Back 
Bridging the gap between ERPs and AP processes can be tedious and confusing. Cut out the confusion and streamline processes today.
Fill out the form to get your free eBook.
ERPs are essential for tracking finance and accounting, but they don’t manage the AP function from end-to-end. This is the main reason AP is consistently ranked by financial executives as the single most time-consuming function in finance. Beyond time spent, there are a host of other reasons why finance teams want to improve their AP operations. In The Last Mile of ERP, learn how companies are bridging the gap between their ERP and AP processes, including: – Dealing with Global Payment Challenges – Avoiding Exposures to Risk – Finding Strategic Opportunities
Does your business need to switch to a new, enhanced enterprise resource planning (ERP) system through an ERP migration?
“By 2027, more than 70% of recently implemented ERP initiatives will fail to fully meet their original business case goals.” – Gartner
ERP migration is a challenging process. For project success, ERP migration requires thorough upfront planning and collaboration, adequate training, consulting guidance, effective change management, and the commitment of both employees and executive management.
This guide defines the ERP migration process, explores why and when migration is necessary, identifies specific challenges associated with ERP migration, outlines the steps in an ERP migration checklist, presents best practices, and explains how Tipalti can assist.
What is ERP Migration?
ERP migration is the process of upgrading and implementing a new ERP system to replace an outdated legacy system. ERP migration includes third-party ISV (independent software vendor) integrations with the new ERP.
An ERP system manages your business operations for finance, operations, inventory management, supply chain, and HR. The old ERP system no longer meets business needs and is inefficient and costly. Companies migrate to a new ERP system to achieve scalability, compliance, and consolidation goals with acquired companies and global multi-entity structures.
To more fully understand what ERP migration is, differentiate between an ERP upgrade, reimplementation, and full migration:
- ERP upgrade: minor change to a newer version that doesn’t require process changes or customization
- Reimplementation: cleans data and changes from existing customizations to use newer standard ERP system features
- Full migration: complete change to a new ERP system after planning, cleaning system data, documenting streamlined processes, mapping comparable data fields, and transferring data
Why ERP Migration Matters
ERP migration (to a new ERP and third-party integrations as ERP extensions) matters across finance and accounts payable (AP) because it enables your business to manage its operations and back-office processes without manual intervention and to improve real-time decision-making. AI-driven processes available in newer ERP systems and third-party add-ons increase business efficiency.
ERP migration provides stakeholders across the organization with a consistent view of the information required for their business functions, eliminating siloed systems that require duplicate data entry.
Why and When ERP Migration is Needed
It’s essential to migrate to a new ERP as soon as your company outgrows its current system, needs more functionality and access to newer technologies (such as artificial intelligence), and recognizes the potential to reduce operating costs.
When computing ROI to justify the ERP change, cost reductions and reduced hiring needs from automation and scalability will help offset the system costs and ERP migration costs. With AP automation integration, your business will also reduce its purchase costs by taking advantage of timely early payment discounts from suppliers.
Why ERP Migration is Needed
Common triggers for ERP migration are:
- Outgrowing entry-level tools
- Scaling
- M&A or IPO preparation
- Global expansion
Why do most companies need add-ons for an ERP?
An ERP system may not offer complete automation, functionality, efficiency, or needed compliance without ERP integration add-ons. Add-ons help your company optimize the system and maximize your ERP investment.
For example:
Tipalti’s AP Automation software integrates with your multi-entity ERP system to:
- Streamline and automate accounts payable and supplier invoice processing, using AI agents
- Reduce fraud risks and errors
- Add controls and compliance
- Enable real-time custom analysis with Tipalti AI Assistant
- Save time
- Reduce costs
- Improve global payments
Tipalti enables domestic and cross-border payments to payees in over 200 countries and territories, across 120 currencies, with a choice of 50+ payment methods.
Tipalti Mass Payments software for global payouts integrates with your ERP and performance marketing systems.
When ERP Migration is Needed
ERP migration should occur when your existing ERP system no longer meets business needs, reaches end-of-life support, causes widespread inefficiencies, or relies on outdated technology, thereby increasing costs and reducing needed visibility for informed decision-making.
