3 Critical Questions to Ask About Data Migration Before Implementing ERP Software

When it comes time to replace your current accounting or ERP software, you may not have data migration at the top of your list of considerations. After all, moving data from one system to another should be pretty simple and straight forward right?

Well, not exactly.

The reality is, there are a variety of factors that can make data migration a complex, time-consuming, and costly project that can have a significant impact on your overall ERP implementation costs.

At Equation Technologies, we’ve done hundreds of successful data migration projects ranging from really simple to painstakingly complex. That’s why we put together these 3 critical factors you should consider before choosing a new ERP system and implementation partner.


1. Is the Old System Compatible with the New?

New call-to-actionNot all data files are created equal. Each accounting or ERP system has its own unique structure. So when it comes to the more technical aspects of data migration, you should consider important factors like whether the old system is running on a proprietary database that the new system won’t understand - or if the data is even exportable in the first place.

In addition when it comes to mapping records like vendors or customers, there may be limitations that require special consideration. For example let’s say the customer ID field in the old software allows for 30 characters but the new system only allows 20 characters. That means any vendors over 20 characters won’t be accepted in the new system which, in turn, requires additional time and manual intervention in order to handle those exceptions.

Older or simpler databases (like QuickBooks) sometimes rely on proprietary formats and restrictions that don’t mesh well with more modern ERP systems (like Sage 300).

Even if you can transfer your old data easily, your new system may not know how or what to do with it. Perhaps most importantly, you run the risk of handicapping your new system to the restrictions of your old software right out of the gate.

2. How Much Data History is Practical and Necessary?

The question of how much data is practical and necessary is more of an operational consideration than a technical one.  Understanding that technical challenges (from #1 above) can limit what can and can’t be migrated in an automated way, you should consider the cost-benefit of spending time and money “fixing” and mapping the data manually before it can be migrated ... or whether it’s even necessary in the first place.

“Data History” means a lot of things to a lot of people. But in our experience after asking our clients some very pointed questions, we discover that most companies don’t need ALL of their data.

For example, is it necessary to migrate your entire data history – all the data you’ve acquired in the course of doing business?  The answer in many cases is no.

We’ve found that most companies need only the most recent few years. Anything prior to that can remain in the old system which still runs on a computer somewhere in the office and is easy to access when needed (which realistically is rare and serves as more of a security blanket than anything).

In just about every case, migrating critical “master” records like vendors, customers, and opening balances are “no-brainers.” But migrating records like detailed checks, bank reconciliations, inventory margins, and closed accounts introduce some trickier challenges that can become very costly.

The more data you migrate, the more challenges you’ll uncover, and the higher your implementation costs.

Furthermore – and this is a potential deal-breaker for some clients – the more data you migrate, the more testing that’s required, and the longer your implementation is going to be. By itself, data migration can stretch the “go live” date from weeks to months and some businesses can’t afford to wait that long.

3. Why Do You Want to Migrate Data?

Part of answering the question in #2 above (how much to migrate) is asking yourself WHY you want to migrate.  Sure, most businesses want the security blanket of holding on to all their accumulated data. But migrating everything is rarely cost-effective and seldom even necessary.

One of the most important questions we ask our clients before developing a data migration plan is this ... what data is most critical to running your business effectively?

In other words if your house was on fire, what are the most important things you’d grab before running out the door?

Answering that question often comes down to reporting and decision-making. Determining which reports are the most important to running your business and who needs access to them (which roles or departments) helps you figure out what and how much historical data is necessary to migrate.

You’re implementing new ERP software for a reason. And as we mentioned earlier, different accounting or costing methods and other limitations in the old system can seriously hamper reporting flexibility in your new system.

Understanding why you need historical data, determining what’s absolutely critical to running your business, and leaving the rest in the past can go a long way in providing your new system the flexibility to deliver the benefits it was designed for.

Data Migration Doesn’t Happen Auto-Magically

While most people assume that moving data from one accounting system to another should be pretty simple, the reality is there are a wide range of factors that can make data migration a real challenge.  Many businesses don’t realize that the more data you want to migrate, the more complex – and expensive – the process becomes.

That’s why we think it’s a conversation you should be having before you choose a new ERP system. Too many companies think that it’s “just going to work auto-magically”, only to find out that their historical data either can’t be migrated because of technical issues or the software consultant they’re working with didn’t include the complexity of data migration in their project estimate (“Oh, you want to bring over historical data? That’s going to be another $X,XXX dollars”).

To be blunt, it’s not a do-it-yourself project for the vast majority of businesses. It’s best to seek the guidance of data migration experts from the start rather than the more costly fix of an ERP Project Recovery after things have gone haywire.

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