Legislative study finds large potential gains from cloud ERP but flags high upfront costs and governance questions
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Summary
OMB and NDUS briefed the committee on a business‑value assessment and RFI for replacing the state's PeopleSoft environment. The assessment projects sizable productivity and hard‑dollar benefits but vendors' cost estimates vary; NDUS and state staff emphasized phased funding, governance and staff readiness.
OMB's Joe Goplin and NDIT's Greg Hoffman presented findings from a business‑value assessment (BVA) and a request for information (RFI) on the state's enterprise resource planning (ERP) systems, and NDUS CIO Corey Quirk described higher‑education readiness.
The Oracle‑led BVA concluded that legacy, highly customized systems and manual, siloed processes create risk and drag across HR, finance, procurement and grants. The assessment estimated a combined productivity and hard‑dollar benefit of up to $150 million per year if the state adopted a modern, integrated cloud ERP with automation, unified analytics and embedded AI. Specific potential savings cited included reductions in off‑contract "maverick" spend (estimated $46 million/year), project control improvements ($26 million/year), elimination of legacy system debt ($7 million/year) and productivity gains equivalent to roughly $35 million/year.
OMB and NDIT cautioned the committee that these figures are modelled using industry benchmarks and vendor inputs and that a neutral, independent assessment would be required to produce more precise ROI projections. Greg Hoffman reviewed hosting and infrastructure implications: migrating from an on‑prem PeopleSoft stack to cloud hosting reduces some infrastructure and integration costs but replaces them with subscription and implementation expenses; the BVA did not include detailed vendor pricing for cloud subscriptions.
An RFI and vendor demos produced four demonstrators; two vendors could deliver HR, finance and student modules in a single suite; others covered HR and finance only. NDUS and CTS staff stressed that the student information system is a core requirement for higher education and that NDUS continues to seek a phased, cohorted deployment that would avoid "lift and shift" of old processes.
Corey Quirk reminded the committee NDUS had requested $10 million in the prior session for "cloud readiness" work (planning, data cleanup, backfill and organizational change management). He and others urged treating this as a multi‑biennium, governance‑heavy business transformation: staffing, procurement of integrators, data governance, and organizational change management would be the program's critical elements.
Lawmakers pressed for clarity on who would bear costs, whether the state and higher education should proceed together to preserve purchasing leverage, and how to budget across bienniums (direct appropriation, bonding, or staged finance). Committee staff will produce a written report for review and the committee signaled it wants a recommended approach to funding and sequencing for the final study report.