Mitigating the Risks of Data Migration with a New ERP Solution

If you are planning on moving to a new ERP (Enterprise Resource Planning) solution, one of the project tasks which can be a wild card for both costs and timeline is data migration. Here are 4 key things you can do to minimize your costs and risks associated with this important aspect of implementing your new ERP solution.

  • Be smart about what you migrate.
  • Scrub and test the data yourself.
  • Be OK with less-than-perfect data when possible.
  • Be vigilant in monitoring status of the migration effort.

Be smart about what you migrate

The most important consideration is what to migrate. This should be carefully discussed with your implementation partner during the sales process and incorporated into the statement of work. Key messages here are: 1) avoid “high-risk” sets of data, and 2) focus on what is critical to have.

When we are working with clients regarding ERP data migration, we are often asked to migrate basically everything from their old system. It seems pretty straightforward to them – after all, isn’t “Accounts Payable” data just “Account Payable” data? Well, yes and no.

The risks and high costs of data migration usually involve historical transactions. This data, particularly for modules such as Accounts Receivable and Accounts Payable, is complex to migrate when you consider transactions such as partial payments, credit memos, and write-offs. The data set can have several related documents and they will probably be represented differently in each ERP application.

General Ledger historical data, on the other hand, is usually straightforward because “a journal entry” is pretty much “a journal entry”. Although perhaps 80% of our new clients ask for historical data during the sales process, only 5% are willing to pay for it in the end. Below is a list of what we view as items that are easy vs. difficult to migrate.

Easy to migrate:

  • All master records such as customers, vendors, GL accounts, inventory items
  • General ledger history (multiple years for comparative purposes)
  • Open accounts receivable transactions
  • Open accounts payable transactions
  • Open sales orders and invoices
  • Current inventory quantities at go live
  • Open purchase orders

Difficult to migrate:

  • Accounts payable history
  • Accounts receivable history
  • Sales history
  • Closed purchase orders

So, what do you do if you need this information after cutover but don’t want to pay for it? Keep your old system accessible for at least a year so you have access to that data. If you are like most of our customers, you won’t need to access it very often after 3 months.

Scrub and test the data yourself

Make sure your partner gives you specific templates and data specifications, then take the time internally to do the cleanup of your old data. Work with your partner to understand how to test and validate the imported data so you can also do that. Also, it will be less expensive to hire a temp to do this job if your staff doesn’t have time than to pay a consultant to do it. Finally, have your team keep paper records of the final migrated data comparing old and new for audit purposes and troubleshooting later.

Be OK with less-than-perfect data when possible

Obviously, most of your migrated data needs to tie out exactly with your old system. But in some cases it may not. Decide early why you need each set of data and let that drive your requirements.

For example, if you want sales history for data analysis, don’t sweat the small stuff if it is difficult to migrate. Often, getting the last 10% of your migrated data to match exactly can take as much time as the other 90% did. The devil is in the details!

Be vigilant in monitoring status of the migration effort

This is an area of the project you have to monitor often! It is easy for consultants to get caught up in the process, and not look at the big picture and stop when they should. (But don’t blame them – it is their nature to work through problems.) Budgets can look good one week, and the next week they are blown out of the water because the consultants hit a roadblock and did not check with the customer to see if the benefit of overcoming the roadblock was worth the cost. Stay involved!

A successful project depends on successful data migration. Planning from the start, discussing your options with your partner and continual monitoring will reduce your risks substantially.

Related Posts: