The Johns Hopkins Gazette: June 24, 2002
June 24, 2002
VOL. 31, NO. 38


JHU/JHHS to Retool Biz Systems

By Greg Rienzi
The Gazette
Johns Hopkins Gazette Online Edition

A quantum leap forward is on tap for Hopkins' business systems. Think of it as upgrading from a version 1.1 to a 10.5.

The university and health system are looking into an unprecedented, massive overhaul of the major administrative and financial systems across nearly all Hopkins entities. Specifically being considered is the implementation of a single software-based system that would tie together and streamline selected business functions, including purchasing, accounts payable, payroll, grants management, general ledger, materials management and human resources.

Project director Stephen Golding, executive director of finance at the School of Medicine, said that what is on the table is an extreme case of out with the old and in with the new.

"The major reason we are looking to upgrade is to modernize. Our current systems are certainly not state-of-the-art, and most of them are not well-integrated with each other," Golding said. "We are looking for systems that are Web-based and reasonably easy to maintain. It is very difficult and costly to maintain all these disparate systems that we have now."

The new system would replace aging legacy systems--some of which are nearly 20 years old--that are considered unnecessarily cumbersome and not cost-efficient.

The project's scope would not include student information systems or patient and clinical billing. Institutions not affected by the proposed changes would be the Applied Physics Laboratory and Howard County General Hospital, both of which historically stand alone in administrative activities.

With an estimated price tag of $50 million to $60 million, the endeavor would likely take three to four years to complete.

The proposed modernization comes as an indirect result of the work of the Business Process Improvement Committee, formed in the summer of 1999 to examine everything about the way that Hopkins does business.

Golding said that through the findings of the BPIC it became increasingly clear that new administrative and financial infrastructure was needed to put Hopkins squarely into the 21st century.

To illustrate the inefficiency of the existing systems, Golding used the example of a researcher who wants to purchase a piece of laboratory equipment. Currently, that person has to go through a "laborious" multistep process on the purchasing end, requiring approval every step of the way, before an order can be placed and then ultimately reconciled with Accounts Payable.

"None of this is integrated. It is all essentially either paperwork, or it's partially paperwork, partially electronic and electronic in a not-so-user-friendly fashion," he said. "Under the new scenario, a principal investigator could go online into a Web-based automated catalog, select a product and basically click a button. That would then generate a process that would include automating the purchase requisition and the purchase order and sending a notice to Accounts Payable. The whole process would be automatic and could be approved essentially in real time after just one click of the mouse key."

Golding said that while huge investments are being made in "brick and mortar projects" at the various Hopkins campuses, it is "equally vital to invest in technology in order to meet the rising business demand."

"We are looking at investments on just the East Baltimore campus of greater than $1 billion," said Golding, referring to the construction of new research buildings and planned renovations to the medical campus, "not to mention all the new buildings on the Homewood campus that we have been putting up. What has happened is, we are getting stretched to the limit in terms of our human infrastructure; we just can't keep up with the growth in business, especially on the research side."

To date, an executive steering committee for the ambitious project has been formed that includes senior representatives from both the university and the health system, and a consulting firm has been retained to help conduct a feasibility study, which is currently under way. Co-chairs of the steering committee are James McGill, the university's senior vice president for finance and administration, and Ronald Werthman, vice president for finance at the Johns Hopkins Health System.

Golding said the feasibility study will determine whether the proposed project can be accomplished across Hopkins entities and through a single vendor, such as an Oracle or PeopleSoft, both of which supply enterprise resource planning systems software.

"We have never tried anything like this before, and frankly, we don't know if we can pull it off or not," he said. "Although our desire is to have a single system that satisfies all the Hopkins entities, we need to objectively assess our ability to do so--organizationally, functionally and culturally."

The biggest challenge, according to Golding, might be the fundamental changes in business practices that a new system would require. In a decentralized institution such as Hopkins, he said, people and departments have developed over time their own way of conducting business.

"So the idea of bringing on a single system that would in many ways influence the way we do things is to some extent a difficult pill to swallow," he said. "However, with that being said, the impetus is certainly there for a major upgrade, and we are prepared to make a significant investment in these systems, even if it is not a joint project between the university and health system."

The feasibility study is scheduled to be completed by late October, at which time the steering committee will determine how and if the project should proceed.