emerging technology - webster university

Emerging Technology:A Quality Open Source Financial System for Higher Education

Speaker: Greg Deppong, ControllerInstitution: Michigan State University

Speaker: Katie Thornton, Senior ManagerFirm: Plante Moran, PLLC

Date: September 30, 2013

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What we will cover Emerging Technology – Open source

Michigan State University’s Story – What led us to open source for a financial system

What New Implementers See Today

Passing the External Audit – A viable software

Briefing on Supplemental Material

Questions

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Vended Enterprise Business Software

Code – Licensed, not owned

Control – Limited control over timing of upgrades

Customize – Is the software specific enough for higher education?

Cost

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Alternative needed… Acting independently, universities have spent billions

of dollars on enterprise financial systems.

Economic realities may not allow us to continue to support this level of expenditure combined with the inherent lack of creating any economies of scale for those costs across higher education.

What can we do?

One solution…an emerging technology

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Emerging Technology

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Inter-connection and similar goals

Converging technologies

represent previously

distinct fields

Progressive developments

within a field for competitive advantage

Innovation

Emerging Technologies…

Innovation is needed!

Science or Science Fiction?

Examples…

Element #115

Brain to brain

Self-driving cars

3D printing

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Emerging Technologies…

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Progressive Development

Results in Competitive advantage

Results from Research and development

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Converging Technologies…

Collaboration across disciplines

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Converging Technologies…

Starts with Open Source

Open Source: In production and development, open source as a philosophy promotes:

universal access via free license to a software (you own the code!), and

subsequent improvements to it by anyone

Example: Mozilla Firefox

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Converging Technologies (cont.)

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Open Source Organization Support

Community Managed Software

Open Source concept evolves to Community Source

Community Source: a community coordination and organization that builds on the practices of open source:

Higher Education has embraced community source Example: Kuali Foundation

Kuali Foundation: Organization Support

2004, open source in an organized community = KualiProject

Goal: create a financial system…

Built by higher education, for higher education…

using a collaborative community approach to design an open development platform, and…

a web-based operating environment.

The Kuali Foundation established to hold intellectual property and provide an organization structure to coordinate software development

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Organization Support means Stronger Interconnection & Similar Goals…

Kuali Foundation community includes colleges, universities, commercial consulting firms

Momentum…How the Kuali Financial System (KFS) project got started

$2.5 million grant from the Andrew W. Mellon Foundation.

Project formally announced in August 2004 with expressed support from NACUBO.

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Stronger Interconnection & Similar Goals (cont.)

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2004

Creation of KFS begins

Oct 2006

First release of KFS

July 2007

First implementation at a University

Nov 2007

Second release of KFS with

modifications

Mid 2009

First large-scale

installations of KFS

Jan 2011

MSU goes live with KFS

Today

The Software! Is it really FREE?

Yes, the software is free – Download. Configure as desired. Go! Upon release of upgrades, repeat.

Yet – Institutions interested in a direct role in solving problems and influencing the direction and improvements to the system pay a ‘community partner’ fee to do so.

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The Software! (cont.)

Is it really FREE?

As with all systems, there are costs:

Implementation, ongoing technical support, training. Costs of peoplepower and upkeep.

‘When we say free, think free puppy not free beer.‘ -Brad Wheeler, Indiana University

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In KFS, progress has been made by to create an economical, functionally scalable, and sustainableenterprise financial system across higher education(large research, publics, privates, community colleges).

How did we get here?

Let’s flash back to MSU’s specific experience…

Progressive Developments For a Competitive Advantage…

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2004 – MSU Needed a New Financial System

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Web-based and electronic

workflows needed

Chart of Accounts

Limitations

Manual Processing

Legacy System: 40

yr old mainframe

MSU’s Assessment Consideration of a new system

Cost – Avoid unreasonable costs of maintenance

Business Processes – Review current processes

Control – Over timing of changes

Applicability to higher education – corporate systems may need costly customizations

Transparent – MSU had concerns that paperless compromises transparency

About this time, MSU introduced to KualiProject

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MSU’s Assessment

Indiana University had an idea

Several institutions needed a new financial system…why not do it together using IU’s base code

MSU jumped on the bus!