Reasons to migrate your company’s ERP include:
- The company has outgrown its SMB (small to medium business) ERP
- It has opened up multiple entities and needs a new ERP to support expansion
- Interested in moving from on-premise to cloud, or from cloud to on-premise (for data privacy reasons)
- Move from traditional ERP to AI-Native ERP
- ISV solutions that your company needs don’t integrate with your current ERP
- Need more functionality out of ERP with add-on modules or extensions that are specific to the business model
- Extend the overall functionality of ERP with 3rd-party solutions (ISVs typically)
Signs it’s time for ERP system migration, enhanced with third-party AP and mass payouts automation software integration, are:
- Slow accounting close
- Manual AP processes
- Audit risks
- Siloed systems
One of the first things we considered when looking at new tools is ‘how does it integrate with NetSuite?’ Then we identified our pain points – and a major one was managing our vendors and processing invoices. Our process was very manual, having to track down the emails to all department approvers.
Byron Whitman, Corporate Controller, Next Insurance
Types of ERP Migration
ERP migrations can be classified by your company’s goals and by changes in ERP system type.
Goal-Related Changes
New CFOs are catalysts for ERP changes. Additionally, CFOs who are dealing with new company circumstances, such as the addition of new locations or mergers with another company on a different platform, initiate ERP migration projects.
Rationales for finding a new ERP migration solution include:
- New CFO wanting to make an impact
- Migrate to AI-Native ERP
- Migrate to a multi-entity/subsidiary ERP because your company has grown
- Migrate to an ERP that has industry-specific features that are missing from the current ERP
Migrate to AI-Native ERP
Moving to a new AI-Native ERP through an ERP migration process makes sense for businesses looking to adopt time-saving, innovative technology. Built-in AI can help companies streamline and accelerate business processes, improve reporting, enhance visibility, and enable better business intelligence.
Migrate to Multi-entity/subsidiary ERP
Growing businesses often add new entities, such as subsidiaries, to expand geographically and gain access to new products, technologies, and markets through mergers and acquisitions (M&A). The ERP system needs multi-entity capabilities.
Migrate to an ERP with Industry-Specific Features
Perhaps your current ERP system isn’t a good fit for your industry. Your company may choose to migrate to an ERP with more industry-specific features.
ERP System Type Changes
Desired changes in ERP system type, resulting in an ERP migration initiative, include:
- Legacy ERP to modern cloud ERP: Older, legacy ERP systems are inefficient in contrast to new cloud systems. They may require custom software code from the IT staff to customize and update the systems and fix glitches.
- On-premise to cloud: Cloud ERP is a more cost-effective solution than an on-premise ERP system, which requires purchasing and maintaining hardware, as well as hiring and managing IT staff to update, maintain, and back up software.
- Cloud to on-premises: Some companies may prefer data privacy in an on-premises ERP system, although most companies prefer true cloud or cloud-based ERPs with integrated cloud ERP enhancement software.
- Cloud-to-cloud: Small businesses can migrate from entry-level cloud accounting software to mid-market cloud ERP software with third-party integrations for AI-driven automation. The new ERP cloud migration provides enhanced software functionality, automation, scalability, multi-entity, and global features to meet your business needs. Larger enterprises may migrate to high-end ERP systems (such as SAP S/4 HANA or Oracle) that offer the most capabilities.
- Partial vs full system migrations: Businesses with a manual ERP system that meets most of their basic needs may opt for a partial system migration rather than a full one. A partial system migration adds more functionality through ERP add-on modules or integrates at least one 3rd-party add-on for ERP enhancement (such as AP automation).
Outdated systems, such as legacy ERPs, lack technological advancements, have poor user interfaces, and provide insufficient reports that are time-consuming to customize. Therefore, outdated ERP systems are complicated to use. They may require augmentation with spreadsheets, which can be time-consuming and prone to errors.
Real-time visibility and timely recording of accounting transactions may not be achieved with your existing ERP system. Multiple systems for different business functions may be siloed rather than accessible through a single, unified database across the organization. ERP migration can replace siloed systems with a unified ERP platform.
A full system migration can occur in different ways. For example, a corporation may move its entire existing ERP system to a new ERP system with multiple add-on modules and integrated third-party enhancements. When a company is acquired and needs to migrate its existing ERP system to the acquirer’s ERP system, it’s considered a full-system ERP migration rather than a partial migration.
