 27 critical milestones – all of which were achieved on time and on budget, despite COVID-19 disruptions. The outcome of this process was Penn State’s new financial system built on S/4HANA, the ‘System for Integrated Management, Budgeting, and Accounting’ or SIMBA. As of July 1, 2020, Penn State employees gained full access to SIMBA and new financial tools.

To go along with the new financial system, Penn State also integrated a new instance of SAP Concur, incorporating SIMBA’s Chart of Accounts and expanded purchasing-card processing capabilities. With this addition, Penn State gained access to newer features in SAP Concur, providing better processing and more accurate posting to the SIMBA general ledger.

The integration of S/4HANA proved to be successful for a few key reasons: first, the project team was able to adapt to meet the needs of the current system as migration to SIMBA was under way; second, even with the added stressor of a global pandemic, the implementation team was able to withstand the complications of remote work for the last part of the project.

Deployment does not end with the technology implementation. For a project like this to be successful, the new system needs to be accepted by the end user along with effective change management and training for employees to ramp up.

To ensure a successful implementation, the SIMBA team trained approximately 5,000 employees that needed to be brought up to speed on how to use the new system. The SIMBA team quickly shifted to virtual training once the pandemic forced employees to work remotely. The team developed an extensive support model to ensure a smooth transition to SIMBA. This included identifying super users and employees who could help colleagues learn the system and answer questions.

How SAP S/4HANA ERP Transformed Operations

Building SIMBA on S/4HANA while hosting the system on Azure gives Penn State more flexibility and agility than ever before. Through the implementation process, Penn State gained a clear picture of what the existing processes were and where changes needed to be made. S/4HANA gave the team the ability to combine and consolidate disparate functions and procedures, as well as eliminate repetitive and less effective ones. Streamlining each of these systems led to greater overall performance across financial operations and allowed for a simpler set of business processes to take hold. SIMBA is giving Penn State an edge, and enables a wide range of new operational capabilities including:

• More robust and transparent reporting
• Reduces risk with state-of-the-art IT security
• Replaces redundant financial systems and increases financial transparency
• Optimizes and aligns all businesses processes

In a large organization like Penn State, large volumes of data were collected and stored in separate systems making it challenging to turn the data into actionable strategies. By leveraging the embedded analytics and AI component in S/4HANA, Penn State can store all of its data centrally on SAP’s database and use analytics to inform business processes to make informed decisions in real-time.

Additionally, AI-supported intelligent automation helps streamline and eliminate time-consuming manual tasks. By simplifying these tasks, institutions of higher learning can get a more complete view of operations and utilize the real-time analytics to support the development of new, more innovative business models to match with the current market landscape.

Leveraging ERP Solutions to Stay Agile

In a time when businesses are struggling with the new reality of pandemic-induced remote work, budget crunches and economic problems, universities and colleges are just as vulnerable. Real-time insights increase an institution’s agility and improves outcomes that support the operations of the University as well as free up resources to focus on their core mission of teaching and research. Agility enabled by intelligent technology is more important than ever. There’s little room for time-consuming, inefficient processes at institutions of higher learning, especially as they face back-to-school challenges in a constantly evolving environment.

For Penn State, the objectives were clear – build a new financial system capable of not only supporting operations, but also providing employees the tools needed to learn the new system and to empower them to make speedy and accurately informed decisions to help the institution keep running in unpredictable situations. Predicting the future is a difficult task, however Penn State is mapping the future with better control.

The importance of a digital transformation strategy is expected to accelerate as universities look to adapt to the ongoing pandemic. Penn State serves as an example of how important digital transformation projects can be to an institution of higher learning. Relying on decades-old technology can cost institutions time, money and valuable manpower. SAP S/4HANA empowers Penn State’s digital transformation across its multi-campus financial operations with the trusted security and reduced IT maintenance in the cloud. Embedded analytics in the new system allows Penn State to make data-driven decisions in minutes instead of days, charting their path to financial sustainability and responsiveness to meet the demands of its most critical stakeholders: their students, parents, and employees.