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University's financial framework will be replaced

STANFORD -- SNAP, SUFIN, SPIRES and DEMS soon will become acronyms of the past.

Over the next two years, the university will phase out many of its aging, home-brewed financial software systems and replace them with commercial products purchased from Oracle Data Systems of Redwood City as part of a $22.6 million upgrade recently approved by the Board of Trustees.

The "core financials" project is the largest systems project Stanford ever has attempted, and it ultimately will affect more than 2,000 employees. It is also the largest effort in a series of related projects that are part of an ongoing four-year, $60.7 million campus investment in administrative systems, networking and academic computing, and related infrastructure.

"We are replacing the core financial framework of the university," said Mariann Byerwalter, vice president for business affairs and chief financial officer, who is spearheading the ambitious effort. "This is noteworthy because it is an important step in preparing the university financial management and infrastructure for the future and allows us to address critical business issues."

According to material prepared for the trustees, the primary purpose of the change-over is to "enable better budget management at all levels, improve transaction processing and data availability, and enhance internal and external financial reporting capabilities."

Because the project is in its initial phase, exactly how it will affect employees who handle office and department budgets, buy and pay for products, track grants and prepare financial reports will depend on developments and decisions that have not been made yet. Two directions, however, are already apparent: Departments that have been using dumb terminals or Macintosh computers that are more than five years old to handle their finances will be forced to upgrade to at least Centris level. And Windows PCs will replace Macs as the officially sanctioned desktop platform.

Controller Susan Calandra said there are major shortcomings in the current financial software that the new programs are expected to fix. In the past, the university has closed its books only once a year and hasn't had the ability to produce interim reports that compare actual spending to what has been budgeted. Revenues and expenses have not been consolidated, but have been managed in a variety of separate funds. Offices, departments and principal investigators have not been able to get timely information about their accounts, so they have been forced to maintain duplicate information in "shadow systems" ­ typically spreadsheets that allow office managers to track account balances and expenditures on a daily or weekly basis, she said.

Glen Mueller, chief information officer, said that "our current programs are homegrown. They are quite sophisticated, but they are in an older architecture. The general ledger and accounts payable are more than 20 years old. We want to make use of the marketplace, to move to open systems that are easier to integrate.

"Oracle's major advantages are its Internet savvy, the breadth and depth of its technology offerings ­ including applications, development tools and consulting services ­ the fact that it's the world leader in database applications, and the fact that it is pushing the envelope on a number of Web strategies," Mueller said.

Stanford is not the only university making this shift, Mueller said. The University of Pennsylvania and the University of Pittsburgh recently installed similar Oracle software packages, and Yale University has signed with the company, which is the second-biggest software company in the world, with more than $4 billion in annual revenues. A number of Silicon Valley companies with close ties to Stanford ­ including Cisco Systems, Netscape, Sun Microsystems, Octel and Silicon Graphics ­ also use Oracle's financial programs.

"The significance here is that we have developed a close working relationship with this set of corporate and university partners that have to solve many of the same issues that we do regarding network security and ease of use," Mueller said.

The project's leaders have set up a two-year timetable, and Oracle expects to deliver Stanford's software package in spring 1997. In February 1997 a group of "key users" on campus will begin test-driving near-release versions of the software. In September, the group of users will be expanded to 350, and the campus formally will switch its "official system of record" to the new software. Finally, starting in October, users throughout the campus will be trained and begin using the new system during a six-month "rollout" period.

Oracle Financial Applications Suite

The Oracle Financial Applications Suite, which will replace Stanford's "legacy" systems, includes general ledger, purchasing, payables, fixed assets, project accounting, receivables and financial analyzer programs.

Many of the legacy programs are 15 to 20 years old and were constructed from the Stanford Public Information Retrieval System (SPIRES), a home-built database program that has about reached the end of its useful lifetime, according to the administrators involved.

Old programs being replaced include SUFIN, the Stanford University Financial Information Network; SNAP, the Stanford Network for Acquisitions and Payables; general ledger, accounts payable and receivables programs; and the Equipment Inventory System used for capital asset management.

When asked if he had any regrets about replacing the old, home-built programs, Ced Bennett, the director of applications support at Information Technology Systems and Services (ITSS), replied, "It's like moving. You feel some nostalgia for the old house, but you are excited about the new place."

