Best Practices for ERP Data Migration

Data migration is a critical process during an enterprise resource planning (ERP) implementation that involves transferring data from legacy systems to the new ERP platform.

Its role is pivotal as it ensures that accurate, complete, and reliable data is available in the new ERP system, which is essential for seamless business operations.

“Data migration is a vital—but sometimes challenging—step in implementing an enterprise resource planning (ERP) system,” says Oracle NetSuite. “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.”

For IT leaders overseeing ERP implementations in companies with significant revenue, understanding best practices for data migration is vital to avoid potential pitfalls and ensure a successful deployment.

“Migrating data, systems, IT infrastructure, and applications is no easy feat. But, many companies, pressed to modernize and meet the current market demands of the digital transformation era, may feel the urge to rush through their migration process to keep up with their peers,” explains TechRepublic. “Major problems can emerge for organizations that do not have a clear step-by-step plan and overarching strategy in place before they start a data migration.”

Why an ERP Data Migration Strategy is Important

A data migration strategy is important because it minimizes cost, data loss, and downtime.

Poorly designed data migration strategies can lead to business disruption and/or suboptimal performance of the newly migrated system.

Some benefits of a data migration strategy include:

• Improved Data Security: The importance of Data Security has gained global attention in recent years and is essential for adhering to industry and governmental regulations.
• Cost Savings: Effective data migration can reduce media and storage costs, as well as lead to additional benefit gains when moving to the new ERP. Data that is cleaned properly during migration will allow process efficiencies.
• Enhanced Disaster Recovery: Data migration can enable backup and disaster recovery features.
• Improved Operational Efficiency:  Cleaning data as part of your data migration process can simplify data management and improve data accuracy, allowing for streamlined processes and reduced redundancies.
• Improved Data Quality: Data quality is the end goal of a successful data migration. Many of these listed benefits are not possible without quality data.
• Improved Accessibility: Data migration can improve speed of data access and reporting, leading to faster and more agile business decisions.
• Scalability: Successful data migration can help to enable a company's future growth by creating a clean, standardized, and secure environment.
• Improved Compliance: Data migration is an essential step in enduring compliance and remaining flexible to constantly changing regulations.
• Better Analytics: A core step in successful data migration is ensuring data is ready to feed into the new reporting and analytics structure. Many companies are implementing new ERP solutions simply for the ability to analyze data more quickly and accurately.

“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 are critical because so many parts of the business—customer satisfaction, decision-making, supply chain, and partner relationships—will rely on the database,” says Oracle Netsuite.

Understanding ERP Implementation and Data Migration

An ERP implementation is the process of deploying an integrated software system that streamlines and automates various business functions across an organization.

This includes modules like finance, human resources, inventory management, sales, and more.

Data migration, in technical terms, refers to the process of extracting, transforming, and loading (ETL) data from the existing systems into the new ERP platform.

“ETL provides the foundation for data analytics and machine learning work streams. Through a series of business rules, ETL cleanses and organizes data in a way which addresses specific business intelligence needs, like monthly reporting, but it can also tackle more advanced analytics, which can improve back-end processes or end-user experiences,” explains IBM.

Data migration involves mapping data fields, ensuring data integrity, and handling various data formats.

Complexity arises due to factors such as:

• Data volume
• Data quality issues
• Disparate data sources
• Unique data structures
• Need for minimal business disruption during migration

So proper data migration is crucial for several reasons:  it ensures that accurate and reliable data is available for business operations in the new ERP system; it facilitates smooth continuity of operations during the transition, minimizing disruptions and potential revenue loss; and a well-executed data migration ensures compliance with industry regulations and data privacy standards.

Consequences of an Improper Data Migration

The pitfalls of improper data migration include data loss, duplication, incorrect data mapping, data corruption, and data incompatibility with the new ERP system.

This can happen more often than companies choose to admit as Gartner estimates that 83 percent of data migration projects fail, and more than 50 percent of migrations exceed their budget.

The consequences of a failed data migration can include:

• Budget and Timeline: Companies may spend more than expected and take longer to get to the new environment.
• Business-critical Assets: Poor data handling can result in the loss of business-critical assets.
• Compliance Fines: Any data integrity compromise that occurs during migration can result in hefty compliance fines. Additionally, any break or interruption to an existing data security protocol that is in place for insurance purposes could potentially be classified as insurance fraud.
• Reputational Harm: Compromised data integrity is a black eye on a business and can cause grievance with both vendors and customers.
• Downtime: Data issues identified after Go Live often need to be corrected, which can cause costly downtime.
• Lack of Trust: Downtime can contribute to organizational change management (OCM) issues and a lack of trust in the new solution.
• Resource Constraints: Migrations that are oversold as easy will struggle with resource constraints.
  

