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Construction ERP: Migrating From On-premises to Cloud

Apr. 15, 2022

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You get an email from your construction enterprise resource planning (ERP) provider announcing it will sunset and discontinue support for the platform in the coming years. Your company has been using the software for years with years of data. What do you do?

There might be an option to transition to a cloud-based platform, but your best choice is to find a new platform developed specifically for your business needs. Providers transitioning on-premise programs to cloud-based platforms aren’t considering Software-as-a-Service (SaaS) platform benefits.

They’re putting in the minimal investment to adopt current industry standards without improving platforms holistically. Their SaaS option will be a cloud-based copy of the application with all the existing frustration.

Now is the time to find your new construction ERP, but where do you start?

Why Software-as-a-Service?

On-premise solutions have growing technical costs. Local servers hosting sensitive data, individual employee installations, and an internal technical team add to the recurring costs.

Software-as-a-Service platforms reduce and remove costs because they are hosted and managed by your provider. Employees access the platform through a browser and internet connection without installing an application.

Your SaaS platform provider manages all the technical platform aspects, leaving your technical team to focus on best practices and strategic initiatives. Also, new features and tools roll out without disruption to your company.

One major benefit you need is accessible real-time data. Instead of merging data to get reports (which instantly ages data), a single platform with real-time data can create reports to show at-the-moment status. And it will also allow you to create custom reports quickly because the entire database lives in one place.

Data aggregation is one of the biggest strengths of cloud-based platforms. If you’re using on-premise or hybrid platforms that are integrated with multiple systems, you will never have the latest and greatest data sets.

Leaving On-premise or Hybrid Platforms

A major reason to leave on-premise construction ERP platforms is cost. Each time the platform is updated, it requires many hours to prepare, plan, and deploy. This leads to downtime for maintenance and loss of work time.

Local servers are security liabilities too. You have to limit physical access and catastrophic events like fires, floods, or earthquakes could take your company offline.

Another option is using a hybrid platform. Hybrid platforms are a combination of on-premise and cloud-based platforms. Even though a hybrid system might be cost-effective, it’s a stop-gap technology solution. You might be storing data in the cloud, but it still requires physical systems and doesn’t offer the full capabilities of a SaaS platform.

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It’s Time for Software-as-a-Service

What are your current workflows, process standards, and procedures? Employees are comfortable with current software because it’s the company standard. But how much time is lost with manual tasks, less-than-adequate integrations, and dated reporting? Could the company gain hours of productivity if it changed?

Think about it strategically:

The Present

  • What tools and features do you use now?
  • What are common employee complaints and issues with the ERP?
  • How many single-purpose systems do you use?
  • What is your technical cost every year?

The Future

  • What ERP features do you want but the provider never supported?
  • What operations improvements have you wanted?
  • How much money could you save by removing single-purpose systems?
  • What work could be easily automated to regain work hours?

The initial investment to move from an on-premise platform is big. But if you’re not willing to change, your company is likely to miss out on future opportunities because of your unwillingness to evolve and improve internally.

Your Tech Stack Audit

A deciding factor for leaving your existing construction ERP should be data. On-premise systems use local data. A hybrid on-premise/cloud system might be sharing data, but generally, the data exists onsite with syncing happening on a schedule instead of real-time.

How Your Data is Stored

Maintaining local data means servers, scheduled backups, redundancies, and other checks and balances to ensure you don’t lose any data. There are also compliance and regulations about the security of your data. Onsite storage relies on physical security, from the building access to server room entry. Stealing data can be as simple as removing hard drives.

A cloud solution stores information in data centers stored across multiple sites. This reduces data loss and, more importantly, places the maintenance, compliance, and regulation responsibility on the provider. Your company practices high-quality security standards to monitor access but disabling an account is simpler than locating a lost device.

Data Formats

Another limitation is data formats. In the past, data storage formats could be unique to that program. To be readable by other programs, developers have to create API integrations.

But to be efficient, platforms need to be able to read the data and write data back to your ERP. A read-only option means possible double data entry.

Investing in a new platform that can natively share information saves time because you’re not managing data in separate places.

Data Quality

When was the last time you cleaned your data? Is the data following internal standards or are fields missing, or were there updates that affected customer histories?

Missing entries and abandoned data increase the data set without contributing to your business. Audit your data and consider cleaning everything from the top down. It’s an investment to start, but you need clean data to measure business success.

Data quality must be a business priority. Your technical team should work with other stakeholders to make sure there aren’t gaps or holes that cause problems.

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The Big Decision Day – It’s Time to Find a New Construction ERP

When told that your construction ERP is shutting down, proactive providers give you a lot of notice. It’s rare that a company disappears and shuts down unexpectedly.

Deciding on a new ERP isn’t an upcoming fiscal year decision; it needs to be addressed with stakeholders immediately. The construction ERP is a foundational piece of technology that makes or breaks your business.

Ideally, you will switch and be up and running before your existing ERP is sunset. The overlap gives you time to troubleshoot, train, and optimize operations while onboarding your employees. There should never be a day zero switch. The disruption to your business will cause problems with employees and could affect customers.

You should create a project team to plan and manage this change. They ensure the right processes are created, effective implementation of change management, and all questions are answered from executives to employees using the system.

Finding Your New Platform

As we mentioned earlier, choosing your new construction ERP should be a strategic decision:

What Construction ERP Features Do You Use Now?

These would be the tools and modules that employees use for daily work. The new ERP, at minimum, supports regular operations.

You can also audit the current feature set and see what has the highest usage and limited or low usage across the company. Your provider should be able to provide this information. You might discover that you’ve been paying for a feature that no one uses.

What Construction ERP Features Do You Want?

