ERP Gap-Fit Analysis
What is an ERP Gap-Fit Analysis?
Whenever a business enterprise has to implement any ERP software, it must find out how suitable the software is so that the necessary customisations or changes could be made. The ultimate goal is to ensure that the ERP software and business requirements are in perfect alignment. The process of finding this out is called ERP Gap-Fit Analysis. The objective of this study is to identify and map the fitment and gaps between a selected ERP’s features and functionalities and the business requirements it will need to meet.
In simple words, a fit-gap analysis is done to build the bridge between what is and what needs to be. For example, if a business enterprise wants to implement an ERP solution for its recruitment process, this gap-fit analysis would typically include:
- Mapping the existing recruitment process as it is (As-Is Process)
- Making the necessary changes in the process definition (e.g. automation of preliminary resume screening)
- Re-defining the new process (To-Be Process) (inclusive of all the desired changes)
- Comparing this new process with the ERP working framework and capabilities (e.g. one of the required capabilities is the ability to auto-execute the preliminary resume screening)
- Identifying the differences between the process definition and ERP (e.g. selected ERP solution currently does not have the capability to identify PhD)
- Developing solutions and suggestions for software customisations to align with the process requirements
- Pilot run of the ERP, measure success at defined parameters, provide feedback (if any)
- Full-scale or phase-wise ERP implementation depending on the size and scale of the company.
Essentially, in a fit-gap analysis ERP implementation, a detailed and systematic assessment is made of the ERP software in consideration. If the ERP fit-gap analysis is not done then it amounts to indulging in hopeful thinking without preparing the stage. Once everything rolls out, going back never is a prudent choice when things could have been planned. An ERP fit-gap analysis is also an opportunity to reassess the strength of the existing processes vis-à-vis the business and process requirements that may have changed over time.
Challenges in ERP Gap-Fit Analysis
Undefined Operations Framework
When a business is run under an undefined working environment, it becomes difficult to precisely tell what is going on with each business process and the operations involved in it. This emerges as one of the foremost challenges in the adoption of ERP. Without a precise understanding and mapping of the existing business processes or operational framework, the features and functionalities required in an ERP solution cannot be identified. For example, if the job descriptions are not defined and hiring takes place on the free judgement of the recruiting authorities, the software cannot be aligned to meet the strategic hiring requirements. Software platforms need specific inputs to be able to deliver the desired output.
Gathering information on existing Processes and Practices
In situations where processes are not well-defined or there is a need to revisit the processes to enhance their effectiveness and efficiencies, organisations need data and information from multiple sources. These inputs must come in the desired format and cannot be subjective. For example, a sales manager has to be precise in answering how many years of prior experience are necessary for the position of a sales executive in the organisation. These inputs are used in redefining jobs, processes and ERP customisation. The entire exercise of collecting information on existing processes and practices becomes a separate, time-consuming task for involved stakeholders.
Involvement of External Value Chain Partners
Because business processes involve other value chain partners, the latter plays a role in improving the processes and operations of an organisation. Their inputs are vital to make the necessary process adjustments and ERP customisation. But why should other entities be interested in the ERP implementation project of another organisation even if they are value chain partners? Sometimes it is difficult to gather internal support let alone speak of contribution from the outside. Among other things, the involvement of senior leaders is crucial here.
Lack of specific Expertise and Experience
Before beginning to work on gap-fit analysis, one must have a clear sight of the outcome. The outcome of this analysis must serve what it was carried out for. There is an element of reverse engineering involved. It requires strategies and planning. For example, why should an external value chain associate be interested in taking part in surveys? How much will it cost the business in carrying out the ERP gap-fit analysis? How to tag the support of software vendors in this process? ERP implementation is not something that a business enterprise carries out frequently. So, hiccups cannot be ruled out.
Trained and Dedicated Team
ERP implementation is a matter of both technical and business expertise. A qualified, trained and dedicated team is required to carry out ERP gap-fit analysis. When the team is formed internally, it affects their routine share of duties and responsibilities. It comes as an additional burden on them. Besides, they have to be also trained to suit the unique project requirements. At least one of the top executives must be attached to ERP implementation projects.
How BPX can help
BPX is a management consulting firm specialising in delivering an extensive range of business process solutions. Every solution that we conceptualise and implement goes through a planned and demonstrated framework refined over the years. The fundamentals involved in ERP implementation projects are not new to us. They constitute a characteristic element of our design mechanism. Here is the outline of how our team of expert business process consultants carry out ERP gap-fit analysis.
Revisiting Process Objectives
Knowing the process outcomes is not sufficient. These outcomes must also be established in clear and unambiguous languages. This is what our experts do here. They use questionnaires and conduct elaborate discussions with clients or their representatives to comprehend and define the desired process results. An important part of this step is understanding what clients want to achieve with the ERP solution under consideration. BPX’s ERP implementation consultants help decode the process-IT requirements.
Assessment of the As-Is Processes and the Existing Business Practices
The next step we carry out is a detailed assessment of the as-is processes and the existing business practices. Here, we try to seek answers to some pertinent questions like
- Are there any SOPs in place?
- How the process under consideration is currently executed?
- What software and automation tools are used in process execution?
- Who carries out the process i.e. the process owners?
- What operational standards are maintained for and throughout the process?
Process Improvisation
In this analysis, we assess the existing business processes and practices in light of the reviewed business requirements. The objective is to identify the deviations between how the processes are currently executed and redefine the best ways to reach the process objectives derived earlier.
Defining the To-Be Processes
After identifying the scope of process improvisation, our experts identify and define the new process workflows accompanied by the new operational standards. At this stage, applying some of the principles and practices of business process re-engineering may become necessary. In defining the to-be processes, it is critical to have a clear understanding of the ERP platform under consideration.
Process-ERP Match
Process requirements must also be capable of being aligned with the software’s features and capabilities. In this stage, the new process requirements are matched with the ERP’s features and functionalities as it currently exists. The objective of doing this is to find out how the ERP could fulfil the process requirements and identify the areas where it is not effective. The analytical output of this stage constitutes the input for the next stage.
ERP Customisations and Process Adjustments
Once we have the Process-ERP match, we also have the areas where change or customisations is required. A majority of the time, customisations are made in the software but there could be rare instances where processes might have to be adjusted without altering its contour in any major ways. If required, our team also deals with the software vendors in this customisation and alignment process.