A Guide to ERP Data Migration: Challenges and Best Practices

Across industries worldwide, businesses are turning to ERP to automate repetitive tasks, enjoy easy scalability, stay flexible, and derive insights using a single source of truth. According to Statista, Enterprise Resource Planning (ERP) software market revenue will reach USD 53.15 billion this year.

If your organization implements an ERP system, you’ll find that data migration is one of the most critical components of this process. ERP systems rely on a centralized database that ensures everyone in your organization works with the same information. Your legacy systems can’t guarantee this consistency, which is where the ERP migration process comes in.

Here’s an in-depth look at the process to understand what to expect and how to proceed.

What is Data Migration in ERP? 

Data migration in ERP implementation involves moving data from its sources into the ERP system’s database. This data is highly diverse — containing financial records, customer information, inventory details, supplier details, employee records, and various business information.

ERP systems are comprehensive, all-in-one systems built to integrate various organizational functions. These functions include human resources, finance, supply chain, and customer relationship management (CRM). All these functions are unified under a singular, cohesive system to deliver real-time access, visibility, and control over business operations.

Data must be moved to the ERP system accurately to be effectively used. This is why it’s so important to have a well-thought-out ERP data migration plan and execute it meticulously.

At its core, ERP data migration is an Extract, Transform, Load (ETL) process with the following phases:

• Extraction: In the first step, a thorough extraction process captures all the relevant data from software applications and databases to spreadsheets and other systems.

• Transformation: Following extraction, all the captured data must be transformed to ensure compatibility with the new ERP system. This step involves cleaning, reformatting, restructuring, and converting the data to match the ERP database’s specifications. Concurrently, any data issues, errors, and inconsistencies must also be identified and resolved at this stage. 

• Loading:The last phase of the process involves loading the transformed data into the ERP system. This is the most important step, and teams must do it correctly to mitigate the risk of data loss or corruption.

Reasons to Migrate Your Data in ERP Implementation 

Data migration in ERP implementation empowers your organization to make the most of the new system, but other factors also necessitate it, such as:

1. Consolidation of Systems 

The longer your organization spends in business, the likelier it is to have its data accumulated in multiple databases and disparate systems, each related to a different department. Data silos arise quite naturally in the absence of centralized data storage. These silos keep each department’s data restricted to everyone but its personnel, making it challenging to obtain a holistic overview of your business operations while increasing fragmentation and inconsistency.

Migrating your data to an ERP system lets you consolidate these systems into a single platform. This improves data access and increases consistency.

2. Improved Data Accuracy and Integrity 

Legacy systems often contain inaccurate, outdated, or inconsistent data, resulting from errors associated with manual data entry, glitches in the system, or changing business processes. With data validation and quality measures built into the ERP migration process, you can clean and validate your data to make it clean, consistent, and error-free.

When you filter out low-quality data, you can rest assured that your new ERP system only has accurate and reliable data, improving the decision-making and reporting processes.

3. Enhanced Business Processes 

An ERP system helps automate business processes that you may have otherwise considered inefficient or error-prone. For instance, an ERP system can automate inventory management, order processing, and financial reporting. This decreases the time and effort required to perform these tasks and minimizes the errors from doing them manually. Following data migration, you can leverage your ERP system to streamline such processes and lower operational costs.

4. Compliance and Reporting 

Data management and processing are subject to rigorous industry standards and regulatory requirements. In particular, there are strict standards for record-keeping, financial reporting, and data privacy.

While such compliance is complex to manage when using legacy systems, it’s much easier with an ERP system. When migrating your data to an ERP database, you can ensure that your data management practices comply with all applicable regulations, safeguarding against potential legal issues, fines and penalties, or reputational damage.  

5. Future-Proofing Your Business 

Evolving technology and dynamic industry circumstances can increase the demands on your business. Legacy systems can make it difficult — if not impossible — to innovate rapidly and keep up with technological innovations. Despite increased maintenance costs, you’ll find it difficult to maintain your competitive edge and do so efficiently.

Migrating to a modern ERP system lets your business scale quickly and prepares it to embrace growth and technological advancement. In future-proofing your business, you’ll make it easier for your systems to retain their relevance and easily support new business models and methodologies.

