ERP Implementation: 5 data migration tips

July 29, 2010

When choosing a new ERP or accounting software system, consider how you will migrate the data in your existing system into the new system. You don’t want to have to re-enter all those products and customers, and you definitely don’t want to lose things like sales history. You’ll also usually want a way to transfer opening balances at date of go-live – unpaid payables, uncollected receivables, bank and general ledger balances to name a few.

Virtually every vendor will tell that you data migration is no problem. And usually that’s true – but frequently only for the vendor. For you, it can be a big problem. Here are 5 tips for planning data migration:

1. Evaluate and understand your existing data

Think about all the types of data you currently have, that you’d need or want in the new system. Consider reports and on-screen inquiries, and both current and historical data. And review the quality of your existing data: do you have a lot of duplicated customer records? Are you satisfied with your existing product codes? How about your chart of accounts? If you want to change anything, now’s the time to do so.

2. Determine what data needs to be electronically migrated

At a minimum, think about customers, vendors, products, bills of materials, sales history, financial history, and of course current transactions – these include unpaid / opening balances and open sales and purchase orders. What about quotes? Leads?

Think also about some of the subsidiary data – for example, an inventory management system may also track things like serail numbers, or lots and their original and remainingh quantities if you’re a food distributor. You don’t want to have to manually re-build that data, do you?

In each case, look at quality and quantity. If you have very poor quality data, you may want to manually clean it before electronically transferring it. And if a particular file is small (example – you only have 25 vendors), then it may make more sense to simply manually key these into the new system instead.

3. Understand when data needs to be migrated

Timing is important. Customers and products for example, can be migrated any time ahead of go-live, with any new additions manually updated (you need a good process for tracking this). Or they could be migrated at go-live (assuming you do a test migration ahead of time to validate). Current / open transactions and balances usually need to be migrated at point of go-live, and so can be the bottleneck (there are ways around this). But for historical data such as sales history, timing is much more flexible – you could import sales history any time after you’re already live on your new system.

4. Clean up your data

Plan on taking responsibility for cleaning up bad or poor data, before turning the data over to the vendor (or the vendor’s import utility). A common example when migrating from certain older or lower-end accounting systems is with customer addresses – where the city and zip / postal code are not stored in a consistent place – but the new system maintains separate fields for these and uses them for reporting, sales taxes, etc. In such a  case, extracting the data into a spreadsheet, and moving those elements to their own columns, is a great idea. Usually the vendor will be able to supply you with a template that can then be imported into the new system.

5. Clearly define who is responsible for which activities

 Some vendors will give you a fixed cost for data migration – but please read the “fine print” on what that excludes. Similarly, some will tell you that you can use their import utility to import your old data without intervention from them. This may be technically true, but you likely do not have the depth of knowledge of their system to understand the implications of the choices you make using the import utility – sadly by the time you find out the consequences of a poor choice, it’s too late.

Others will charge you an hourly rate for data – in this case be very careful to get details of what they propose doing, an agreed upon maximum number of hours, and a process to limit the costs and review progress in advance of any scope creep.

It’s usually best to keep the vendor responsible for providing guidance on data types and formats, and for the actual import process, while taking ownership yourself of the quality of the data. Either dump your data into a spreadsheet yourself, or get the vendor’s assistance in so doing, and use the spreadsheets to review and clean the data.


Is eCommerce for Wholesalers and Distributors?

July 26, 2010

I’m talking about the smaller companies out there – employing perhaps 10 or 15 people in total, doing a few million dollars in annual revenue. The vast majority of these companies do not provide an e-commerce interface to their customers. I’ve heard many reasons for this, folks, including:

  • The need to maintain personal relationships as part of the customer’s supply chain.
  • The need to be able to upsell and cross-sell – which is supposedly easier by phone
  • Cost-benefit analysis – it costs too much to implement for too little benefit

Now I’d agree to this extent: if faced with tens of thousands of dollars to implement an e-commerce solution that would reduce my ability to upsell and cross-sell, and not do anything for my bottom line, I’d probably also take a pass. But (with apologies to Bruce Hornsby) that’s not The Way It Is.

If properly implemented, a B2B (business-to-business) e-commerce solution can be a very cost-effective addition to the array of tools you make available to your customers, making it ever easier for them to do business with you. And an increasing number of people in the workforce simply except to be able to do business with you online. And yes, I do mean specifically you. It may also cost a lot less than you think.

Music Distributor

Music Distributor D'Addario Canada wins with B2B

 Here’s an example of a company in the music distribution business, and their experience in implementing e-commerce as an add-on to their Inventory Accounting software. Note in particular the paragraphs headed “Benefits” and “Conclusion”. Please also feel free to visit the company’s website.

Bold prediction: within the next 2 – 3 years, if your customers cannot do business with you online, at least some of them will go somewhere else where they can do that.

My Question To You: what’s the obvious flaw in this post?


Inventory or Accounting Software – can’t I have both?

July 21, 2010

While traveling in South Africa recently during the FIFA World Cup, I was privy to an interesting conversation. A gentleman, employed by a local food distributor, was complaining that all the ERP software he had looked at was either strong on the operational side – inventory management, order processing – but weak on the accounting side, or vice versa. His companion, a South African-based accountant, agreed, and felt that this was a natural consequence of vertical-focused software being developed with accounting functionality as an after-thought.

It seems a similar situation to what we frequently find here in North America. There are very few vertical-focused ERP solutions targeted at small and medium-sized businesses (“SMB”), that provide depth and flexibility on both the logistical and accounting fronts. There are some exceptions, and quite honestly as my expertise is strictly in the field of Wholesale Distribution Software, perhaps there are many exceptions in the manufacturing or professional services arenas.

Here’s what I think tends to happen: the SMB, when looking at software, is typically focused exclusively on improving operational efficiency, because that’s usually the bottleneck, particularly in a growth phase. So little or no emphasis is placed on the financial modules. Of course, this comes back to bite the business owner later on, because no matter how efficient you become operationally, you still need to collect your receivables, pay your vendors (sometimes), and be able to measure and monitor your business performance, profitability, liquidity, etc.

The obvious conclusion is that the SMB should pay attention to that financial accounting functionality as well – but that’s easier sad than done. That’s because many SMBs do not have sufficient qualified or experienced accounting personnel in-house to truly assess prospective vendors.

Question: how can the SMB effectively assess accounting functionality when selecting an ERP solution? Please make your suggestions in the comments section below.


Blog Interrupted by World Cup 2010

July 14, 2010

Johannesburg, South Africa – 3 days after the World Cup Final. I sit here shivering in the (not heated) house, the inventory management software business I work in is so far away – and so close at hand.

I’ve been in South Africa for over 2 weeks now, and been blown away (in a completely positive way) by just about everything I’ve seen and experienced. Arriving at O. R. Tambo airport in Johannesburg was the perfect start – the most impressive airport arrival experience. The stadia I visited, the spirit, the people, the whole experience – just perfect. To all those doomsayers who predicted disaster, especially those I heard on CFRB talk radio in Toronto, I say time to stand up and apologize – you were just plain wrong.

I’ve also had no problem keeping in close touch with everything at work. High speed Internet was readily available via cellular providers, leaving me no excuse for neglecting this blog for so long – for that I plead the sheer absorbtion of the World Cup experience here in South Africa.

This is the 3rd World Cup I’ve experienced, and it;s by some measure the best in most respects. Here’s an article that sums it up as well as anything else I’ve read. And the vuvuzelas really did add to the experience.

Well done, South Africa!


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