While upgrading a client to Management Reporter (MR) 2012, the database upgrade failed due to a SQL timeout exception. The timeout setting was originally set to a time that could not do all conversions, causing the configuration to fail.
The solution:
1. Find the SQL timeout value setting in the MRConfigurationConsole file. This is in the Management Reporter folder (C:\Program Files\Microsoft Dynamics ERP\Management Reporter\2.1\Server\Console).
2. Change the value to a higher time for the conversion to complete. For us it was changing the 300 to 300000. 
3. Restart the Configuration Console for changes to take effect. Configuration was successful.