Common Challenges in ERP Data Migration 

There are clear benefits to ERP data migration, but your ERP data migration checklist also needs to account for specific challenges. These are five of the most common challenges:

1. Data Quality Issues 

Legacy systems typically contain data that are outdated, incomplete, or inconsistent. These data quality issues can disrupt migration, leading to delays or errors. If left unchecked, they can also create reliability and usability concerns post-migration.

2. Complex Data Structures 

Your legacy systems will likely have non-standard or complex data structures that may not align with your new ERP system and its requirements. This challenge makes data mapping and transformation more difficult, increasing the risk of misinterpretation or loss.

3. Data Volumes 

Massive data volumes can overburden the migration process, resulting in a higher risk of delays, performance issues, or prolonged downtime. This situation also makes migration tougher to manage.

4. Integration with Other Systems 

Integrating your new ERP system with existing software, such as Customer Relationship Management (CRM) solutions or e-commerce tools, can be complicated. These integrations must be managed carefully, as any lapses can result in data discrepancies.

5. Downtime and Disruption 

Data migration generally requires system downtime, affecting productivity and disrupting business operations.

ERP Data Migration Best Practices 

To ensure a successful ERP data migration, follow these six best practices to minimize risks and maximize benefits:

1. Start with a Clear Plan: Define your data migration project’s scope, roles and responsibilities, and timeline.
2. Involve Key Stakeholders: Include stakeholders from different areas early in the process to address all business needs.
3. Clean and Validate Data: Remove duplicates, correct errors, and ensure data consistency before migration.
4. Test Extensively: Run multiple tests, including a pilot migration, to identify potential issues before the entire migration.
5. Document the Process: Keep detailed documentation for future reference and training purposes.
6. Post-Migration Support: Provide continuous support to fix any issues after the migration.

Data Migration Tools and How They Help

To overcome these challenges, organizations can leverage various data migration tools designed to simplify and automate the migration process. These tools offer several benefits:

Data Mapping and Transformation: Data migration tools can automatically match data fields from the old system to the new ERP system. This ensures that the data is correctly transformed into the needed format, lowering the chance of mistakes and speeding up the transfer process. For instance, if your old system uses different data types or structures than the new ERP system, the tool can automatically change the data to fit the new requirements, reducing the need for manual adjustments.

Data Cleansing: Many migration tools include features for cleaning up the data. This helps to find and fix errors, duplicates, and inconsistencies before moving the data. The cleaned-up data is better quality and lowers the chance of problems in the new ERP system. For example, the tool might highlight if there are duplicate customer records, missing fields, or data that doesn’t follow the required format. This allows you to fix these problems before they cause issues in the new system.

Automation: Data migration tools with automation features can make the migration process faster and easier. Automated processes handle large amounts of data quickly and accurately, reducing the chance of mistakes. For instance, the tool can extract, transform, and load data without manual intervention, freeing your team to focus on other essential tasks. Alternatively, it can schedule data migration tasks so that they don’t disrupt critical business operations.

Data Validation and Testing: Before you finish moving the data, use data migration tools to check the data to ensure it was transferred correctly and there are no mistakes. These tools let you do tests to find problems before they happen. For example, you can test the whole process to ensure the data is mapped, transformed, and correctly loaded before it goes live.

Scalability: Data migration tools are made to handle migrations of all sizes. They can scale to meet your organization’s needs, whether you’re migrating a few thousand records or millions of data points. For instance, if your organization plans to expand or acquire other companies, the tool can easily handle additional data migration projects, ensuring that your systems stay up-to-date and integrated.

Integration Capabilities: Many data migration tools integrate with popular ERP systems and other business applications. This streamlines the data migration process and allows your new ERP system to work easily with your existing systems. For example, if your organization uses a CRM system, the tool can automatically sync data between the CRM and the ERP. This ensures your customer information is consistent and up-to-date across all systems.

Final Thoughts

Migrating ERP data is a critical aspect of implementing a new ERP system. By thoroughly understanding the process, preparing for future challenges, and sticking to best practices, you can enjoy a seamless transition that positions your organization for success.

Astera offers more than a no-code platform and an intuitive interface to simplify ERP data migration. It helps you automate and complete your data migration project in days instead of weeks or months. It automates data model creation and leverages these data models for accelerated migration — while maintaining data integrity.

Learn more about the tool and how it can help in your ERP data migration use case by contacting our team today.