directing and accepting all development work. For each Kuali module, a functional council, technical council, and project manager report to the Kuali board.

Even though Kuali received a startup grant ($2.5 million in 2005) from the Andrew W. Mellon Foundation, the project is funded mainly by partner institutions. As the suites of systems and number of participants have grown, Kuali has evolved three distinct forms of partnership: development, deployment, and sustaining.

The most significant effect of the Kuali effort is perhaps best captured by statements from the chair of the board of the Kuali Foundation: “I don’t think the real story is about open source or particular products. What is really momentous is the pace at which the higher education community is coming together to meet its own needs.” See the sidebar “Colorado State University Early Experience with Kuali” for motivations and effects of Kuali participation of this development partner, which joined the Kuali community in 2007 and implemented its first module, the Kuali Financial System, in 2009.

Institutional Motivations

Since a community source project results in development of open source code, one might expect institutions to take a wait-and-deploy approach, letting other organizations develop the software, then acquire it at no cost when the functionality is mature. 14 Insights from the Colorado State experience suggest this concern is unwarranted. Institutions adopting Kuali software overwhelmingly opt for formal participation in the broader community, raising the question of what actually motivates institutions to participate in the development process;

Table 1 outlines the primary drivers.

Parallels with OSSD

The community source approach fol-
lowed by Kuali participants draws ex-
plicitly on the emergence and success
of the broader OSSD movement. Not
surprisingly, our analysis of Kuali case-
study data identified several points
of commonality that persist between
community source and OSSD, includ-
ing commitment to open source code,
the integrative role of shared values,
widespread distribution of knowledge
(Kuali Coeus), student information
management (Kuali Student), library
management (Kuali Open Library
Environment), business continuity
(Kuali Ready), human capital man-
agement (Kuali People Management
for the Enterprise), mobile device in-
tegration (Kuali Mobility), and mid-
dleware/integration (Kuali Rice) (see
Figure 1).
Although Kuali software is all open
source, the project does not rely on vol-
unteer labor at the level of the individual
developer. The development team op-
erates under a formal organizational
structure within a virtual environment.
The development partners are orga-
nized in a project structure. The Kuali
board makes final decisions concerning
Data drawn from interviews and Kuali Foundation sources;
http://www.kuali.org/join/stories/colostate

Colorado State University was an early adopter of the Kuali initiative’s first enterprise module—the Kuali Financial System—when in 2006 its board of governors acknowledged the university needed a new integrated system for financial management and began to consider its options in early 2007.

Surveying the marketplace, the university’s planners anticipated the new system
would likely be expensive, estimating the starting price for a commercial off-the-
shelf enterprise platform of between $5 million and $7 million. More important,
perhaps, several of the systems on the market at the time lacked the full functionality
they sought. The planners looked into the Kuali platform because it was designed
especially for and by institutions of higher education. In addition, the initial
investment needed to join Kuali was less than 20% of the cost to acquire a similar
commercial platform. Finally, the planners recognized the open source nature of
the Kuali platform would mean developers would gain expertise in the system. The
university thus identified Kuali as an opportunity to create a tailored platform at
much lower cost. The university’s Kuali team leader said, “In January 2007, our VP
asked for a new financial system to be implemented within two years. By late 2007, we
had looked at all the options and decided to deploy Kuali. We got the approval from
the CIO [to go forward with the Kuali implementation].”
The university invested approximately $1 million in 2007, including cash and
human resources, to join Kuali as a development partner. The Kuali Financial System
development leader said, “CSU joined KFS development after they made the decision
for implementation. They joined in the last stage of the development. The formal
organization structure helped them to get into the team quickly and contribute to the
development.”
With a team of approximately 100 developers and support staff, Kuali Financial
System development and implementation were completed in less than two years. In
this process, the university’s team worked closely with its Kuali partners to develop
functionality to address the shared needs of the Kuali community. The team also
collaborated with its own users to ensure the system was tailored to the specific
requirements of the Colorado State environment. The university’s Kuali team
leader said, “I cannot say enough about Kuali. When we encountered a problem in
implementation, we called Kuali. Kuali sent the solution back in three hours and
fixed the documents in two hours.”
By the time the system was implemented in 2009, Colorado State stakeholders had
developed a system that exceeded their functional requirements despite a cost much
less than initially expected. The final cost of the system was under $2 million, less
than half the anticipated price of a low-end commercial platform. The university’s
vice president for finance said, “We were able to implement a state-of-the-art
infrastructure for a fraction of the cost of our peers through a partnership with the
Kuali Foundation… Kuali is the wave of the future. Basically, we [used to] keep 50 sets
of books. Now we can keep them all on one database.”
The university’s vice president for information technology said, “For the campus,
the benefit of the new system is clear. It is Web-based, allowing all authorized users
easy online access… Documents in the system can be routed electronically for
approvals and then electronically stored, saving paper and staff time. Purchasing
is integrated as well. It also supports multiyear budgeting, important for research
contracts. All in all, it will make management of CSU’s finances easier, better, and
more secure.”

Colorado State University
Early Experience with Kuali