ERP Data Migration: Strategy, Challenges & Best Practices

Have you thought about how migrating the right data can streamline decision-making processes? Imagine having all your essential business data scattered across different systems—it would be chaotic, right?

That’s where ERP data migration steps in to streamline the process. However, nearly 83% of companies face data migration challenges during ERP implementation.

Proper planning can help avoid these hurdles and ensure a smooth transition. Let’s dive into why data migration is essential and how to craft a robust strategy for your ERP implementation.

Pro-tip

Before migrating, conduct a thorough data audit. This will help you identify incomplete, redundant, or outdated data that shouldn't make it into your new ERP system. Cleaning up this data can reduce errors and save time.

What Is Data Migration in ERP?

Data migration is the process of transferring data from one system to another, typically during the implementation of new software or hardware.

Companies practice this ERP migration method to introduce a new location or system for data.

Some departments, such as accounting or human resources, used standalone applications before adopting ERP, and other groups relied on spreadsheets for general-purpose purposes.

Before importing data into a database, companies should examine, extract, cleanse, and alter each application’s data to ensure a successful migration.

Why Is Data Migration Important for an ERP Implementation?

Data migration in ERP is a critical component for several reasons, because it ensures that your historical and live transactional data integrates smoothly into the new system.  Let us learn more about why data migration is important for an ERP implementation.

1. Centralized Information: An ERP system relies on a centralized database that provides consistent information across departments. Migrating accurate and relevant data ensures that all users have access to the same information.
2. Operational Efficiency: Properly migrated data allows for streamlined operations and improved decision-making processes. It enables organizations to leverage real-time insights and analytics.
3. Regulatory Compliance: Many industries are subject to regulations regarding data handling and storage. A successful migration ensures compliance with these regulations by maintaining accurate records.
4. Cost Savings: By migrating only necessary and high-quality data, organizations can reduce storage costs and improve system performance.

8 Steps to Build an ERP Data Migration Strategy and Plan

An ERP data migration strategy encompasses several key elements that can help an organization successfully migrate its data to its ERP system. 

It’s important to avoid mere data movement, which could result in chaos, emphasizing the need for an ELT tool to streamline this process. Here’s how it should be done to make an ERP data migration strategy successful and rewarding.

1. Define Objectives and Scope

The first step is to clearly define the goals of your data migration. For that, you must be sure about what you want to achieve. Your business must answer the following questions:

• What data needs to be migrated?
• Will the migration occur in phases or all at once?

Understanding the scope of your data migration will help create a realistic plan, prevent scope creep, and avoid unnecessary costs.

2. Set Up a Migration Team

Form a data migration team to decide what information needs to be transmitted and how to clean it up. 

As part of your overall ERP implementation team, the data migration group usually includes representatives from various business groups who can provide insights into how they use data.

This team should include

• IT staff
• Project managers
• Data analysts
• Representatives from key business functions

3. Assess and Inventory Data

Before importing the data into the ERP system, check each source system’s data for duplications and inconsistencies and figure out how to fix them.

In order for automated tools to import the data, mapping the ERP data to the database schema is also necessary during this step.

4. Develop Mapping and Rules

Data mapping involves identifying how data from the old system will fit into the new ERP structure. This step ensures that data is transferred correctly and consistently.

Set up rules for data transformation if required, such as converting currencies, merging duplicate records, or applying new data formats.

5. Select Migration Tools

Choosing the right data migration tools can streamline the process and reduce human error. Consider these key factors before choosing a migration tool:

• Data Volume
• Complexity
• Data integrity
• Automation
• Customization
• Data Security
• Scalability
• Vendor Support
• Cost
• Testing Features

There are various software tools designed specifically for ERP data migration, each offering different features like data cleansing, mapping, and automation. Choose tools that fit your organization’s needs.

6. Create a Migration Timeline

Establish a detailed timeline that outlines when each phase of the migration will take place. This should include preparation, data extraction, testing, and final cutover dates. Having a clear timeline helps manage expectations and ensures all teams are aligned.

7. Establish Governance Structure

Data governance is essential for maintaining data quality during migration. Define who is responsible for data accuracy, security, and integrity throughout the migration process. This governance structure ensures accountability and mitigates the risks of data errors.

8. Plan Testing and Support

Testing is critical at every stage of migration. Create a ERP testing plan that includes validating data accuracy, consistency, and completeness in the new system. Additionally, ensure post-migration support is in place to address any unforeseen issues after going live.

ERP Data Migration: 5 Best Practices

The following are five ERP data migration best practices that can help organizations avoid pitfalls and ensure a smooth ERP data migration project:

1. Plan Migration Strategy Early

Planning your migration strategy early is crucial for a smooth ERP implementation. Early planning helps identify potential risks, allocate resources effectively, and set clear timelines.

It allows time to address data quality issues and align stakeholders, ensuring all steps are organized before the actual migration process begins.

2. Ensure Data Quality First

Ensuring data quality is the foundation of a successful ERP data migration. Redundant data, such as duplicates, incomplete records, or outdated information, can lead to significant operational issues post-migration.

Before transferring data to the new ERP system, conduct a comprehensive data audit to identify and clean up inaccuracies, redundant entries, and inconsistencies. This process involves standardizing formats, verifying accuracy, and removing obsolete data. By ensuring that only high-quality, relevant data is migrated, you reduce the chances of errors and system failures.