This led MSU to an emerging technology

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Michigan State University

MSU Embraced an Emerging Technology

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2004

Founding Community

Partner of KualiFoundation

2004-2008

Contributed to the design and building of KFS

2009-2010

Prepared MSU for

implementation of KFS

2011

‘Go Live’ with KFS

implementation

Now

Current community

partner



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2004

Founding

Community Partner of

Kuali Foundation



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2004-2008

Contributed to the

design and building of KFS



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2009-2010

Prepared MSU for

implementation of KFS



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2011

‘Go Live’ with

KFS implementation



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Today

Sustaining Community

Partner

What does it mean to be a Community Partner?

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As a community member, MSU and others:

Participate in weekly calls regarding functional development

Collectively assign tasks

Bringing thought leadership for software maintenance (e.g. bug fixes) and future code enhancements

This results in the sustainability of the code

It is up to the partners to keep the code relevant

Value Through True Ownership

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True Ownership

Code is free and the code

belongs to your

institution

Control your own destiny

as a community

partner

Control over upgrades and

scalability

Controlled costs via

ownership

Do You Save Money?

Indiana University reports:

"Indiana University has saved nearly $20 million by joining

with other universities to reduce administrative costs for

essential financial software systems.”

“In successfully implementing the Kuali Financial System

and transitioning away from more expensive, less

dependable third-party financial management, we've also

freed up more university resources for our core missions of

teaching, learning and research." ~ Source: IU News Room, http://newsinfo.iu.edu/, 4//18/13

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http://newsinfo.iu.edu/

http://newsinfo.iu.edu/

Projected Costs

Michigan State University:

Annual cost of Kuali Foundation KFS Community membership = $135,000

Annual cost of KFS maintenance = $495,000

Annual cost of finance system developers = $862,000

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BenefitsControl over the software

Intuitive system for higher education users

Transparency in transactions

What about the External Audit? Successfully serves as the financial system of record for several universities and colleges.

Speaking of audit……

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Audit – #1 Support in Early StagesAssessing the quality of this emerging technology – External Auditors

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PlanningOld System

UnderstandingPaper-sparse

conceptTransparent transactions

Audit – #2 Go Live TestingAssessing the quality of this emerging technology – External Auditors

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System Controls

Conversion Testing

Policies & Procedures

Audit – #3 Audit of New SystemAssessing the quality of this emerging technology – External Auditors

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Access and General Controls

Change Manage-

ment

Workflow Design

Audit – #4 Audit ImprovementsAssessing the quality of this emerging technology – External Auditors

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Effective Audit

Control Testing

View Only Access

Workflow Approvals

Audit

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Unqualified Opinion!

Final Thoughts

KFS is viable software; the support community is strong

A cost effective alternative exists for financial systems

An ongoing process for improvement and innovation

A true Emerging Technology!

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Questions

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Thank You!

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Supplemental Material

Kuali Foundation: More than a financial system

Other Kuali Foundation Projects/Software

72 Members

12 Kuali Days User Conferences

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Kuali Rice

Kuali Coeus –Grant

administration (pre-award)

Kuali Student Curriculum

Management

Kuali Mobility 2.0

Kuali People Management

for the Enterprise

Kuali Open Library

Environment

Links…

IU saves nearly $20M with open source financial system http://newsinfo.iu.edu/news/page/normal/24137.html?emailID=24137

www.kuali.org

Kuali Days 2013 – November 18-21 in San Diego -http://www.kuali.org/kd/2013

http://facultyrow.com/profiles/blogs/open-source-in-higher-education

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http://newsinfo.iu.edu/news/page/normal/24137.html?emailID=24137



http://www.kuali.org/kd/2013

http://www.kuali.org/kd/2013











Kuali Foundation

Kuali.org – Source code, software ‘test drive’, etc.

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emerging technology - webster university

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