Data migration is a crucial step in implementing an enterprise resource planning (ERP) system, but it can also be a challenging one. At the core of every ERP system lies a shared database that empowers employees throughout the organization to rely on the same consistent set of information. However, when deploying ERP software, organizations must transfer data from older systems into this database.
The process of data migration can be both intricate and time-consuming. Careful planning is imperative to ensure that it is executed accurately and efficiently, as underestimating the effort required could cause delays in the entire ERP implementation. Moreover, the accuracy and completeness of the transferred data are paramount because many aspects of the business, including 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 various sources and formats into an enterprise resource planning (ERP) system’s database. It is an essential step in implementing an ERP system, as it allows an organization to have a single source of accurate and consistent information that can be accessed by employees across different departments.
Before the adoption of ERP, different departments within an organization may use their own specific systems or tools to support their functions. When implementing an ERP system, the data from these systems and tools must be migrated into a single, common structure in the ERP system’s database.
To ensure a successful data migration, businesses need to take a methodical approach that typically includes inspecting, extracting, cleansing, and transforming the data from each of these applications before importing it into the database. The accuracy and completeness of the transferred data is critical, as so many parts of the business rely on the database, including customer satisfaction, decision-making, supply chain, and partner relationships.
In order to achieve a successful implementation of an ERP system, businesses must address a number of data migration challenges. These include concerns around time, cost, data redundancy and integrity, stakeholder support, and potential regulatory compliance. In order to mitigate these challenges, it is critical to map out a clear data migration strategy and dedicate a team to analyzing, migrating, and validating the data. Best practices for ERP data migration include initiating the process early to avoid delays in deployment and taking the opportunity to eliminate outdated or irrelevant historical data. By following these guidelines, organizations can ensure that their ERP implementation is a success.
The Significance of Data Migration in ERP Implementation
Migrating data is a crucial process to guaranteeing the accuracy and completeness of data in a new ERP system, which numerous individuals in diverse sections of an organization will rely on for historical data. A well-planned data migration strategy can ensure that the ERP implementation is completed on schedule and within budget, while also allowing for the removal of obsolete and redundant data from older systems. Conversely, underestimating the importance of data migration can result in inaccuracies, duplicate data, and complications with the go-live date.
Challenges of ERP Data Migration
Migrating data for an ERP system can be a complex process, and various challenges can arise during the process. Here are some common challenges:
Data redundancy and integrity
Different departments may have varying data sets of the same information, such as customer or product data, with varying formats and categorization. If all the data is imported directly into the ERP database, it may result in duplicated or inaccurate data. To ensure data accuracy, each data set must be inspected, cleaned and restructured before import.
Data migration cost
The cost of extracting, cleaning and restructuring data can significantly impact the overall budget of an ERP implementation. According to a report from ERP Focus, data migration can add up to 10-15% of the total cost of the new system, even if the data is being transferred from an older ERP system.
Obtaining buy-in from top management is essential for successful ERP data migration. Various business units may have been using their own unique systems for their specific functions, and their staff may be accustomed to entering data in a particular manner. Hence, top management support is necessary to ensure a collaborative effort in creating a single, consistent set of data.
With the rise of region-specific and industry-specific regulations, organizations need to comply with them while transferring data. For instance, healthcare organizations need to follow HIPAA rules that mandate retaining certain documents for six years. Moreover, new regulations such as Europe’s GDPR and the California Consumer Protection Act require organizations to be able to delete a consumer’s personal data upon request.
4 Steps to Develop an Effective ERP Data Migration Strategy and Plan
To ensure a smooth transition of data to the ERP system, it is essential to develop a well-planned ERP data migration strategy that encompasses the following key steps:
Formulate a migration team
Create a group of people responsible for determining which data should be transferred and how to clean it up. This team is typically part of the overall ERP implementation team and includes representatives from various business groups who can provide insights into how data is used by their respective groups.
Analyze and map the data
Examine the data in each of the source systems to identify redundancies and inconsistencies. The data migration team needs to resolve these issues before importing the data into the ERP system. In this phase, it is also important to map the data to the structure of the ERP database so that automated tools can import the information.
Decide what data to migrate
The older systems may contain outdated information, such as customers who haven’t ordered in years, suppliers that have gone out of business, or data about obsolete products. The systems may also have historical data about old transactions, which may not be required in the new system. Therefore, it is important to decide what data needs to be migrated and what can be stored offline or in a separate system based on data retention policies.
Migrate, validate and test
The new ERP system may have tools that automate the process of importing data from systems. However, it may be necessary to rationalize the data and convert it into a form that the ERP system can recognize. Before going live, it is crucial to test the migrated data for every business group and ERP application.
Four Best Practices for Successful ERP Data Migration
Implementing an ERP system involves a lot of data migration work that should not be underestimated. 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
To avoid delaying the entire implementation, it’s important to start data migration early and allocate enough resources to make sure it doesn’t become a bottleneck. Create processes for extracting and cleansing data from source systems near the start of the implementation.
Think about broader business use of the data
Before starting the migration, analyze your existing data, think about how it will be used within the ERP system, map it to the structure of the ERP database, and set up rules for translating the data to the new structure during migration. Consider how the 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. Appoint someone with overall responsibility for compliance with any regulations that affect your business, such as CCPA and GDPR. Determine which version of redundant customer information is correct and should be incorporated into the ERP system.
Be selective with data
Not all historical data needs to be migrated into the new system. Importing every historical data item can slow down system performance and make it harder for users to find the information they 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.
Tips for Successful ERP Data Migration Testing
To ensure a successful ERP data migration, testing early and frequently is essential. Here are some tips:
Begin testing the new system with small amounts of migrated data as soon as possible, and gradually increase testing to cover more comprehensive scenarios over time.
Start with representative samples of customers and orders, and then gradually expand to include all data, applications, and use cases.
Perform thorough testing by going through your checklist and running tests in which users carry out their daily tasks on the new system. This can help identify any issues that might otherwise go unnoticed.