3. Use Automation Tools Wisely

Using automation tools wisely during ERP data migration can greatly improve efficiency, but it requires careful planning. Automation helps streamline repetitive tasks like data extraction, transformation, and loading.

However, it’s important to ensure that automation rules are correctly defined to avoid transferring incorrect or incomplete data. Choose automation tools that offer flexibility for customization, allowing you to adjust for specific business requirements.

4. Test Thoroughly Throughout the Process

Thorough testing during every phase of ERP data migration is crucial for success. By testing early and often, you can catch potential issues like mismatched data or incomplete transfers before they cause bigger problems.

Start with small tests and gradually expand to validate how well everything functions in the new system. This way, you can fix any errors along the way and avoid last-minute surprises during go-live. Regular testing ensures that your data is properly mapped, complete, and ready to perform in the new ERP system.

5. Engage Stakeholders Continuously

Engaging stakeholders continuously throughout the ERP data migration process is vital to ensure alignment and smooth transitions. Stakeholders from different departments, such as IT, finance, and operations, provide valuable insights on specific data needs and business requirements.

Their involvement helps identify potential issues early and ensures that the migration meets the organization’s broader goals. 

ERP Data Migration Checklist

Apart from best practices and steps, these ERP migration checklists should also be included in the ERP migration project strategy to guarantee a careful data migration: 

• Set Clear Objectives: Define the scope and goals of the migration.
• Assemble the Team: Establish a cross-functional migration team.
• Audit Existing Data: Inventory and assess current data.
• Map source-to-target fields: Create data mapping between old and new systems.
• Select Migration Tools: Choose appropriate software for automation and data cleansing.
• Develop a Timeline: Plan a migration schedule with clear milestones.
• Create Governance Policies: Define accountability and data quality standards.
• Plan Testing: Include frequent testing phases throughout the migration process.
• Post-Migration Support: Ensure a plan is in place for post-migration troubleshooting.

What Are The ERP Data Migration Challenges?

An ERP system requires data migration, which can be a challenging process. ERP data migration presents a range of challenges, including:

1. Data Quality Issues

Data quality issues are a major concern in ERP data migration, as they can lead to significant problems like system errors and inaccurate reporting. 

Issues such as outdated, incomplete, or duplicate data can severely impact the effectiveness of the new ERP system.

Solution

• Start by thoroughly auditing your existing data to identify inaccuracies, duplicates, and missing information.
• Implement data cleansing processes to correct errors and remove redundant records.
• Apply validation rules during migration to ensure data accuracy and consistency in the new system.
• Standardize data formats and structures to align with the new ERP requirements.

2. Complex Data Mapping

Complex data mapping arises when integrating data from legacy systems into a new ERP system, often due to differences in data structures, formats, and schemas. 

Legacy systems may use various formats, field names, and data types that do not align directly with the new ERP’s requirements. This misalignment complicates the process of accurately transferring and transforming data.

Solution

• Develop a Detailed Data Mapping Plan.
• Utilize Advanced Data Mapping Tools.
• Perform pilot tests to validate the accuracy of the data mappings.
• Involve data experts who have experience with complex data mappings.
• Clearly document all data mapping rules and procedures.

3. Cost of Data Migration

You can spend a substantial part of the budget for implementing the ERP on cleaning, restructuring, and extracting data. 

Data migration can add 30% to the overall cost of the new system, even if it is a simple process, like moving data from an old ERP to a new one.

Solution

• Create a comprehensive budget that includes all potential costs.
• Select cost-effective tools.
• Assign tasks to skilled personnel and minimize the use of external consultants.
• Consider migrating data in phases rather than all at once.

4. Regulatory Issues

Different industries have unique regulatory requirements for data retention, privacy, and security.

Failure to comply with these regulations during migration can result in legal and financial repercussions. Involving legal and compliance teams from the start is essential.

Solution

• Thoroughly research and understand the data protection and privacy regulations.
• Engage with legal and compliance professionals who can guide adhering to regulatory requirements.
• Implement strong encryption methods to protect data.
• Maintain detailed documentation of all compliance-related measures and decisions made throughout the migration process.
• Perform regular audits.

5. Inadequate Testing and Validation

Skipping or skimping on testing is a significant risk in data migration. Without proper validation, data may be incomplete, incorrectly mapped, or corrupted.

Ensuring comprehensive testing throughout the migration process reduces these risks.

Solutions

• Begin testing early in the migration process and conduct tests at each stage.
• Employ automated testing tools to streamline the testing process.
• Engage end-users in the testing process.
• Keep detailed records of testing results and any issues encountered.

Final Thoughts

Data is an essential component of any business, and when moving to a new business system, it should be a major consideration. Losing data or importing it into a new system inaccurately can result in severe outcomes. In addition to becoming non-compliant with various data regulations, your business’s day-to-day operations and reporting will become compromised.

ERP data migration and cleansing can be significantly costly to an already expensive ERP project, but it will pay off almost immediately. After successfully migrating your data, you can easily get through the identification of excess inventory and reduced equipment downtime and enjoy improved data insights.

Dharmik Joshi

About the author

Dharmik Joshi is an ardent learner of business management and channels his passion for articulating ideas into writing. With a wealth of experience spanning 2 years in content creation, he remains committed to staying abreast of industry trends and evolving content strategies. He thrives on the dynamic nature of digital marketing, constantly looking for fresh approaches to captivate audiences and deliver measurable results.