FS system migrations: Beware the pitfalls and enjoy the upsides

Drawing depicting personal development during one's career
istock_jirsak_pd
Kevin Phillips
CEO
IDU
Columnist
Share this content

Kevin Phillips, CEO of Idu Software, outlines some of the top issues to consider when upgrading your financial systems.

The Apple iPad is only seven years old this year. Believe it or not, the first one was launched in April 2010, and if you dig a first generation iPad out of the storage cupboard you’ll find it’s probably more useful as a paperweight than anything else – it doesn’t even have a camera! Frighteningly it, and second and third generation iPads, are also unsupported by Apple.

Leaving aside Apple’s rabid upgrade tactics and the notoriously short lifespan of its devices, this is just one indication of how fast technology is changing. Therefore, it’s likely that the decision on whether or not to upgrade your financial system, for instance, is pretty much a done deal. Any argument for a “wait and see” approach has been crushed by the reality that the longer you stay with a legacy system, the further you fall behind your competitors, your customers and your employees.

In the event of a disaster your clapped out old iPad 1 equivalent is going to be harder and more expensive to fix, and the risk of data loss is greater. But you need to go into any systems migration with your eyes wide open. Here are some of the things to watch for.

End user resistance

One of the main factors that can make the difference between a migration project sinking or swimming is the involvement of the end users. Consider the public outcry when a platform such as Facebook or Instagram makes even minor changes to their software.

End users are typically attached to familiar experiences of systems, and this colours their expectations of any upgrades. Plus, they expect systems to be as easy-to-use and intuitive as the consumer apps they use every day. A disconnect here can manifest as resistance to the new system and a loss of time and money for the business.

User requirements

It is also vital to understand your users’ requirements and deliver on that. In other words, give them what they need to do their jobs well; don’t give them everything merely because it is there in the new ERP system.

Learn from the Google search home page: limit complexity to improve productivity. Do users really need to enter account codes? And for that matter, do they even need to see them? Remember that what a non-financial user of your new system requires can be quite different to that of a finance department user.

Chart of accounts opportunity

Now consider that a financial systems migration is a great opportunity to restructure your company’s chart of accounts (COA). Your business has almost definitely changed to such an extent that your current COA is no longer suitable to today’s reporting requirements.

However, when implementing an updated COA you need to get two things right. You need to create an environment whereby you can provide reasonable comparative information when the account codes are different. And, secondly, you need to figure out how to reproduce historical numbers when the accounts, as well as how they are aggregated, differ to the legacy system.

When mapping historical codes to new ones it is unlikely that there will be a one-to-one relationship from old to new. And when you have a one-to-many or many-to-one relationship, comparative reporting becomes a challenge. 

Data migration

And what about data migration? Decisions need to be made about which data is migrated and how many years to go back. The simple decision is normally to migrate immediate history and maintain a minimum license on the old system to be able to access historical information. But do you really think your old system is going to be a key priority for your previous service provider, especially after you have slashed your contract with them?

Major system migration is never easy and the pitfalls are many, despite what the salesman tells you! However, if you approach challenges with eyes wide open you are better prepared to identify the potential pitfalls and navigate around them. 

About Kevin Phillips

Kevin Philips IDU

Kevin is the founder and CEO of idu Software. He has degrees in Commerce and Accounting, and started idu with partners James Smith and Wayne Claassen in 1998. Kevin is fast becoming a thought leader in his field, and makes regular comment in the media about current affairs affecting business, as well as accounting, finance, budgeting and software. He is a columnist for Accountancy South Africa and Tech Leader, and has been featured in Sunday Times, Business Day, Enterprise Risk, Succeed and Entrepreneur. He is also a guest speaker on Radio 702, Kaya FM and Summit TV. 

About IDU

Established in 1998, IDU was created by accountants and financial systems specialists to deliver smart software solutions for budgeting and financial reporting across all standard ERP and financial systems. The flagship product, idu-Concept, is specifically designed to overcome issues that get in the way of effective budgeting, forecasting and reporting.

Replies

Please login or register to join the discussion.

11th May 2017 12:35

Some good ideas here, but I don't think the iPad analogy is helpful. It can be a fools errand to keep upgrading hardware, and smart devices make upgrade virtually impossible anyway. On the other hand, software is much easier to improve on with additional modules and front end improvements if the back end is sound.

My advice to anyone thinking they need a new finance system is to first consider whether some TLC for the current system would extend its life sufficiently, and think about the pain (financial and otherwise) you could save by sidestepping a new system implementation altogether.

Thanks (1)