1. 2013
The San Diego city schools: Enterprise
Resource Planning return on investment
Case Study
Ashish Porwal
501204005
14-Apr-13

2. Question No1: Calculate the ROI for San Diego's ERP system. How can you quantify the
soft benefits of the System and include them in the analysis? This question should include
ROI calculations for the following three scenarios:-
a. ROI based on cost savings only
b. ROI based on cost savings & efficiency improvements
c. ROI based on cost savings, efficiency improvements & soft benefits
Solution: a) ROI based on cost savings only:
Total hard cost savings = $3316709
Total projected incremental yearly costs = $1820000
ROI = (3316709 – 1820000)/ 1820000 = 0.82
b) ROI based on cost savings & efficiency improvements:
Total hard cost savings = $6397834
Total projected incremental yearly costs = $1820000
ROI = (6397834 – 1820000)/ 1820000 = 2.51
c) ROI based on cost savings, efficiency improvements & soft benefits:
Total hard cost savings = $(6397834 + 320000 + 400000) = $7117834
Total projected incremental yearly costs = $1820000
ROI = (7117834 - 1820000)/1820000 = 2.91

3. Question NO2: With the information you have access to, what should Wiemann present
and recommend at the board meeting? Specifically, would you recommend going forward
with the HR system implementation? If not, what alternatives would you suggest?
Solution: There are some options to implementing a HR ERP system that will still achieve some
improvement in efficiency with a smaller upfront cost, but they are less effective in the long term
because of the lack of a central database and increased chance of resistance. There are some
good options or alternatives which can be useful for HR system implementation as given below:
 The district could chose to use independent software packages for the different roles of
HR. They can choose to only upgrade the payroll process by installing an electronic sign-
in system and depositing checks directly. The lack of a central database, however, means
that HR employees still have to enter the same information into separate databases. This
approach will never realize the full benefits of an ERP system and will only increase the
cost of merging databases in the future.
 Another alternative is to roll-out the HR ERP system to only a portion of schools in order
to test out the deployment. While this seems to be less risky than an all-at-once
deployment, it actually increases the chance for failure. Often, the “experimental” group
will encounter unexpected difficulties and give others a bad impression of the ERP
system. This causes resistance to the new system in the other school schools, and also
makes the deployment more time consuming and expensive. It is better to dive in at once
than to drag out deployment.
Question No3: What are the risks associated with the project? Would you advise the school
board of these risks?
Solution: The risk of decreased productivity in implementing the ERP project, but there are
other risks that a voter should be aware of, including the risks inherent in any ERP deployment
as well as the risks unique to the education industry. There are following risks which given
below:
 Any ERP system can fail due to the difficulty of customizing the system for many users
in different locations, known as wide-scale deployment. San Diego City School District
has 180 schools and each needs to be upgraded to the new system.
 Deploying a new system to multiple users and locations at one time greatly increased the
risk of project failure.

4.  Scope creep is another general ERP risk. It refers to expanding the requirements of the
ERP system over the course of implementation.
 A unique risk to the education industry in implementing ERP is the lack of native IT
expertise.
To combat wide-scale deployment and scope-creep issues, the district has chosen to implement
only the Human Resources module of the ERP system. This will help make it easier to upgrade
each site to the new software, and discourage others from trying to “add requirements” that are
not related to HR.
Question No4: What are your takeaways from the case?
Solution: This case focuses on the challenge of quantifying the return on investment (ROI) of a
large technology project, enterprise resource planning (ERP), in the nonprofit environment of the
San Diego City Schools. The school district does not generate a profit, so traditional revenue
enhancement arguments do not work. Instead, the case discusses the internal processes re-design
and system consolidation enabled by the new ERP system. The system ROI is composed of two
major components:
 Cost savings from removal of legacy applications and productivity improvements. The
cost containment benefits are relatively straightforward to quantify, but do not justify the
system. The productivity improvements are harder to quantify, and many can be
categorized as soft benefits.
 Many of the productivity and cost-saving benefits will not be realized without personnel
reductions, which are especially difficult in school districts and government agencies.