Migrating to a New Enterprise Resource Planning (ERP) Platform? Avoid these 5 Landmines

The evolution from on-prem, perpetual licensing to new deployment and licensing models has opened opportunity — and risk — for organizations migrating to new ERP platforms. But with a solid plan, you can ask the right questions and avoid problems before they cost you time and money.

For a quick review of the opportunities associated with moving to a new ERP platform, check out “How ERP Is Changing.”

Nearly any change effort involves risk, no matter how large or small the ultimate benefits, and  migrating to a new ERP platform is no different. So let’s take a look at five landmines in the ERP migration process and how you can avoid them.

1. Choosing the wrong ERP product. If you don’t ask the right questions, you can easily pick a product that is not a good fit for your business. Exercise due diligence by seeking answers to these questions:
   • With respect to features and functions, does this ERP product cover the core and ancillary processes of my business to the extent that I need it to, and can it do more later? In other words, will it scale to my business needs?
   • Is this the best product on the market for the unique needs of my particular industry?
   • Will it give me the right data, at the right time and in the right format to help me make better decisions?
   • Does it have the security and control features I need?
   • Does it provide the types of certifications and reports I need for auditing and compliance purposes?
   • Is it implemented in the cloud (i.e., software-as-a-service or SaaS) or on-premises? If in the cloud, am I comfortable with the customization options (or lack thereof), with the compliance options provided by the vendor, and with cloud security risks? Are upgrades automatic and rolling, or do they involve downtime and extra expense? If on premises, do I have the internal resources to maintain, customize and secure the system?
   • Does it fit my budget? Are licensing or purchase terms amenable? Is there a way to phase in implementation without cutting corners or handicapping the effectiveness of the system?There are many other important questions to ask — and a third-party advisor can help you here — but the bottom line is that you must avoid the temptation to just jump on the brand-name bandwagon; take the time to find the right fit for your organization.
2. Underestimating the challenge of data migration. Everyone underestimates the difficulty of migrating data—I see this in every single implementation, without fail. The common perception is that it is a simple “lift and shift”: you just copy your data from one place and import it into the new system, and voila!  Not so.  First, the mapping can be completely different from one ERP to another. Data enrichment, which entails refiguring and enhancing data so that it “fits” in new system, is a time-consuming step. Another complicating factor is bad data or missing data, which is a problem because, as they say, “garbage in, garbage out”; therefore, we often spend a good deal of time in the migration phase performing data cleansing. You can avoid this data migration landmine by examining the quality and state of your existing data and the data requirements of the new system before estimating the timetable for your migration. If all else fails, a good rule of thumb is to double the time you think it will take.
3. “Importing” bad processes. You should never change ERPs to fix a process, because a bad process will likely contaminate the new system. If your process is broken, your process needs attention as much as your ERP.  Re-engineer your process, then find the right software.
4. Dictating change from the top without buy-in and inclusion. The change management aspects of an ERP migration are often the first sacrificed, but they are the most critical. Top-down cultures present the biggest challenge, because such a culture is not inclusive and is apt to dictate change without gathering the insights and value that users can provide to the process.An oft-used excuse is “we don’t want to take our people away from their revenue-generating tasks to involve them in a bunch of meetings.” The fact is, trying to implement an ERP migration without soliciting the contributions of the ultimate end-users is a recipe for disaster. Planning, training and adoption will be slower if people aren’t kept informed and invited to participate in the process. To achieve the ROI you desire, commit to involving users and securing buy-in. Start by sharing the reasons for the decision, and communicate early and continuously throughout the migration process.
5. Shortchanging testing and training. As the ERP migration process proceeds and you begin to see light at the end of the tunnel, a common mistake is shortchanging the testing and training phases in a sprint to the finish. It’s particularly tempting to do this when you inevitably encounter resistance from those who are integral to testing or need to be trained. Insufficient testing and training can cause innumerable problems during implementation, ranging from mere hassles and frustrations to serious errors and liabilities, all of which will delay implementation, dampen uptake, and delay ROI. Stick to the plan: do solid testing using a plan developed in conjunction with end users, and take the time to train all users and key stakeholders.

The ROI of a well-chosen and well-planned ERP migration is substantial if you can avoid the landmines that on the surface may seem to be insignificant but are, in fact, quite capable of destruction. So, watch your step, and remember the adage “Anything worth doing is worth doing right.”

Authored by Lynne Drea