UA borrowing $27M for project

FAYETTEVILLE -- The University of Arkansas System will borrow $27 million over 10 years to help pay for an information technology project to replace and update finance and employee management systems for all campuses.

The University of Arkansas board of trustees approved the financing plan Friday during a meeting held on the Fayetteville campus.

Trustees approved the borrowing plan at an interest rate of no more than 4 percent if tax exempt.

"If some or all of the borrowing does not qualify for tax exempt borrowing the rate would be adjusted to a taxable equivalent," states the recommendation from UA System President Donald Bobbitt to approve the finance plan.

"We are engaged in a very large project which is designed to tie the system together," Bobbitt told trustees on Thursday.

Earlier this year, the UA System received approval from the Arkansas Legislative Council for a $59.4 million contract with Pleasanton, Calif.-based Workday Inc. to provide cloud-based software "as a service solution for finance, procurement, human capital management, payroll, time tracking, inventory management, grants management, planning and student information system," according to a document presented to legislators in January.

Steven Fulkerson, chief information officer for the UA System, told trustees Thursday that the project, known as enterprise resource planning, will redefine how the entire system functions "likely for the next 20 years."

But the project will take time to implement, with additional costs beyond the Workday contract.

Fulkerson, himself in a newly created position after starting his job July 1, said hiring is underway for a team to implement what's being called "Project One."

In November, work to design the system for use throughout the UA System will begin, with a goal to start testing it next September and have an initial group of campuses go "live" with the system in July 2020, Fulkerson said.

The UA System includes 14 universities and two-year colleges, plus other units like the University of Arkansas Division of Agriculture.

Fulkerson told the Democrat-Gazette that the UA System also has a related contract with Deloitte Consulting LLP. He said the deal involves paying $36.5 million to help implement the human resource and finance portions of the enterprise resource management project.

The UA System will later publish a request for proposals for a partner to help implement the student information system portion of "Project One," Fulkerson said.

UA System spokesman Nate Hinkel said Fulkerson, who previously led the Arkansas Research and Education Optical Network, known commonly as ARE-ON, is paid $200,000 yearly in his role as chief information officer.

Bobbitt credited Fulkerson with the idea for the UA System taking on the project, describing a presentation years earlier.

"He sold me, he sold the board," Bobbitt said of Fulkerson.

Along with the financing, several campuses added or increased student fees to help pay for implementation of the project.

At the board meeting, Bobbitt and Fulkerson described how the system will boost efficiency.

Auditors, for example, will no longer have to deal with multiple financial systems, Fulkerson said.

"They are literally going to be able to have a detailed view of any transaction throughout the entire UA System," Fulkerson said. He also said the system should help the UA System get "volume discounts" and save money in procurement.

Bobbitt said the different information systems used now cost money.

"When you take in those costs that are already being spent, it will in the end result save resources across the system over its 10-year lifetime," Bobbitt said. Fulkerson told the Democrat-Gazette the contract with Workday covers 10 years.

Fulkerson told the Democrat-Gazette that the "Project One" system is estimated to result in about $35 million to $40 million in lower operational costs over 10 years, though the analysis of avoided costs from having a variety of systems does not factor in implementation costs.

At the meeting, trustee Morril Harriman, a Little Rock attorney, said "it's going to be one heck of a system once we can get it all implemented." He added -- to some laughter -- "and if it doesn't work, we've got Steven to blame."

Metro on 09/15/2018