By licensing its database research service to business schools worldwide, the Wharton School brand earns high marks.
The potential of the Wharton Research Data System (WRDS) might have gone unrealized were it not for the willingness of key decision-makers - not just at Wharton but throughout the business research community - to re-examine their value proposition. "Quite frankly, it didn't seem like a blockbuster application at first glance," says Thomas Gerrity, the Joseph J Aresty professor of management at Wharton, who was the dean when WRDS (pronounced "words") was deployed in 1994. "It's kind of a pretty good idea. It might be helpful to some people," Gerrity recalls thinking. "But the lights didn't go on; trumpets didn't blow."
No one asked for WRDS. Paul Ratnaraj, then the director of core systems, data services and operations with Wharton Computing and Information Technology (WCIT), pitched the application as a labour-saver after observing that faculty and doctoral students spent 40 percent of their time programming - writing database queries and reformatting data so that they could use it for analysis, and asking Wharton's in-house database experts for help. Academic financial research relies on statistics. Researchers look, for example, for relationships between market valuations and corporate earnings to reach conclusions about how well traditional measures of corporate performance explain the stock prices of the late 90s - crunching data about thousands of companies in the process. Ratnaraj, now CIO with The Pew Charitable Trusts in Philadelphia, figured that if he converted a couple of popular Fortran-based databases into an easier-to-use format and wrote a few screens for building queries, professors and their students wouldn't have to be power users - or need as much help from his staff - to extract the information they needed. "[Users] just wanted the data as soon as possible," he recalls. "They did not need to write the code to manipulate it."
After Gerry McCartney was hired as CIO in 1993, Ratnaraj assessed the costs and benefits of WRDS and collected endorsements from his tech support staff. McCartney gave him $US20,000 to cover the cost of storing the reformatted data. Ratnaraj wrote the original version of WRDS in SAS - the statistical software most faculty use to analyze their data - and programmers Steve Crispi and Son To then used the prototype to build the program. Later, Crispi produced a Web version.
Wharton's faculty was pleased, and the story of WRDS could have ended there. In the ongoing battle with other top-tier schools to attract star researchers, Gerrity, an expert in the strategic use of IT and founder and former CEO of the Index Group, knew technology was a big selling point. Gerrity charged McCartney with building a state-of-the-art IT infrastructure to brand Wharton as a computing powerhouse. WRDS was a brick on the path to IT excellence.
Defining a New Market
While the internal value of WRDS was readily apparent to Wharton's leaders, the decision to sell it to other business schools happened practically by accident. After deploying the system, Ratnaraj wrote a paper about it that he presented at a SAS user conference, then "showed it off" at a meeting of Business Computing Directions, a professional association for business school IT managers. It was then that Ratnaraj realized Wharton was onto something big. "Immediately a lot of other schools seemed very interested in the concept," he says. "And the first question was: 'Can you give it to me?'" In academia, sharing tools among colleagues is the norm.
Despite the giveaway tradition, both Ratnaraj and McCartney thought other business schools should pay for WRDS. "There were real costs here," McCartney recounts. "This wasn't a couple of student programmers bringing something out in an afternoon."
Besides, McCartney figured, the real benefit of WRDS wasn't the code for reformatting the Fortran data or the pre-scripted queries, but the ongoing technical support that Wharton - acting as an application service provider - would provide. Research universities use many of the same databases and hire experts to mount the tapes, maintain them, help faculty run queries and troubleshoot. As McCartney saw it, there was no value to having these same tasks reproduced at every school, and Wharton would benefit by its association as a data services provider. By creating a dedicated staff to support WRDS, Wharton would reinforce its reputation for cutting-edge finance research.
But first McCartney had to convince the Wharton faculty and administration to accept this vision. "Big institutions have very high moments of inertia," McCartney observes. "They're hugely indifferent about many, many things."
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