Closing the Gaps After a NetSuite ERP Migration
Migrating to NetSuite is a major milestone, but many finance teams still face manual processes and control gaps after go-live. Learn how automated accounts payable and global payouts help close those gaps and turn your ERP investment into real results.
Key Phases of ERP Migration
Key phases of ERP migration are:
- Planning
- Data preparation and cleansing
- Migration execution
- Go-live
- Post-migration stabilization
1. Planning
Planning an ERP migration requires:
- Selecting the best system for your business needs
- Obtaining top management and employee support for the ERP migration project through widespread communication and commitment
- Assembling a collaborative, cross-functional ERP migration team with leaders and CFO involvement
- Engaging consulting resources with experience and competence in the new ERP system and its planned integrations
- Setting, tracking, and managing milestones, task assignments, and deadlines
- Determining your company’s ERP data migration strategy and a detailed ERP data migration plan
- Making employee training plans
- Accessing resources, such as online help, webinars, or user conferences, an ERP migration checklist (with your business customizations), and system-specific integration steps
Better upfront planning increases the likelihood that your company will have a smooth transition to its new, fully integrated ERP system, providing a better user experience for its employees.
2. Data Preparation and Cleansing for Data Migration
ETL (Extract, Transform, Load) is an IT term that encompasses extracting data from the existing ERP, cleansing it, and transforming it to meet new system specifications in the Transform stage, then loading the prepared data into the new ERP during data migration.
Before transferring existing data to the new ERP system and its add-on integrations, cleanse it to remove corrupt data, errors, duplicates, and other issues, improving data quality and making it ready for transfer when the data is transformed into the required format. Your company’s master data files should also be cleaned to work with your new ERP system. Master files used to process transactions include supplier information, customer names, and product details.
Use ERP data-migration best practices to cleanse data from the old systems before mapping comparable fields to your new system and its add-on components. Understand the data structure.
Select a tool that performs data validation during data migration. Refer to an ERP data migration checklist. The new ERP vendor’s or developer’s system documentation may refer to built-in data migration tools or recommend another solution. These tools preferably use automation and AI. Schedule the data migration in a time slot that minimizes disruptions to staff and operations.
3. Migration Execution
ERP migration encompasses all processes required to implement a new ERP system, extending beyond ERP data migration tasks alone.
To complete the ERP migration process, follow the steps in your customized ERP migration checklist and the resources provided by your consultant for the specific ERP system, including modular ERP add-ons and integrated third-party ERP solutions.
4. Go-live
Before going live with the ERP implementation, perform adequate testing, preferably in a sandbox environment. The testing process will help prevent going live with a system that produces errors and cannot replicate the results of your existing ERP system. It will help avoid downtime later when the ERP platform is live.
5. Post-migration Stabilization
In computer system implementation, post-migration stabilization is the stage following ERP migration, during which your team collects, tracks, and resolves reported post-implementation system issues. Your team should also complete a post-migration report, documenting the successes of the ERP implementation and identifying areas for improvement in future software implementation projects.
Challenges with ERP Migration
ERP migration challenges are widespread. Implementation challenges can frustrate the migration team, which must thoroughly plan, exhibit resilience, and make necessary adjustments as issues arise during the ERP implementation process. During ERP migration, employees must also complete their current workload, which adds to their stress.
ERP migration challenges include:
- Getting major project buy-in, commitment, and leadership
- Conducting adequate planning, budgeting, and training
- Finding the best consultants for ERP migration
- Overcoming frustrations
- Redesigning business processes
- Data preparation and migration
- Adequate testing
- Facing vendor lock-in or misfit tools
- Doing over-customization
- Experiencing timeline and budget overruns
Major Project Buy-in, Commitment, and Leadership
CEO and CFO leadership, buy-in, and employee commitment to this significant, lengthy ERP migration project are essential. Organization-wide communications from executive management, expressing support for the ERP migration project, should be conducted prior to the project launch. The ERP migration process is lengthy and feels like it takes FOREVER to complete, with a project timeframe of 1 to 2 years.
