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Here’s a scenario that might sound familiar. Still in the haze of an early morning at the office, you accidentally overfill your coffee mug and now need to get a precarious pot of boiling hot liquid back to your desk. You could try carrying the mug full, but you’re almost certain to spill hot coffee on your hands. Option two is to wait until the coffee cools, then have a few sips and carry the rest back to your desk safely, but that means cutting into the time you woke up early to gain. The final option is to empty the mug slightly, which is the safest bet but means you get less coffee.
“The best option, even if it’s not always simple, is for organisations to be more selective and drain some of their data before moving over to the cloud.”
At this point you may be wondering what this has to do with cloud ERP, but bear with me. Many companies planning to move from on-premise ERP to the cloud are dealing with a similar “overfull cup” scenario. They’ve built up so much data and so many intertwined processes in their legacy systems that it’s become nearly impossible to migrate all this information to the cloud quickly and securely.
Any attempt at a complete lift and shift will only result in companies getting burnt and important data being lost in the cracks during the move. On the other hand, if businesses take the time to pore through every data point in their legacy ERP it could be months before they actually start their transition. The best option, even if it’s not always simple, is for organisations to be more selective and drain some of their data before moving over to the cloud.
There’s obviously a balance to be struck here. At a time where data is one of their most valuable assets, companies need to hold tight to information that will help them better serve their customers. That said, a line needs to be drawn somewhere.
Here are a few pointers for making a clean transition from on-premise to cloud ERP based on the experiences I’ve had with my own clients:
It might be tempting to move quickly and think of cleansing your data as an opportunity to weed out reams of stagnant information, but companies have to be more strategic in their approach.
A lot of legacy data is inaccurate or out of date and needs to be cleansed.
For one, businesses need to factor in data compliance regulations when choosing what to migrate. This is largely self-explanatory – companies should know what financial data they are obligated to hold onto and for how long before leaving any information behind – but this is often more complicated than it appears.
Businesses that operate multi-nationally can’t apply the same expiry date to their data as each region will have different regulations that need to be respected. Companies that work in heavily-regulated industries, such as healthcare and financial services, need to be extra vigilant in this regard and conduct a detailed review of their legal obligations in every jurisdiction where they operate.
Of course, there’s little point in holding onto data that’s genuinely outdated and irrelevant. As businesses increasingly work with new analytics and BI systems, there is a strong case for keeping historical data to improve their forecasting, but in some cases the time and cost involved in piecing together large volumes of information outweigh its potential benefit. A hard-headed cost-benefit analysis is the best way to manage this dilemma and ensure you carry over as much valuable data as possible without placing undue burdens on the organisation.
It’s also worth noting that a lot of legacy data is inaccurate or out of date and needs to be cleansed , which conveniently leads to my next point.
Any migration to the cloud will require some degree of data validation and de-duplication, both of which can be time-consuming and complex tasks when it comes to ERP data. Even an honest mistake can cause problems. I recall one company that had misspelled “Dallas” as “Dalas” when manually inputting client data into their legacy system and couldn’t find the information in the right location in its cloud ERP. It eventually came to light that the software couldn’t recognise the client’s location as Texas just because of the typo.
It’s ultimately down to the company and its finance team to align their mapping with their future plans.
One major reason for this is that legacy ERP systems traditionally created different sets of files for each country a business operated in while today’s cloud ERP systems sit across the entire organisation and host everything in one place. That means that when migrating from one to the other, there will likely be many cases of duplicate data and no clear relationship between information held in different locations.
Added to this is the more common problem of unintended data duplication, for example through the simple misspelling of a customer’s name which might have created multiple records for a single account in your legacy system. As IT experts know all too well, garbage in equals garbage out so it’s imperative that businesses undertake a thorough de-dupe process with rigorous field matching if they want to keep the right data in the right place and make it accessible to all.
Migrating to cloud ERP systems isn’t only about the accuracy of individual data points but about the relationship between them. That is why it’s so important not just to map these relationships – a job that can be done easily enough by IT – but to decide on the logic behind them. It takes department heads and finance leaders working together to achieve this as these relationships have a fundamental impact on business strategy.
Any reputable cloud vendor will be able to provide tools that can help with this process, but it’s ultimately down to the company and its finance team to align their mapping with their future plans . Take a manufacturing business as an example. Each product it sells has a cost (including acquisition, labour, materials, logistics, warehousing and so on) but it might also have different cost profiles (if it is shipped to different export market, for instance). All this information needs to be accurately carried over to the company’s new ERP system. Any inconsistencies could lead to invoicing errors, which will turn off customers and affect the business’ bottom line.
Migrating to the cloud is relatively simple as IT transformation projects go, but nobody ever said it’s a process without its challenges. The most important thing for any business is to be tactical, and to fully understand how to prepare for the shift before acting on their plan. With all the right variables in front of you, they’ve got the best chance of bringing their ERP into the cloud and coming out of their transformation without any burn scars.