Have this conversation across every department. SasS platforms can offer custom features and tools packages instead of buying the full suite, which reduces costs. And newer platforms allow for specific user access level permissions managed by teams instead of technical support.

Also, create a feature wishlist that your team wants in the new platform. This is as simple as better third-party integrations or mobile app support. An operations ERP may not have a native accounting tool but will intelligently integrate with accounting software to share data. The platform should include useful features like construction project management and customer management.

Beyond day-to-day workflow support, a new ERP will offer real-time data reporting. Your data contains valuable information, and the reporting tool should be able to segment data as needed.

You will have standard reports, but you can also create custom reports to deep dive into existing data. Some providers even take familiar workflows from existing tools, like Microsoft Excel, and support similar report building functions so employees can transition quickly.

Keep in mind that it’s easy for a SaaS platform to introduce new features. The provider will push updates during off-hours and the next time employees access the platform, they have the latest version instantly.

Research, Research, Research

With a list of must-haves, great-to-have, and like-to-have, time to start your ERP research. Google might sound like a logical option, but you have to look through too many candidates. The best alternative is to use a trusted review site, like Capterra, G2, or Software Advice, and find the best option for you.

Make a shortlist of choices, go to their websites, look at the features, and see which ones stick out. After you make your choices, reach out and get a demo of the platform.

Some providers have an initial call to find what you’re looking for to tailor the demo to your specific needs. Others might offer a stock platform overview, don’t discount any of them until you see the platform.

If you see a feature or tool that sticks out, request more information or ask for an in-depth demo about that feature. It’s important to have a deep understanding of the platform.

There’s no specific timeline to make your choice, but you need to remember that you have to finish transitioning to the new platform before your existing ERP is sunset. After you make your choice, have stakeholders approve, and sign the contract, the real work begins.

Implementation Creates Best Practices

After you’ve signed the contract, the project team should communicate with the implementation team. This is where your partnership begins. Implementation needs a comprehensive understanding of who, what, where, when, and why of your company’s business.

Knowing this information creates the timeline and plan to implement your new ERP. As a benefit, since your construction ERP is now cloud-based, you don’t have to worry about a massive software rollout to all employees. The project and implementation team can work to ensure the platform is working before it is shared with everyone.

There should be constant communication between the two teams. Implementation will be looking at your existing systems and working on migration strategies to make sure the data is available.

The implementation timeline should have documentation of every step required. This schedules each part of the implementation process so that everyone knows the project status. Documentation can also create new company-wide standards for new product adoption.

Data Migration is a Priority Project

Before choosing your new ERP, you should have performed a data audit. The audit tells you where your data is stored, the format, and its existing quality. Your project team should know how data is mapped in the new ERP and the similarities and differences to the sunset ERP.

Many things can differ from ERP to ERP. The new ERP could support more fields, increased character counts per field, specific customer info, and more. The project team will verify any changes or conversions before the import into the new ERP.

Data best practices change, and your old ERP might have followed a different standard. The new ERP will follow up-to-date data best practices, and your current data will need updates.

Planning the Migration

Your enterprise data could be massive. And migrating is more complex than exporting from one system and importing into another. The implementation team will know the best way to import the data, whether they use third-party software or a partner that can handle your data set.

Trust your new provider because they know their platform and the best way to import your data so that there are no errors.

Once migration is scheduled, get all hands on deck. The project team should be available to work with the implementation team during the migration. After the migration finishes, there will be checks to make sure the import was successful and the data mapped correctly. It might be impossible to verify everything, but the platform should be able to report on missing data.

Migrations are also an excellent time to build change management strategies for employees. Platform differences can be recorded for training so when employees start using the platform, they are aware of immediate differences in their day-to-day work.

The Education Phase

Now it’s time to test your new platform. The implementation team will have customized the platform to your business needs. The project group can check workflows. The project group can also ask department members to test out the platform.

Day-to-day workflows should be familiar to accelerate the transition between the two platforms. Everything in your feature audit should be ready to use. Training for new features will be handled by the implementation or customer success team.

Onboarding Takes Time

You can’t throw employees into the new construction ERP immediately. Employees have to familiarize themselves with new features and tools. They will have to learn how to log in, adopt any new security features, and get a general understanding of the platform. Education also includes change management like how files are saved or learning to use a mobile app. It’s better to consider the rollout of the new ERP as an opportunity to level-set again.

Your new ERP provider should facilitate training for employees, whether at a manager level and above or by providing online training. Don’t expect employees to be experts right away.

It will take time for employees to get comfortable with the new platform, even if the workflows are similar. The first employees to use the new ERP are the ones who manage data daily. You want the new platform to capture this data as soon as possible.

Set Your Expectations

Since you scheduled an overlap between your old ERP and the new cloud-based platform, you need to set the schedule for the final switch. Depending on the overlap of usage, you might have to migrate and merge data one last time.

As more employees adopt the platform, extra customization or adjustments could be required. Best practice training helps minimize errors so partner with the customer success team.

The moment you move the last employee off of your old ERP, it’s time to celebrate. You’ve completed a large milestone and started a new chapter for your company.

Your Construction ERP is a Strategic Long Term Investment

Sunset software isn’t a cause for panic or concern, it’s the best opportunity to jump forward and adopt new and improved technologies. You have the chance to pick the best construction software platform that fits your business instead of adapting to limited functionality and a loss of software support.

Even though vetting and choosing your new platform is a challenge, this investment leads to increased revenue, improvements in operational efficiency, and the ability to scale business strategically.

Success is found through purposeful planning and transparent communications internally and externally. Know what you want, what you need, and what you want to accomplish on the new platform. Be smart during the entire transition and set the foundations for this new era.

Long-term success doesn’t only happen with the platform, it takes a strong partnership with your new provider.

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