The Oracle purchasing and receivables package will play into the ongoing "BuyPay" re-engineering effort that was begun in 1994 to "develop a streamlined purchasing and payment process focused on customer service and reducing base costs by one third," team members said.

Nancy Ware, who leads the purchasing and payment team for the core financials implementation, is learning the new software. "We are just now beginning to get detailed knowledge of the package, but it appears to have enough flexibility so that it can be used to support the way we do business, rather than directing the way we do business," she said.

She advocates providing users with a broad range of capabilities and letting them choose what to use. She said that as she has gotten a closer look at the package, she has realized that it has a more centralized structure than she had thought, and so it may not fit university operations as well as she had envisioned. But she added that she is hopeful that this can be corrected in the "Web-enabled" version, which will look and work like Web browsers such as Netscape and Mosaic.

She said she was impressed by a demonstration of a Web requisition process she recently saw at Oracle that demonstrated the ability to search vendors' catalogs on the Web, place orders electronically and have the information transferred automatically into the proper accounts.

Executive Committee

To manage the complex core financials transplantation process, the university has set up an executive steering committee. It is chaired by Byerwalter and its members are Calandra and Mueller; Provost Condoleezza Rice; Geoffrey Cox, vice provost for institutional planning; Steven M. Jung, director of internal audit; Michael Hindery, associate dean, School of Medicine; Charles Kruger, dean of research; Barbara Butterfield, vice president for faculty and staff services; Timothy Warner, vice provost, university budget; Anne Gaddy, associate dean for administration, School of Engineering; and Haim Mendelson, professor of information systems at the Graduate School of Business. In addition, the group has several non-Stanford members: Sandy Sanderson, the senior vice president of Oracle Systems; Mark Barmann, consultant and former chief information officer at Charles Schwab; and a partner from Coopers & Lybrand yet to be selected.

Gaddy said there is enthusiasm for the project in the School of Engineering. She said that she personally likes the "forward look" of the Oracle software and considers its flexibility extremely promising.

"We know what the goals are, but I go with the old concept ­ 'the devil is in the detail,' " she said. The installation will be successful only if the project team can identify the unique aspects of the university's operations, those that make it different from a company or government agency, and ensure that these features are fixed in the customization process, she said. One of the real tricks of the installation will be differentiating between idiosyncratic practices, which can be changed, and essential ones, which must be accommodated, Gaddy said.

The gaps between standard Oracle features and campus operations are most likely to happen at the school and departmental levels, rather than at the central administration. So it is essential that the functions they need are not shortchanged, as has been the case in some previous software implementations, she said.

Mueller noted that the move toward a Web-based intranet should make it less important whether an employee uses a Mac or a PC. Nevertheless, "we are encouraging people to move to Windows. The reason is that as we move to the marketplace, most software vendors and enterprise-level suppliers write to the market and the market is 95 percent Windows. While we will not be abandoning our Macintosh users, we will be promoting our Windows infrastructure. If you are a core user of some of these applications, you really want to be on Windows," Mueller said.

$1 million for training

Building new interfaces and obtaining new programs is only part of the challenge represented by this project, the administrators in charge acknowledged. Another major aspect is training the myriad people who must begin using the new system.

"We are committing the financial resources to do this. But it will require a sense of teamwork throughout the university and people's commitment and flexibility to get this done," Byerwalter said.

Helping with this transition is a six-person "change support team." Altogether, the university has committed $1 million for training, including $400,000 for new training facilities.

"In the past, training at Stanford has meant going to a classroom, listening to an instructor and then going back to your desk," said change support team member Shelley Hebert. "Our approach will be much different. We are taking an approach called 'performance support,' where we use a variety of means to provide people with help at their desks on the job."

Some classroom instruction will be held, she said, but support will include embedded help screens, telephone hot lines, information and instructions posted on the Web, and local experts who can provide on-site help and guidance.

In addition, the programmers will provide automated routines, called "wizards" in the Windows environment, that can guide people through more complex transactions, Hebert said.

The overall goal is to make transaction processing faster, easier and less expensive. But she cautioned that this "vision" may not be achieved immediately.

"There is an ultimate vision and goal that we are working toward. But we will probably get there in a series of interim steps," Hebert said. All the features probably won't be included in the first versions