“One of the most important facts to remember in any data migration project is that there will be unforeseen issues arise, even with the most thorough planning,” Aradyme CEO James R. Spence told CXO magazine. “The difference between success and failure is how effectively your chosen approach can respond to these unknown issues.”

Try These 11 Best Practices for ERP Data Migration

To make your ERP data migration a success, try these 11 best practices:

• Thorough Data Assessment: Begin with a comprehensive analysis of the existing data, identifying the quality, completeness, and relevance of each data set. This helps in planning the migration strategy. It’s important to define clear migration goals and objectives, as well as determine the data that needs to be migrated including customer data, critical business information, and historical records.
• Data Cleansing and Preparation: Cleanse and standardize the data to ensure consistency and accuracy. Eliminate duplicate, outdated, and irrelevant records to improve data quality which is vital for a successful ERP implementation. Implement data validation procedures and data cleansing techniques to ensure the integrity and accuracy of the data to be migrated.
• Establish Data Mapping: You will need to determine the right data migration approach (direct migration, phased migration, or a parallel run). Create a clear data mapping between fields in the legacy system and the corresponding fields in the new ERP system. Data volume, resource availability, and system complexity are all factors at this stage. Establishing a thought-out data mapping plan will ensure accurate data transformation during migration.
• Define Approach For Data That is Not to be Migrated: At this point, do not forget to address what to do with the data that will not be migrated to the new ERP. Options for data not being migrated included: changing access to data in the old ERP system to “read-only” so new entries cannot be made; archiving data not to be migrated into spreadsheets for future reference; setting up a database to store the data not to be migrated which will allow for future access.
• Perform Test Migrations: Conduct trial migrations with a subset of data to identify and rectify any issues before the actual migration process. This aids in mitigating risks during the actual migration. These test scenarios, including end-to-end testing, can validate data integrity and functionality within the new ERP system. Data reconciliation exercises should be conducted to ensure consistency between the legacy ERP and the new system. It’s imperative to involve key stakeholders in the testing migration process to gain their feedback and address any issues that may arise.

• Data Validation and Verification: Once the data migration begins, implement validation checks to ensure data integrity. Verify the accuracy of migrated data against the source data for discrepancies. Data validation checks are critical during data migration because they can help prevent data loss and ensure a smooth transition to the new system. During the migration process, there is a risk that sensitive or confidential data may be exposed or lost. Data validation checks can identify potential errors and inconsistencies before they cause any major issues. Data validation checks can also minimize the risk of unplanned downtime, loss, or corruption of data.
• Establish Data Governance and Security Measures: Data access controls and robust security measures to protect sensitive information during data migration need to be implemented. Data governance is important for ensuring that data is consistent, trustworthy, and doesn't get misused. It's also critical for organizations that face new data privacy regulations and rely on data analytics to help optimize operations and drive business decision-making. Data governance policies can mitigate the risks associated with data mismanagement and possible security breaches. They also provide the ownership, accountability, process, planning, and performance management required by every organization, department, and individual that handles data.
• Data Backup and Contingency Plan: Prioritize data backup and establish a contingency plan to address any unforeseen challenges during the migration process. Backing up all data to be migrated helps protect against data loss during the migration process. Data backup and recovery also ensure that you can restore your data in case of any failures or errors during the migration. Data loss and corruption can occur due to hardware failure, human error, or other factors. To mitigate this risk, you should perform regular backups and verify data integrity during the migration process.
• Engage Data Migration Experts: Seek assistance from experienced data migration experts or consultants to leverage their expertise and ensure a smooth transition and make the ERP implementation more manageable. Consultants can help your company avoid costly mistakes, streamline the data migration process, and reduce risk. Utilizing this help can allow your company to focus on core operations while the data migration is performed efficiently and securely.

• Train and Educate End-Users: Provide comprehensive training to end-users to ensure they understand the new system and can effectively utilize the migrated data. This user training and support is crucial for a successful ERP implementation. End users need to understand the new ERP system, its functionalities, and how to navigate the migrated data. Education can include workshops, training materials, and ongoing support to address concerns and promote user adoption of the migrated data.

• Monitor and Optimize Data Performance: Your data migration strategy should not end after the data has been migrated but should include a phase where the data performance within the new ERP is monitored and optimized. Establish data performance metrics, monitor data quality, and address any data-related issues. Data processes and workflows should be reviewed and revised as needed to ensure they align with your business requirements. Monitor system performance and user feedback to identify areas for improvement.

ERP data migration is a complex yet essential process in successful ERP implementations. By embracing thorough planning, careful execution, and the expertise of professionals, organizations can maximize the benefits of their ERP investment while minimizing risks associated with data migration.

Successful data migration sets the foundation for optimized business processes, improved decision-making, and increased efficiency across the organization. We understand these critical steps and are here to help you navigate this process.