Data migration is a vital—but sometimes challenging—step in implementing an enterprise resource planning (ERP) system.
At the heart of every ERP system is a shared database that enables employees across the organization to rely on the same, consistent set of information. When implementing ERP software, an organization has to move data from older systems into this database.
The data migration process can be complex and time-consuming. It’s important to plan carefully and do it right: Underestimating the time and effort required can delay the entire ERP implementation. And the accuracy and completeness of the transferred data is critical, because so many parts of the business—customer satisfaction, decision-making, supply chain and partner relationships—will rely on the database.
What Is Data Migration?
ERP data migration is the process of transferring data from its original sources to the ERP system’s database. It often involves moving data from a variety of different systems, formats and storage types into a single, common structure.
Before the adoption of ERP, some departments may use systems designed to support only their specific functions, such as standalone accounting or human resources applications, while other groups may rely on general-purpose tools such as spreadsheets. To ensure a successful data migration, businesses need to take a methodical approach, which typically includes inspecting, extracting, cleansing and transforming the data from each of these applications before importing it into the database.
- Data migration challenges include time, cost, data redundancy and integrity issues, stakeholder support and potential regulatory concerns.
- Mapping out a clear ERP data migration strategy is the key to a successful implementation. Dedicate a team to analyzing the data, performing the migration and validating the results.
- ERP best practices include starting the migration process early to avoid delaying the ERP deployment and using the migration as an opportunity to weed out obsolete historical data.
Why Is Data Migration So Important to an ERP Implementation?
The data migration process is critical to ensuring that the data in the new ERP system is accurate and complete, which is vital because many people in different parts of the business will rely on that historical data.
Well-planned data migration can help to keep the entire ERP implementation project on time and on budget. It’s also an opportunity to winnow out obsolete and redundant data lurking in the organization’s older systems. In contrast, underprioritizing data migration can cause issues such as inaccurate or duplicate data and challenges to your go-live date.
Data Migration Challenges
ERP data migration can present a variety of challenges:
1. Data redundancy and integrity:
Multiple departments may store their own copies of information about the same customers or products—but that doesn’t mean their data is identical. Each department may categorize data differently.
For example, they may store customer names and addresses in different formats or have different addresses for the same customer. If you simply import every record from each departmental system into the ERP database, you could end up with problems such as duplicated or inaccurate customer lists.
2. Data migration cost:
The cost of extracting, cleaning and restructuring data can add up to a significant part of the overall ERP implementation budget. Even if you are merely moving data from an older ERP system to a newer one, the cost of data migration can add 10–15% to the overall cost of the new system, per a report from ERP Focus.
3. Stakeholder buy-in:
The company’s top managers have many priorities, and ERP data migration may not be at the top of the list. However, buy-in from the top is necessary to avoid internal conflicts. As mentioned, various units may have been using their own disparate systems related to their own business needs, and their staff may be accustomed to entering data in a specific way. Management backing is often necessary to ensure all groups cooperate to produce a single, consistent set of data.
4. Regulatory issues:
A growing number of regional and industry-specific regulations affect the way organizations can store and use data. When transferring data, make sure you comply with those regulations. For example, a healthcare organization will need to follow HIPAA rules that stipulate a six-year retention period for certain documents. Meanwhile, new legislation such as Europe’s GDPR and the California Consumer Protection Act requires that organizations retain the ability to delete all of a consumer’s personal data on request.
4 Steps to Build an ERP Data Migration Strategy and Plan
To shepherd the organization through the sometimes complex process of moving your data to the ERP system, it’s important to create an ERP data migration strategy that encompasses several key elements.
1. Create a migration team:
Put together a group of people responsible for deciding which data needs to be transferred and how to clean it up. The data migration group is typically part of your overall ERP implementation team and will usually include representatives from different business groups who can provide insights into how data is used by their groups.
2. Analyze and map the data:
Examine the data in each of the source systems, looking for redundancies and inconsistencies. The data migration team will need to decide how to resolve those issues before importing data into the ERP system. In this phase of the implementation, you’ll also need to map the data to the structure of the ERP database, so automated tools can import the information.
3. Decide what to migrate:
You may find that older systems contain outdated information: customers that haven’t ordered in years, suppliers that have gone out of business, data about obsolete products. Systems may also contain historical data about old transactions. Much of that information may not be needed in the new system, so you can store it offline or in a separate system depending upon your data retention policies.
4. Migrate, validate and test:
Your new ERP system may include tools that help automate the process of importing data from systems, although you may first have to rationalize the data and in some cases convert it to a form that the ERP system can recognize. Before going live, run tests on your migrated data for every business group and ERP application.
4 ERP Data Migration Best Practices
Following best practices for ERP data migration can help organizations avoid pitfalls and keep the entire ERP project on track. Here are four top practices:
Prioritize data migration. It’s easy to underestimate the work that’s involved in data migration. Data migration is time consuming, and it can delay your entire implementation if you don’t plan carefully. It’s important to start early and allocate enough resources to make sure it doesn’t become a bottleneck. Near the start of the implementation, begin to create processes for extracting and cleansing data from source systems.
Think about broader business use of the data. Before starting the migration, spend time thoroughly analyzing your existing data, thinking about how it will be used within the ERP system, mapping it to the structure of the ERP database, and setting up rules for translating the data to the new structure during migration. An ERP implementation is an opportunity to get better insight into the business in real time by analyzing its data. So, when migrating, think about how data will be used for decision-making across the whole business, as well as by each department.
Assign data governance responsibility. Clearly determine who owns which data and assign roles to your team. For example, the team will have to determine which version of redundant customer information is correct and should be incorporated into the ERP system. Now is also a good time to appoint someone with overall responsibility for compliance with any regulations that affect your business. Under new regulations such as the CCPA and GDPR, a misstep can be costly.
Be selective with data. You may be tempted to hoard data, importing every piece from your old systems into the ERP system in the belief that it may be needed one day. But not all historical data needs to be immediately accessible or is useful. In fact, importing every historical data item can be counter-productive, slowing system performance and making it harder for users to find the information they really need.
If nobody on your team can give a compelling reason why they need certain data in the new system, you may not need to migrate it. Some businesses may elect to store historical data that they do not migrate in a separate system in the event it’s needed for historical analysis or other uses.
ERP Data Migration Tips
Testing early and often can ensure the success of an ERP data migration. Here are a few tips:
- Start testing of the new system with small amounts of your migrated data as early as possible, and gradually build up to more comprehensive testing over time.
- Start with representative subsets of customers and orders, and then gradually expand to cover all data, applications and uses.
- Go through your checklist and run tests in which users go through their entire day-to-day processes on the new system; this can expose problems that might otherwise be missed.