Green Dot’s Journey to an ERP Solution

The lessons a large CMO learned on the way to making a major back-office tech investment

Like a kid who needs a back-to-school wardrobe overhaul after a summertime growth spurt, the charter school management organization Green Dot Public Schools found itself needing a significant upgrade to its back-office systems following an aggressive expansion in which its network grew from a single 140-student class at one location to more than 14,000 students across 30 schools in three states.

“The systems we have been using for accounting, purchasing and financials worked well for us when we were a smaller, less complex organization, but not for the $200 million organization we are today,” explains Tae Kim, director of finance for Los Angeles-based Green Dot, whose network today includes schools in Southern California, Washington State and Memphis, TN. “We realized as we grew that we needed to scale our back-office systems to handle data more efficiently and transparently, and to become more sophisticated in how we manage finances.”

So Kim and Green Dot set out to find an enterprise resource planning (ERP) software solution to replace the patchwork of siloed systems upon which the CMO has been relying since its founding class began in 2000. Following preliminary due diligence, the search process accelerated through 2018, to the point where, as of October, the organization was poised to select not one but two enterprise solutions: one an ERP system (mainly for accounting and data management) and the other an enterprise performance management (EPM) system (chiefly for budgeting and forecasting) to integrate with it, with an eye toward beginning the implementation process in 2019.

Just getting to the solution/vendor selection point was a “huge challenge,” Kim acknowledges, even for a relatively well-resourced organization like Green Dot. Along the way, the Green Dot executive team learned plenty about what it takes for a CMO to find the right ERP solution. Here are a half-dozen recommendations from Kim to guide CMOs that are considering their ERP options:

1. Determine who the relevant stakeholders are in your organization and get them involved from the beginning. In Green Dot’s case, members of the management team, as well as internal finance and accounting decision-makers, individual school leaders/executive directors and other education leaders all had seats at the table.

2. Create an internal business case/needs assessment detailing the most pressing pain points that need to be addressed, a “dream list” for addressing those pain points, plus cost parameters, potential cost savings and other key aspects of the ERP decision. Green Dot’s wish list includes:

• A single, integrated finance and accounting system that securely stores financial information in the cloud, seamlessly connects all data and unites all accounting compliance, accounts payable and finance functions.

• A self-service system that generates automated and smart account reports.

• The ability to generate dynamic, interactive easily shared grant reports.

• A smart grant system with automatic checks and balances.

• A robust cloud-based procurement system that is linked to the accounting and finance system and walks users through procurement guidelines.

• An electronic payables system with digital and automated purchase orders and vendor invoicing.

• Cloud-based annual and out-year forecasting.

• Cloud-based budgeting, and

• A cloud-based, dynamic and interactive financial dashboard.

3. Bring in an outside expert for guidance, perspective and support. Only after developing a preliminary internal ERP business case did Green Dot conclude it would be wise to hire a consultant. “We were having a hard time discerning between the sales pitch and genuine value points,” Kim says. “We just didn’t have the background knowledge or experience in house, at the time.” Via an RFP process, Green Dot hired a consultant with specialized experience helping organizations to manage large RFPs for ERP systems. “The consultant has helped us ask vendors the right questions,” he adds. Once onboard, the consultant added value in several key areas:

• helped Green Dot to refine its initial business case.

• suggested dividing the process into two RFPs, one for the ERP and another for the EPM.

• developed a short list of solutions and solution providers in each of the two categories.

The consultant has gone on to oversee the RFP process in each category. “We really noticed the difference between doing the RFP process on our own and having a consultant that could guide us to vendors that could best meet our needs,” says Kim.

4. Define the criteria you will use to evaluate vendors and their solutions. With the consultant’s help, Green Dot devised a matrix of weighted decision-making criteria — a scorecard to help sort through vendor proposals. Those criteria include system compatibility, functional capability and general organizational fit with the vendor company.

5. Put vendors on the spot to prove themselves. With its consultant serving as moderator, Green Dot held discovery meetings with each vendor on its short lists, followed by hands-on demonstrations to allow Green Dot officials to explore the functionality of each system. These live sessions created opportunities for different staff and leaders to ask questions of, and hear answers from, the vendors in real time.

6. Publicize the benefits to strengthen buy-in. People tend to resist change, especially if they don’t understand the “why” behind it. So be sure to communicate to stakeholders throughout the organization about how a new ERP system will benefit them each day in their jobs. Now, having taken each of these steps, Green Dot is on the verge of making one of its most important — and expensive — back-office investments.

Kim says he is confident the returns will come quickly. “At the end of the day, we expect that greater efficiency in how we manage our finances on the back end will result in cost savings and avoided costs, such as fewer FTEs (full-time employees), that will allow the system to pay for itself. And the increased visibility, flow and access to information we expect will empower our administrators to make better, more informed decisions.”