Data migration is a vital—but sometimes challenging—step in implementing an ERP solution. 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, a business 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 like spreadsheets. To pull off 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.

Key Takeaways

  • 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 making sure 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. A 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 delays to your go-live date.

Data Migration Challenges

ERP data migration can present a variety of challenges. Let’s delve into some of the most common.

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% to 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 make sure 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 General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), requires that organizations retain the ability to delete all of a consumer’s personal data on request.

4 Steps to Build a Successful ERP Data Migration Strategy and Plan

To shepherd the organization through the sometimes complex process of moving 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 units 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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 don’t 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 safeguard the success of an ERP data migration. Here are a few tips:

  1. Start testing the new system with small amounts of your migrated data as early as possible, and gradually build up to more comprehensive testing over time.
  2. Start with representative subsets of customers and orders, and then gradually expand to cover all data, applications, and uses.
  3. 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.

How Long Should an ERP Data Migration Take?

ERP data migration timelines vary considerably. Small to midsize businesses with straightforward data structures might be able to complete their migration in a few months, whereas larger enterprises can often expect to spend 12 months or longer on the process. Companies with massive data volumes, multiple legacy systems, or intricate business processes should plan to set aside as long as two to three years.

It’s important to note that the data migration timeline accounts for more than the actual migration execution, during which data is extracted, transformed, and loaded onto the new system. For instance, companies dealing with poor data quality may find that fixing inconsistencies, removing duplicates, and standardizing formats consumes a significant portion of their migration timeline. In addition to this cleansing and preparation phase, businesses should consider the time it takes for:

  • Discovery and assessment: Identifying what data exists, where it lives, and which datasets are critical to migrate.
  • Data profiling: Analyzing data quality to understand the scope of cleansing work required.
  • Testing and validation: Verifying data accuracy and completeness.

Who Should Be Involved in an ERP Data Migration?

Successful ERP data migration requires a cross-functional team with clearly defined roles and responsibilities. Here’s an overview from the top down:

  • An executive sponsor secures buy-in from leadership, resolves issues as they arise, and makes final decisions about budget and resources. Under them is the project manager, who oversees schedule, budget, and scope while coordinating all migration steps and serving as the liaison between stakeholders.
  • On the ground is the technical and operational team, which typically includes an IT manager or systems administrator who handles data extraction, system compatibility, and integration. Data migration specialists map, cleanse, and prepare data for transfer.
  • On the sidelines are business analysts who clarify the business case for migration and assess its impact on processes. At the same time, leads from finance, sales, operations, HR, and other key areas work to determine which data needs to be transferred. These cross-functional leads also provide insights into how their departments use their data. Change management leads step in to coach all employees, from C-suite to general staff, on how to prepare for and adopt the new ERP system.
  • Quality assurance or test leads run final inspections to verify data integrity and alignment with the new system’s requirements.
  • It’s also common for organizations to work closely with their ERP vendor or an independent consultant for technical expertise and guidance throughout the process.

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ERP data migration is complex, time-intensive work that requires both careful planning and the right team in place. But when done well, it sets the foundation for a successful ERP implementation that improves business operations. By starting early, assembling a cross-functional team with clearly defined roles, and following a structured approach to cleansing and transferring data, a business can minimize disruptions and position itself to take full advantage of its new system’s capabilities from day one.

ERP Data Migration FAQs

What are the seven Rs of data migration?

The seven Rs refer to cloud migration strategies, not data migration processes specifically. The framework includes:

  • Rehost: Lifting and shifting applications to the cloud without modifications.
  • Relocate: Moving infrastructure to the cloud with minimal changes.
  • Replatform: Making minor optimizations during migration.
  • Refactor: Re-architecting applications to leverage cloud-native features.
  • Repurchase: Switching to a different product or SaaS solution.
  • Retire: Decommissioning applications that are no longer needed.
  • Retain: Keeping certain applications on-premises or in their current state.

What’s included in the costs of an ERP data migration?

ERP data migration costs typically include data extraction, cleansing, and restructuring, as well as consulting and professional services from data migration specialists. Customization and integration with other systems, plus training and change management for employees, also factor in.

What are the consequences of a data migration failure?

Data migration failures can lead to inaccurate or duplicate data, delayed go-live dates, disrupted operations, and inflated costs. They can also damage regulatory compliance, undermine automation and analytics capabilities, and erode user trust in the new system.