September 10, 2020

How to migrate to a more powerful ERP while protecting data integrity and minimizing disruption.

Written by
Erlyn Ordonez
Erlyn Ordonez
CPA and NetSuite Certified ERP Consultant
How to migrate to a more powerful ERP while protecting data integrity and minimizing disruption.How to migrate to a more powerful ERP while protecting data integrity and minimizing disruption.

The good news is that your company is growing. The bad news is that your ERP isn’t keeping up. It may be time to consider accounting software that supports your company’s expanding needs. Small and/or early-stage companies typically operate on user-friendly ERPs, like Quickbooks Online or Xero, that are designed to support simple company structures and smaller teams. Their functionality can be supplemented with integrations into third-party software solutions but, eventually, a more highly engineered, enterprise-level ERP will be needed. Migrating to a more robust ERP, such as NetSuite or Sage Intacct, ensures that your finance team has the tools and functionality needed to scale a more complex business organization. 

How a multi-functional ERP supports growth.

Some of the advantages of enterprise-level ERP solutions, like NetSuite and Sage Intacct, include:

  • The ability to support multiple subsidiaries. As companies grow, their corporate structure often expands to include subsidiaries. These ERPs support accounting and consolidated reporting for multiple subsidiaries.
  • More customizable permissions controls. Growth often leads to a more complex organizational structure. Being able to customize roles and permissions at a granular level helps to create financial workflows that improve both productivity and security.
  • Flexible dashboards and multi-dimensional reporting. The ability to customize dashboards and reporting parameters is essential for more complex FP&A functions. A more tailored dashboard provides a better view of company financials for better decision making. And more robust reporting functions allow for greater segmentation, and the ability to adjust reporting views, to reflect selected levels of activity across the company. 
  • Support for more integrations. The more highly engineered ERPs provide opportunities for more and deeper integrations into third-party software vendors. 

Protect yourself from risk and disruption. 

Thoughtful project management is essential when switching from one ERP to another. A migration can lead to important changes in workflows, carry risks to company data integrity, put a significant strain on a finance team, and surface opportunities to rethink conventions and processes to carry forward into the new system. 

You will be reliant on your vendor partners to integrate their software into the new ERP. Fortunately, most third-party service providers have the experience and knowledge to guide successful ERP migrations. Although every migration requires a personal, carefully planned approach, we share some tips we’ve learned at Airbase below. 

Project management is key.

“Set yourself up for success.” That expression may be a cliché, but it’s indisputably true when you’re preparing for projects like this. 

The two elements that ultimately determine your success are communication and preparation. Take time to prepare every possible aspect before you start. Communicate clearly with all stakeholders. Be sure to address the following elements: 

1. Know who you’re working with. When you change ERPs, you must consider all other integrations that interact with your existing system, including AR, AP, budgeting, HR, expense management, and FP&A systems. You must ensure that your new ERP accepts data from all the other systems you have in place, and that all integrations follow agreed-upon data standards. 

Obviously, this is easier to accomplish if you use a multi-functional platform that performs many accounting functions. In fact, now might be a good time to do an “integration audit.” Are you using the best tools available? Could financial operations be streamlined by using fewer systems? Switching to a platform that performs multiple functions now will reduce the number of vendors you have to work with for the migration. 

2. Time the migration carefully. Timing can make or break this project. That’s because an ERP migration is far more complex than turning one switch off and another one on. Data continues to flow through your system as the migration happens, and you don’t want to lose any valuable information. 

Therefore, it’s important that everything, including all third-party integrations, align exactly. And it’s equally important that the timing is clearly communicated to everyone involved. Because the migration happens in real time, all internal teams and third-party vendors must be coordinated. 

3. Review categories, tags, and vendors in your current General Ledger. The structure of datasets should be reviewed and updated as needed. This exercise is important to ensure data integrity is maintained as you migrate from one system to the other, and as transactions and other datasets flow from one system to another. For example, tags should be the same in both systems in order for everything to go to the right place. 

In fact, it’s often a good idea to view an ERP migration as an opportunity to rethink your GL’s organization. The structure and classifications used in a GL when a company was small may not suit a larger company. 

As with third-party integrations, this is also the time to make changes if you feel your accounting functions could benefit from restructuring how the GL is organized. You can also discard data that is no longer relevant. Don’t forget to communicate any changes to the data mapping clearly to all stakeholders.

4. Back your data up. As a best practice, third-party service providers typically create back-up copies of all data. (Airbase certainly always does.) But it’s always a good idea to do this yourself as well, if only for your peace of mind. 

5. Trust the process. Once you’ve made these initial project management decisions, the rest will flow smoothly behind the scenes if you work closely with your service providers.

That was the experience of Jason Lopez, Controller at Lattice and an Airbase customer, when he upgraded the company’s ERP to NetSuite. “I was a bit nervous because it was something I hadn’t done before,” he remembers. “But it was really painless. The transactions were flowing in the next day. I don’t know what goes on in the background, but it works. Migrating our spend was actually the easiest part of the process.”

Extending the lifespan of your current ERP. 

If you’re not sure that your company is ready to migrate to a more comprehensive ERP, it’s worth considering tools that can augment the functionality of smaller ERPs. These user-friendly platforms integrate well with many other tools, such as intelligent spend management systems, so a company may be able to use additional third-party software to achieve its goals without changing its ERP until a later date. 

For example, Dmitri Litin, Controller at AspireIQ, notes that integrating with Airbase increased the functionality of QuickBooks Online, which allowed their ERP to grow with the company. As a result, “Airbase allowed us to extend the life cycle of QBO by another two years.”

For a smooth migration to a more powerful ERP, be sure to align everything in advance, and communicate timelines and expectations clearly with all stakeholders. A seamless transition will enable you to expand your finance operations to keep pace with your growing company.

Erlyn Ordonez
Erlyn Ordonez
CPA and NetSuite Certified ERP Consultant

About Airbase

Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all paymentsphysical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.