The ERP Wasn't Built for This: What Recent K-12 Research Says About Back-Office Capacity

Financial sustainability has overtaken almost every other concern

EAB's conversations with district leaders found that financial sustainability has overtaken almost every other concern at the cabinet level. The phrase that kept coming up was that districts are "still technically balancing their budgets," but the goal increasingly feels like getting through the year rather than building something durable. The expiration of ESSER funds, EAB notes, "has exposed structural gaps just as staffing and benefit costs continue to rise, enrollment grows more volatile, and inflation drives up operating expenses."

One superintendent's framing captures it: "Every year it feels like we're waiting for the other shoe to drop — enrollment, state funding, something — and then reacting instead of planning."

EAB also notes that leaders are "carrying long lists of initiatives without a clear way to prioritize," and when funding rules or accountability expectations shift, "the plan can quickly feel outdated or misaligned." Districts are in an environment where inputs keep changing faster and faster, often stretching existing systems and staff. Adaptable systems and workflows are required for districts to be as nimble as circumstances require.

Operationally addressing budget pressures

Hanover Research's 6 Ways K-12 Education Is Changing in 2025–26 puts a number on the funding picture: 56% of K-12 leaders expect federal funding reductions or eliminations in their 2025–26 budgets, and districts are responding by "leveraging operational efficiencies and evaluating return on investment (ROI) to ensure they're investing in programs with the greatest impact."

The operational implication often gets lost in the funding conversation. Every consolidation, every program cut, and every grant repurposing creates exceptions in the back office. Position changes funnel through HR. Funding source reclassifications funnel through payroll. Vendor contract changes funnel through accounts payable. Each requires manual coordination across systems that weren't designed to talk to each other.

Where the ERP runs out of room

This is where the back-office reality may diverge from the aspirational story that technology promises. Districts running PowerSchool, Skyward, or Frontline ERP modules will tell you these platforms do their core job of managing financials and storing data competently. The strain shows up in the workflow layer above the transaction: supplemental pay processing that can't track extra duties at the line-item level, personnel actions that require manual coordination across multiple systems, budget transfers that involve paper forms because the ERP can't route approvals.

Ahnaf Tahmid, CFO of South Bend Community School Corporation, put the cultural version of this problem plainly in School Business Now: "the finance office is often viewed as the department of constraints — the 'scorekeepers' who manage the decline." The work of getting out of that role, he argues, requires CFOs to audit operational assumptions rather than just defend the budget line.

Another district CFO discusses how aligning people, process, and purpose is a necessary complement to technology, re-iterating the need for change management and thoughtful implementations.

The compliance load is rising

New W-2 overtime reporting requirements are now in effect for tax year 2026 under the One Big Beautiful Bill Act, with new fields for separately reporting qualified overtime compensation. Districts are required to track and report supplemental pay data at a granularity many of their current systems can't provide without manual workarounds.

Each compliance shift, new categorical reporting requirement, and exception to the standard job classification structure reveals the same workflow gap.

Workflows and ERPs

The research from EAB and Hanover and conversations with ASBO suggest that the operational technology conversation in K-12 has shifted. Leaders and operational staff are considering how to build workflow capability around their ERP that can route approvals, maintain audit trails, and handle exceptions, then write the final transaction data back to the system of record.

The research raises a question worth sitting with: when the operational complexity in a district outpaces what the ERP was designed to handle, where does that complexity actually go? For most districts right now, it goes into staff time.

For districts exploring how workflow automation works alongside existing ERP systems like PowerSchool, our upcoming webinar walks through specific examples and implementation approaches.