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August 10, 2021
5 minute read

An ounce of prevention: How to avoid ERP migration mistakes.

Written by Laura Slauson
information cloud storage

Migrating to an enterprise-level ERP like NetSuite or Sage Intacct is a big undertaking, often taking more than a year to complete. Yet, despite the time and effort invested, many ERP migrations fall spectacularly flat. Some ERP implementation studies estimate that as many as 75% of businesses who migrated to an ERP later described the project as a failure.

To help our customers succeed, Airbase created thorough project plans for a smooth migration to either NetSuite or Sage Intacct. We’ve worked closely with many customers as they have navigated the transition, especially when it comes to ensuring that all vendors and payments are properly reflected in the new ERP. Along the way, we’ve discovered some details that have a big impact on the success of a migration.

If your company is ready to move to ERP, check out this list of common pitfalls and how to avoid them.

The problem: “I had no idea this would be so complicated. Will we ever finish?”

Solution: Define the scope of the project up front. Scope creep is one of the biggest hazards an ERP implementation faces. It’s often a good idea to start with a narrowly defined project, instead of launching into a complete migration of every process. Some of the processes managed through an ERP include:

  • Procurement
  • Sales and revenue
  • Banking (for example, transferring funds)
  • General ledger (entries, closing, allocation)

Having a single, broad implementation of all of these isn’t always the right decision, and can be more likely to lead to gaps. Each iteration typically goes more smoothly than the one before, as you learn more about how things work. Many companies find they can experience the many benefits of migrating to an ERP sooner when it’s broken down into smaller phases. Procurement is often the best place to start for a phased approach, but companies all have different priorities and processes, so this will vary.

It’s also helpful to specifically call out the things you don’t want to include. Seemingly small projects can otherwise creep in, sometimes with bigger impact than initially thought.

The scope of the project must align with the budget and the timelines. When building timeliness, consider hard-and-fast deadlines, and then allow some extra time. For example, if you are migrating from QuickBooks, allow a large buffer before the QB contract runs out. If your migration requires any customization, add in additional buffers.

When defining the project, take a look at the need for customizations, which also add to the cost significantly in terms of both money and time. Today’s ERPs are highly configurable to meet many use cases, which is often a more economical and efficient approach than making customizations to mirror your legacy systems. Always keep in mind that the goal isn’t to rebuild your old systems, but to overhaul the entire process.

The problem. “I’m not really sure why we do that. The person who designed that system has left the company.”

The solution: Document everything. It’s never a waste of time or money to create documentation.

The problem: “We’re falling behind because we don’t have enough resources.”

The solution: Choose resources thoughtfully. A common mistake is to create an implementation team of necessary people without taking scheduling considerations into account. If one person has a planned leave, for example, the impact can affect more areas than just their direct responsibilities. Workloads also have to be taken into account when building a timeline. Most people involved still must do their “day jobs,” so consider bandwidth and capacity when creating a plan, and talk to team members’ managers when necessary.

The problem: “I thought someone else was going to do that.”

The solution: Leave no task unaccounted for. When creating a project plan, ensure that every task has one specific person responsible, regardless of how many will need to work on that task. Avoid assigning tasks to departments.

The problem: “I expected better reporting after all of this work.”

The solution: View this as an opportunity to clean up data. “Garbage in, garbage out” is a cliché for a reason, and it certainly applies to an ERP migration. No matter how much time you spend configuring the system, if the data isn’t good going in, it won’t be helpful for analysis and decision-making. Ideally, once the ERP is configured, uploading data is merely a mapping exercise. Errors in existing data, even simple things like typos, will lead to reporting problems down the road.

Only data that holds value should be added to the new ERP. Implementing an ERP often comes at a crucial stage of growth, so you may have moved on from some of the data held in your legacy systems.

Your GL’s classifications and structure should also undergo a similar audit. Review the structure of the chart of accounts, simplify it as much as possible, and update if necessary. Check everything for consistency. To maintain data integrity and ensure transactions flow from one system to another, tags must be exactly the same in both systems, for example.

The problem. “We’re not really sure how these processes connect to each other.”

The solution: Create flow charts for every existing process before you start. There’s a practical reason for this: We probably don’t have to tell you that implementation consultants charge an hourly rate. If they have to spend their time figuring out your own processes, you’re wasting money. Before you start, carefully account for every process with detailed flow charts. No step is too small to include, and don’t overlook end users when gathering information.

As with data clean-up, this is a good opportunity for an internal audit. Look for redundancies or dated procedures that are no longer necessary.

An ERP implementation will not be successful if it is simply automating bad processes. 

Take a proactive approach to solving existing pain points — the implementation is a window of opportunity. 

The problem. “We need help, but don’t know where to start finding an implementation consultant.”

The solution. Use your network to find someone right for you. It’s best to find a consultant familiar with your industry, your accounting software, and your localization needs, so asking others in your network is a great place to start. Groups like the independent finance Slack group Off the Ledger are valuable resources for referrals. If you work with an accounting firm, ask if they have available consultants.

Our customers tell us that Airbase’s automated GL sync makes an ERP migration easier than expected. Jason Lopez, Controller at Lattice, remembers his company’s migration from QuickBooks to NetSuite: “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.” If you’d like to learn more about how Airbase can help, contact us for a demo.

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