Don’t Start an ERP Migration Without a Supplier Data Strategy

ERP migrations are milestone projects for large enterprises—opportunities to modernize infrastructure, consolidate fragmented systems, and unlock smarter decision-making. Whether moving to an ERP, or integrating procurement suites, the goal is typically the same: drive agility, visibility, and value.

Yet one critical dependency is often overlooked: the quality and structure of supplier data.

If supplier records are inconsistent, fragmented, or duplicative, they can quietly derail even the most well-managed ERP rollout. These issues multiply, compromising downstream workflows, reporting accuracy, and long-term ROI.

The Hidden Problem with Supplier Data

Supplier data is usually distributed across procurement, finance, AP, and compliance systems, each with its own formats, naming conventions, and validation rules. This fragmentation creates records that are inconsistent, incomplete, and often duplicated. And during an ERP migration, these issues rarely surface until it’s too late.

Common data issues include:

• Multiple records for the same supplier (e.g., “ACME Inc.” vs. “Acme Corporation”)
  
• Missing tax IDs, business classifications, or up-to-date addresses
  
• Suppliers not linked to parent organizations or subsidiaries
  
• Inactive or orphaned vendors still present in the system
  

When these issues carry into a new ERP or S2P environment, they can quietly erode everything from sourcing efficiency to risk oversight.

1. Migrating Without Cleanup Just Replicates the Problem

One of the most common mistakes in ERP projects is treating data migration as a technical lift-and-shift. But if you move bad data from your legacy system into a new ERP, you’re not solving problems, you’re preserving them in a new format.

Duplicated suppliers distort vendor counts and sourcing leverage. Incomplete data fields delay approvals. And limited corporate hierarchies make it nearly impossible to manage spend or supplier risk at scale.

Clean, connected supplier data ensures the new system functions as intended without introducing friction from day one.

2. Poor Quality Data Slows Down Your Migration Project

ERP migrations are complex and time-sensitive. They’re also expensive, with costs reaching up to $500 million for large organizations.¹ These projects often span several years and significantly influence the business operating model for the subsequent decade. If your vendor master is messy, data harmonization will become a major bottleneck. Teams will spend hours reconciling inconsistencies, resolving duplicates, and aligning supplier records across business units.

This impacts:

• Integration mapping: Field mismatches across systems delay development
  
• User testing: Incomplete data yields false negatives in testing
  
• Change management: Teams lose confidence in the new system if suppliers are hard to find or inconsistently displayed

Fixing supplier data mid-migration often means delaying go-live—or worse, launching with known defects.

3. You Miss Strategic Opportunities to Consolidate and Save

ERP migrations are inflection points. They offer a rare opportunity to step back, clean house, and re-align procurement strategies. But to do that, you need clear, accurate supplier data.

If suppliers are misnamed, duplicated, or unmapped, you can’t:

• Identify vendor consolidation opportunities
  
• Accurately assess spend across subsidiaries
  
• Optimize terms or pricing through unified supplier engagement
  

Structured hierarchies and enriched attributes are key to unlocking sourcing efficiency and long-term cost savings.

4. Risk and Compliance Exposure Increases

Bad supplier data is not just inefficient, it’s risky. In regulated industries or regions, compliance depends on clean, verified vendor records. That includes tracking:

• Sanctions or restricted party lists
  
• Diversity status,tax IDs and business registrations
  
• Legal business registrations by country
  

The migration phase is the ideal time to establish trust in your supplier records—before systems go live.

5. Bad Data Undermines Automation and BI Initiatives

Modern ERP platforms promise smarter procurement through automation and insight generation. But when supplier records are inconsistent, AI-driven features fall flat.

Issues like misclassified vendors, unmapped hierarchies, or missing fields can hinder:

• Spend visibility dashboards

• Workflow automation (e.g., in Ariba Buying or Coupa SIM)

• Predictive sourcing and risk modeling

Reliable supplier data is what powers intelligent workflows, not just clean screens.

How to Prepare Supplier Data for ERP Success

A structured, step-by-step approach to supplier data preparation ensures your ERP migration stays on track and delivers lasting value:

Audit and baseline: Inventory your vendor master. Quantify duplicates, missing fields, and fragmentation across systems.

Standardize formats: Normalize names, IDs, suffixes, and abbreviations across geographies and platforms.

Resolve legal entities: Ensure each supplier record maps to the correct legal business entity so you’re not duplicating records or engaging the same supplier under different identities.

Enrich key attributes: Fill in missing data fields such as industry classification, business type, diversity certifications, geography, and web presence to support segmentation, compliance, and sourcing.

Map corporate hierarchies: Connect subsidiaries, brands, and related business units to their parent organizations to enable spend roll-ups, supplier risk visibility, and strategic sourcing opportunities.

Establish governance: Set up recurring reviews, embed validation into upstream and downstream workflows, and automate updates through APIs or scheduled data refreshes.

Your ERP Migration Is a Strategic Reset

ERP transformations are infrequent and expensive. Most organizations don’t get a second shot for years. That’s why data preparation, especially around suppliers, is a foundational step, not an afterthought.

By taking a supplier-first approach, you:

• Avoid rework and delays
• Improve adoption and user trust
• Enable better sourcing, risk, and compliance outcomes
• Create a data foundation that scales with the business
• Make supplier data readiness part of your ERP strategy—not a problem you inherit.

In short, don’t let bad supplier data sneak past your ERP transformation. Clean it now, before it becomes embedded in your future.

Sources

^{1“The ERP platform play: Cheaper, faster, better.” McKinsey Digital, 2023.}