Counseling employees regarding change management may be helpful. Team-building lunches or other group events with recognition can help reignite the motivation of the ERP migration team during the process.
Adequate Planning, Budgeting, and Training
Spend enough time upfront for budgeting, planning, and training to prevent delays and unfavorable surprises or glitches later.
Experienced System Consultants
Select the best consultant available for implementing your new ERP system. Experience with the new ERP system is essential. Budget and plan to hire another consultant to integrate third-party applications, such as Tipalti AP automation or a CRM like Salesforce, for customer relationship management, if the initial consultant lacks this expertise.
Overcoming Frustrations: Round Trip from Eurphoria to Despair (and Back)
The initial euphoria of ERP implementation gives way, over time, to project team despair and frustration, as illustrated by a common meme. However, a successful ERP migration will enhance the employee experience and efficiency, while also reducing costs. The euphoria can return after a successful ERP implementation is completed. Successful migration team members will receive recognition that enhances their career advancement possibilities.
Redesigning Business Processes
Before switching to a new ERP system and its add-on software, document, streamline, and redesign business processes to fit the new integrated system.
Data Preparation and Migration
Adequate data cleaning, field mapping from source to target systems, and accurate data transfers during migration are challenges that must be addressed in the data migration process.
Adequate Testing
Adequate testing in the best possible environment before going live with the new ERP system is challenging but essential to ensure the new system operates correctly. Look for sandbox testing environments provided by software developers.
Vendor Lock-in or Misfit Tools
Avoid software vendors that make it difficult to switch to the right product if you have selected misfit tools that don’t match your current business needs or scale with anticipated growth.
Over-customization
To prevent a very lengthy and significantly over-budget ERP migration project, don’t spend too much time and money on system customization.
Timeline and Budget Overruns
Your deadlines may not align with the original timeline, potentially resulting in budget overruns. But try to limit work when possible to meet your business goals, avoiding over-customization and other time traps. Use a rolling budget system to update your budget and cash flow forecast as soon as impending budget overruns become apparent.
Planning Your ERP Migration Strategy
Multi-Functional Stakeholders
When planning your ERP migration strategy, align key stakeholders across Finance, Ops, and IT departments. Select a multi-functional team that can collaborate with teams from other functions within the organization to reach common goals.
Future-Proofing Goals
During the ERP migration planning stage, establish broad-ranging goals that align with the company’s objectives. For example, goals can include IPO-readiness, audit-trail adequacy, and support for international entities.
Incorporating AI and Controls
AI is increasingly important in ERP migrations, as Deloitte indicates in its Perspective blog about AI-powered ERP controls:
Embedding modern, robust controls—controls built with automation such as AI—into the cloud migration workstream can mitigate these risks and streamline the transition of data and processes into the cloud. These embedded, automated controls can also address ongoing post-migration risks within financial reporting, audit, and compliance workstreams, including Sarbanes-Oxley (SOX).
AI-driven tools reduce manual data entry, improve data accuracy, and accelerate processes from the very beginning of the new ERP setup. These AI tools include Tipalti’s AI agents for automated workflows to streamline processes and Tipalti AI Assistant for creating real-time, custom reports from conversational prompts and the system’s real-time data. A Tipalti AI agent utilizes its Smart Scan technology (OCR AI) to extract invoice data from various allowable formats, including PDF documents, for automated invoice processing. Another Tipalti AI agent enables automatic routing to approvers.
Structure, Accurate Historical Data, and Secondary Backups
During ERP migration, plan to structure your chart of accounts, tax IDs, and vendor records to align with your new integrated ERP system.
Accurate historical data is extremely important. Plan to clean the data to ensure data integrity, using data mapping to correspond with the fields in the new ERP for migrating data sets.
It is essential to prepare secondary backups of all data before performing ERP data migration. For example, migrate all data to a local server before transferring it to your new ERP. Or utilize your consultant’s advice or services to achieve this pre-migration data backup and ERP migration. Tipalti offers implementation consulting services (at an additional cost) and partners with consultants, such as RSM, to support users’ ERP migrations.
How to Prepare: ERP Migration Checklist
Your consultants will provide your ERP migration team with a detailed ERP migration checklist tailored to the specific ERP and third-party integrations you intend to implement.
