Your company has finally made what you think is the hardest decision – to abandon your existing ERP solution and move to the most up-to-date, fancy, graphical, cloud-based system ever created. Congratulations! Because this is the hardest decision, everything should be much easier from here. At least it should be easier than the decision to switch.
You schedule the kickoff meeting with your IT company to discuss the “new” system and questions arise, as it does in most cases, around data. As a company that has been around for quite some time, you have accumulated a lot of data. It’s just like when you own your own house. You accumulate a lot of stuff. When you move from one house to another, the biggest question after selecting the new location is what are you going to take with you? Well, it is the same when switching ERP solutions. What data is important, and you can’t live without and what data is old and worthless, and you will never look at again?
The initial thought is – take it all. Why wouldn’t you want to take everything to your new house or your new software? Then, reality starts to sink in. Data doesn’t usually move seamlessly from one system to another. A program will need to be written to move the data. A program can be expensive and it might be complicated. If you are lucky and are moving to a new solution with your existing IT company, since they know both systems, it should be easier. If you are switching companies at the same time as switching software, the two companies will need to interact with each other so that they can learn to speak the same language. The old system may store a flag as a Y or N and the new system might store it as a 1 or 0. Just like a spoken language, it takes time to learn it and translate it.
Did I say it takes time? Time to learn it, time to write the program, and time to run the programs to move the data. And after the data is moved, it takes time to proof the data to ensure all the data and numbers moved correctly and accurately. Is my AR and AP aging still the same? Did my inventory move over with the same on hand quantity? Did my balance sheet and income statement accurately show the same balances? This is all very important before you can switch to a new system. Not only will it take time, but it will take money to pay for all these people to learn, program, run, and validate the data that is moved.
Now this story probably sounds expensive and gloomy, or even impossible to someone who has not gone through this operation before. It could be if you don’t hire the right software company to help manage and plan this move with surgical precision. It also could be if you try to bring over data that is not needed going forward.
My reason for writing this blog is to impress upon the reader that it is important to plan and decide up front what is really important. Will I still maintain access to my “old” ERP solution? Can I get the old details from it when needed? Can I get away with only have AR and AP open invoices in the new system? Do I need the historical transactions that make up my balance sheet and income statement or are opening balances enough? Do I need 20 years of historical sales or is 12 or 18 months enough? How long will it take me to build up enough historical data if I don’t bring anything over? Based on the size of the data, can I hire a temp to manually enter some of this data or do I need to have a programmer write a program to import the data?
These are important questions that you must decide upon early in process as the answers could not only be expensive in terms of dollars but in terms of time and possible delays in getting onto the new software as these routines are created. Just like moving into a new house, looking at your stuff and determining what is important is the most important step in the overall process.