What is the Necessity for ERP Gap Analysis and how is it done?

Why Gap Analysis?

Gap analysis is an important step in ERP implementation. ERP is meant to integrate the data of all the departments in a company under one common platform. This calls for a radical change in the system of the company's functioning. The organization can either drop the idea of implementing ERP or choose to go by it. Such a decision can be arrived only by comparing with parameters like the reaction of their customers. The organization can go ahead with ERP by modifying the software to suit their needs but as earlier discussed it leads to other complications and dilutes the working of erp.If the company decides not to go about in searching for another alternative arrangement. On the other hand if the company wants to go for ERP it will stick on to ways and means for implementing ERP. In order to help the company arrive at a proper decision in such unwary circumstances GAP analysis is advocated and followed. Gap analysis basically identifies analyses and as well suggests a sequence of steps to be followed after taking into account "What ought to be "and "what actually exists". It provides to overcome /bridge the gap. Above all it is aimed at improving the commercial viability. The process is aimed at facilitating ERP function so that the benefit of ERP is received in full.

Steps in a Gap Analysis

• The primary step will be to make a note of the existing business system and list out the flaws and positive aspects. This is an attempt to have an idea of what is currently happening given the scenario in question so as to help in ERP implementation.
• Evaluate and decide the additions that need to be made to the business in view of ERP implementation. The aim is to make sure that there is not even a thin line of difference between ERP and the organizations commercial activities. It will be oriented to ERP function.
• Rating the existing level of performance to set a benchmark or standards for the business as on date. This will help in finding out the benefit of ERP.
• Having an in-depth study of the regulations and statements in the organizations and suggesting modifications. This also will decide ERP implementation.
• Clearly defining the roles of individuals in the organization so that the priorities are met and the structure remains undisturbed. This is to make things clear for ERP function.
• Checking if the objective in discharging duties are met because it is the ultimate solution to any issue. If they are not met the gaps should be made known and corrected. Only then the organization can achieve the benefit of ERP.
• Ensuring that functions are executed properly and if need be personnel can be rewarded to boost up and encourage performance.
• Similarly comparisons are to be made for every other factor that draws relation in one way or other. These results are to be complied for ERP gap analysis.
• The gap analysis takes into account all the factors of study and gives the results. It either recommends the implementation of an ERP system or rejects the idea in totality.

This whole process takes about 90-120 days depending on the complexities and technicalities involved. Gap analysis requires the proper understanding of the firm and the ERP product in question. The analysis should fully focus on how the business process and software can be mutually beneficial to one another. GAP analysis becomes instrumental in deciding ERP implementation, so as Business Process Reengineering.

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