A 5-step summary ERP migration checklist is:
- Audit and clean existing data
- Define system requirements and workflows
- Select tools and migration partners
- Build and test in sandbox environments
- Create a post-go-live stabilization plan
I wanted to have as few ERP integrations into our ERP as possible. So that meant finding a platform that could handle not just invoice approval, but also the payments. We also struggled with the local banks, too. [With Tipalti], to be able to control everything in the bank and have a different payment solution gave us more flexibility.
Becca Simmons, Head of Finance, Vivino
Best Practices for a Successful ERP Migration
Successful ERP migration best practices include:
- Engage all relevant stakeholders early
- Document all custom fields, workflows, and dependencies
- Validate financial reports in UAT (user acceptance testing)
- Use automation to reduce risk
- Plan for phased cutover and rollback paths
User acceptance testing allows end users to test the system during the final testing phase of the ERP migration, ensuring it is usable and delivers the expected functionality without excessive downtime.
Tipalti exemplifies best practices in automated risk reduction. Tipalti automation software with ERP integration reduces fraud risks, invoice payment errors, and compliance risks by:
- Using OCR AI for invoice capture with data extraction
- Matching supplier TINs to the IRS database
- Offering Tipalti Detect to monitor suppliers for potential fraudulent suppliers’ online behavior
- Automating 3-way or 2-way PO matching
- Applying 26,000+ automated payment rules to flag exceptions
- Automating global regulatory compliance and tax compliance to avoid penalties.
Tools Commonly Used in ERP Migration
Some common ERP migration tools are
- Native ERP migration utilities
- iPaaS tools: Celigo vs Boomi vs custom API work
- Data prep platforms
- QA/test environments
- Tipaltiʼs real-time sync with NetSuite, Intacct, SAP, QBO, Microsoft Dynamics Business Central
Your new ERP system may natively enable ERP migration with its built-in utilities. Your system may embed Celigo or another iPaas provider’s tools into its SaaS applications.
Consider using iPaaS (Integration Platform as a Service) tools, such as Celigo or Boomi, instead of custom API development.
Comparing Celigo vs. Boomi for ERP migration: Celigo offers a pre-built integration library for SaaS system integrations, including cloud-to-cloud, on-premises, or hybrid ERP and CRM integrations for specific systems. Boomi provides connectors and a low-code environment for creating integration processes. Boomi excels at high-data-volume, complex integrations.
Your business can also use data preparation platforms and QA (quality assurance)/ test environments during its ERP migration process. Sandbox test environments for your new ERP system or third-party integrations (such as Tipalti AP automation or mass payments software) can help software developers, consultants, and some members of the implementation team experiment and debug it before using the new system live in the real world.
Tipalti syncs data bidirectionally in real time with your integrated ERP system, including ERP integrations with systems not listed in this guide. Tipalti’s automation software includes automated, real-time payment reconciliation for large global batch payments or payouts, helping your company accelerate its accounting close.
How Tipalti Can Help with ERP Migration
Tipalti helps with ERP migration in these ways:
- Has certified ERP integrations for NetSuite, Sage Intacct, Microsoft, and SAP
- Syncs with sub-ledgers and supports multi-entity rollups
- Includes built-in global tax compliance and audit controls
- Automates invoice processing, onboarding, and reconciliation
Tipalti works with all of these ERPs (and more), so you can easily migrate your Tipalti instance to your chosen landing spot.
Tipalti’s unified, AI-driven finance automation software, which integrates with your ERP system, will save your staff time and resources. Beyond its many other benefits, Tipalti’s automatic payment status feature significantly eliminates staff disruptions caused by suppliers constantly inquiring about their payment status.
I like scheduling payments through Tipalti. I pay the bills and fund the account. There is no manual work at the end of the month with our seamless ERP integration, and payments flow automatically.
Sean Doheny, Treasury Manager, Sezzle
Conclusion
ERP migration is complex, but success is possible with the right plan, tools, and partners.
Tipalti is purpose-built to support finance teams through ERP transformation.
Expand your ERP migration goals to achieve better results.
Tipalti ERP integrations automate your global accounts payable and payout workflows, saving staff time, reducing costs and errors, and improving real-time spend analysis and compliance.
