Case Detail

Case Summary

San Diego City Schools: Enterprise Resource Planning Return on Investment

Case Number: 5-404-772, Year Published: 2006

HBS Number: KEL174

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Authors: Mark Jeffery; Nancy Kulick; Tim Riitters; Scott Abbott; Douglas Papp; Tiffany Schad; Jed Wallace; Jeff Weimann

Key Concepts

Return on Investment, ERP, ROI, Nonprofit, Enterprise Resource Planning, IT Management, Public Schools

Abstract

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 straight forward to quantify, but do not justify the system. The productivity improvements are harder to quantify, and many can be categorized as soft benefits. Furthermore, 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. The case debrief therefore discusses the tradeoffs quantifying soft benefits and productivity improvements, best practices for management decision making, and the organizational change necessary to realize the ROI.

Number of Pages: 17

Extended Case Information

Teaching Areas: Finance, Management, Operations, Organizational Behavior, Technology, Non Profit

Teaching Note Available: Yes

Geographic: California

Industry: Public Education

Organization Name: San Diego City Schools

Organization Size: Medium

Decision Maker Position: Chief of Business Services

Decision Maker Gender: Male

Year of Case: 2002