Good stewardship of supplier data is foundational to every Enterprise Resource Planning (ERP) transformation. Selection criteria are the set of rules that determine which records from your legacy ERP solution need to be converted into the new ERP system. Strategizing supplier selection will start your organization on the path to a successful ERP implementation. Keep reading to learn the secrets to robust supplier selection.

1. Balance Competing Methodologies

Competing methodologies will be present throughout your ERP transformation. Comparing the pros and cons of different methodologies is the first step to determining which approach is best for your organization.  

Should selection criteria be wide or narrow?

  • If selection is too wide, unneeded data could find its way to the new system. If selection is too narrow, last-minute manual entries may be needed to close gaps.

Will legacy data cleanup be automated or manual?

  • Manual data cleanup can be time consuming, while automating it could result in an overengineered or hard-to-maintain conversion program.

Should development follow a Waterfall or Agile methodology?

  • A Waterfall approach could be easier to plan than Agile, but Agile could account for a progressively better understanding of the data landscape.

No one-size-fits-all answer exists for the questions above, but asking them early in the project allows you to make informed decisions.

2. Question Legacy Data

Decades-old software solutions do not have the amount of built-in validation that modern solutions have. Activity flags are notoriously inaccurate in legacy systems and suppliers that are flagged as inactive may still appear on open transactions. Restrictive field widths in the legacy system might have led to truncated or abbreviated data, including the supplier name. Evolving business requirements may have led to some legacy fields being repurposed – for example, storing email addresses in a fax field. Profiling and research into the legacy data will help reveal these surprises early and allow time to figure out appropriate workarounds.

3. Consider Historical Data Requirements

Historical data requirements will significantly impact supplier selection. For example, if 2 years of historical Accounts Payable invoices are being converted then it forces all the suppliers associated with those invoices to be converted as active vendors even if they are inactive in the legacy system. This could introduce significant manual work later in the project when those vendors need to be flipped from active to inactive. Additionally, the historical data requirements increase volume and processing time for data conversion, which directly impacts the cutover window.

4. Prioritize Open Transactions

Open Purchase Orders and Open Accounts Payables provide an excellent starting point for supplier selection criteria. By simultaneously considering master data and transaction data selection criteria, you guarantee that your conversion approach is internally consistent. Understanding how these modules interact and are interdependent also encourages the business and developers to build reusable code and to document shared sets of rules in a single place. One more benefit from considering open transactions is that it helps to shake out data exceptions, like orphaned records or old invoices that were incorrectly left open, and these issues can be addressed before moving to your new ERP system.

5. Understand Structural Changes

A firm understanding of the structural changes happening to Supplier data will aid reconciliation and final signoff of the converted data. No modern Supplier conversion results in data that has a one-to-one relationship to the legacy data: legacy solutions are rarely as normalized as modern ones, supplier sites may be used differently, and their corresponding contacts may be populated in a novel manner.  

Even top-level supplier data will not correspond directly across the legacy and target system since value-adding supplier deduplication causes multiple legacy supplier to be merged to a single supplier in the new system. Cross-references of the supplier data, including insights into how legacy records have been merged (as with deduplication) or split apart (as with site or contact information), will be critical to a thorough validation and reconciliation of converted data.

6. Employ a Cross-Functional Approach

In his book Conscious Capitalism, Whole Foods co-founder John Mackey emphasizes the importance of supplier relationships in creating a responsible and successful organization. Extending Mackey’s idea, realize that good supplier relationships start with good data. Supplier data will not reside all in one place – it will be scattered across separate tables, modules, and databases – a cross-functional approach is needed to bring it all together. Avoid gaps in your supplier conversion strategy by identifying and including the right stakeholders starting with the earliest design sessions. At the very least, involve both the Payables team and the Supply Chain team in building a holistic understanding of Supplier data. Depending on your company and industry, additional teams may be needed, such as Lease Accounting, Patient Financial Services, Maintenance, or something else.  Major transformations may even employ multiple technologies and implementation teams – like Oracle Cloud for ERP and Ivalua for procurement. Collaborating across tracks will reveal countless ways to make Supplier data serve your business and your corporate mission better than ever before.