Although recent spending trends have indicated that the HopkinsOne program has been operating at a level significantly over budget, University officials have insisted that they are taking steps to ensure that the multi-million dollar program does not go over budget.
"If we continue to spend at the current rate, then we would go over, but we are taking actions to not overspend," said James McGill, senior vice president for Finance and Administration.
HopkinsOne is a recent University initiative for the replacement of business and administrative systems at Hopkins as well the Johns Hopkins Health System (JHHS), Johns Hopkins Medicine (JHM) and their affiliates. According to the program's Web site, "the scope of the project includes finance, human resources, payroll, purchasing, accounts payable, materials management, and pre- and post-award research administration activities."
"It's a five to six year budget. As of last June, HopkinsOne actually underexpended," McGill said.
Last June, the program was in its earliest stages. HopkinsOne only became high-impact in September when it implemented a change in its software.
"The issue that we're facing is twofold. First of all we are not overspending. But we need to trim costs and the current rate of expenditure to avoid going over the budget," McGill said.
Director of Johns Hopkins Business Systems John Tikka agreed, saying, "The HopkinsOne project is not over budget. We projected a budget overage for fiscal year 2008 that is due mainly to the increased level of support needed.?We have plans in place to keep the budget within the approved parameters."
A major objective of the HopkinsOne project is the simplification and standardization of the software and tools used by Hopkins, JHHS and JHM, which were a conglomeration of many different tools used over the years by the institutions to do different tasks.
"We bought software from SAP, spent money on consulting services and training all of our own people, and on filling positions that needed to be filled," McGill said, "and these are all typical expenditures for putting in a system like this."
McGill explained that the high initial level of expenditure was due to the early stages of the project but said that HopkinsOne would not cost more than originally expected.
"There are only two more years in the program. Ninety to 95 percent is installed and already operating," he said.
The program is expected to end in June 2009. Until then HopkinsOne will be installing upgrades to the system, all of which are included in the budget.
The system that HopkinsOne has installed from SAP supports the people in the hospital and the school and will also have ongoing maintenance costs.
"In the broad context of expenditure it is one that we just have to do. The divisions in the university are paying over time, like a mortgage," he said.
The system of payment involves installments of $5 million each year for 15 years, plus these costs. At this time, HopkinsOne is in its early years of payment.
"It's not that large a sum of money - it is part of a $3 billion a year operation, and for an administrative system," McGill said.
"It's expenditure that if we didn't spend it on this, we would have it to spend on something else, but we had to do this and the cost is built into the system with the planning," he said.
McGill compared the HopkinsOne situation to that of buying a house more expensive than the buyer anticipated - and the buyer must choose not to buy new shingles for his roof in an attempt to stay within his budget.
"We are in the final stages of the project, and trimming back costs," McGill said.
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