Managing ERP migrationsApril 25, 2011 No Comments
During my brief interaction with Raghuraman Ramamurthy, who heads Operations Excellence in Barry-Wehmiller International Resources P Ltd, Chennai (http://bit.ly/F4TRaghuR), the topic of discussion is ERP migration. A decision to go with an ERP needs to be paralleled with that of deciding your life-partner, begins Raghu. “Enough thought should be given to decide on your first ERP, and more thought needs to be given to decide if you want to migrate.”
He advises professionals, therefore, to go through a detailed assessment to understand if the new ERP that they are looking to migrate to is the best fit for their enterprises or whether a re-implementation of their existing ERP can address the problems. That way, change management is a smaller exercise, Raghu reasons. Our conversation continues over email.
Excerpts from the interview.
When would organisations look to migrate from one ERP to another? What triggers the decision to migrate?
Migration from one ERP to another is a daunting task for any organisation, not so much from a cost or implementation hassle perspective, but more so since it is a large change management exercise. Hence, organisations would like to think long and hard before taking the decision to migrate from one ERP to another. Here are some cases that would trigger an ERP migration:
1) Legacy system to a new age system: ERP implementations that are still based on legacy systems are difficult to maintain. Also, finding skilled staff to work on those systems is tough.
2) Growth: Some ERP systems suit SMEs (small and medium enterprises); but when the organisations outgrow what their current ERP offers them, they will look to migrate into scalable systems.
3) Acquisitions: Most often an acquired company moves into the standard followed by the acquiring company. This is not so much to impose authority during the execution, but to get everyone on the same platform so that integration is easier as one company. There have also been instances where the acquiring company has moved to the ERP platform of the acquired company. It is purely a business decision rather than anything else.
4) Wrong fit: While this is a rarity, this is a possibility. After years of battling with their existing systems, some companies decide that their current ERP is not the best suited for them and that they will need to migrate to something more appropriate.
What are the typical challenges in an ERP migration?
1) Change management: The challenge that is top of the list is change management. In my opinion, if this can be addressed effectively and people buy in the idea and are ready to accept the change, then all other challenges are localised and can be addressed easily. Ultimately, it is the people that have to change because they will use the system day in and day out, as compared with the senior leadership that wants this change to happen.
2) Incorrect understanding of the underlying business process: Most often during a migration, study and analysis are restricted to what features the current system offers and what to expect in the new system.
3) Data migration challenges: The data structures between the two systems may not match in areas where the functionalities are handled differently.
4) Integration challenges: Integration with other systems that will continue to operate after the migration can pose challenges. Most often, these systems are designed to work around the current ERP and may not be the best suited to work around the new ERP.
How do you overcome these challenges?
The approach to overcoming these challenges is to address the migration as if it were a new ERP implementation. Start with the underlying business process and not with the current ERP as the starting point. Look at the organisation as a whole to understand the business process flow and not as functional silos that hand-off things to each other.
Don’t look at ERP as a standalone software tool. Look at the organisational systems in their entirety and plan the implementation. If some of the surrounding systems need to be changed, then those decisions are also part of the migration exercise.
Always remember, it is the process that drives the systems and not the systems that drive the process. What a system can do cannot drive how we execute the process. If the system models a process that is better than what is being followed currently, then it could be adopted, but a process should not be adopted just because it is difficult to get the system to work to that process.
Invest the time to assess, talk to as many users as possible to gather requirements before getting into the actual implementation.APPLICATION INTEGRATION