In today’s competitive world, organizations need to continuously improve their processes and streamline their operations to reduce costs and increase productivity. Manual systems can be time-consuming and slow down the business processes due to rekey of information into multiple systems. Furthermore, to add to the trouble, there are a lot of inaccuracies as well.
With the increasingly competitive market, it is essential that your company has all the required info to guide you in making the right strategic decisions. When data is spread across various systems and spreadsheets, it becomes increasingly difficult and time-consuming to create reports that are needed to support key decisions.
ERP is one of the most important Business software which requires a proper planning and GAP analysis for a proper and successful ERP implementation. This is the step which cannot be skipped as this might result in unwanted results and failures.
What is a Gap Analysis in ERP? In short, it’s the process of evaluating your ERP system to make sure it’s aligned with your business needs.
In this article, let’s examine how you can use a gap analysis to analyze your existing system or the system you are about to implement.
What do we mean by Gap Analysis?

A gap analysis is the process of reviewing your current state and determining what you need to do to move into your future state. In an ERP implementation, this means taking a close look at the software you are using or plan to use.
During this process, you will ask questions like what needs to be added to or changed in our ERP solution to help it fully meet our ongoing business needs.
Implementing software and hoping it works for years to come is wishful thinking. Regular improvements are required to keep your system aligned with your business. Not only will this reveal potential technical issues or shortcomings, but it gives you the opportunity to reengineer business processes to stay productive, profitable, and competitive.
Gap analysis is done to know the business processes and working which help to implement ERP system as per the requirement. After gap analysis is done then only a company can able to find out the best and the easiest way to make changes in the practices or existing Business processes to improve the day to day business activities.
In short, is can be said that gap analysis is just a comparison between the current business processes and future improved business processes.
Some of the common issues in ERP Gap Analysis that companies normally need to look into are:
Streamlining day to day operations so as to improve productivity and profitability
Recognize the need for collaborating with business partners
Generate more insights for decision making
Meeting regulatory requirements
Adapting and scaling the business
What are the steps to perform an ERP Gap Analysis?

Step1 – Review your current workflows
Before you can reach your future state, you must understand your current state.
We recommend beginning a gap analysis by evaluating your current workflows. To do so, you should identify all the processes within and between each department. Then, note how each department interfaces with your current ERP software in the daily tasks they perform.
While it’s easy to assume everything is working as it should, this exercise often reveals pain points and workarounds that are impeding your company’s progress.
Step 2 – Define objectives
Once you have gathered the details on your current state, it’s time to define your top business objectives. These objectives might be sales-related, service-centric, or growth-based. Often, they relate to data visibility.
Note that these will likely differ from the goals you set when you first selected the ERP system, and that’s absolutely fine. In fact, it’s to be expected.
Step 3 – Plan your next steps
This is where you will identify the missing pieces and determine your plan of action. You might choose to optimize your system or supplement it with point solutions.
Before doing so, ask yourself what capabilities would help you achieve your goals and derive continuous business value from your IT investments. It’s easy to get carried away with unnecessary change requests, so it’s important to have strong change control in place to ensure your implementation stays on-time and on-budget.
The gap analysis will give a complete overview of the system. It will inform the organization or business, how much value the ERP system will precisely bring into the various business processes. Even still, by completing the gap analysis, upper officials within the organization can determine the most viable solutions to the company’s needs. Considering the costs involved with putting together an ERP system, running a gap analysis prior to doing so is well worth both the time and energy involved.
What are the Gaps you may need to address?

The three-step process above can help you understand the areas in which your ERP software could be improved or enhanced to propel your business forward.
However, it can be difficult to identify these gaps from the inside. When you work closely with a system, its shortcomings often elude you.
That’s why we have outlined some common gaps to get you started:
- Key Features or Functions Missing
Your business needs have evolved since your initial ERP selection. Now, there might be important features and functions you need that weren’t in your original requirements.
Take customer service, for instance. If you originally focused on sales and marketing functions, you might have skimmed over service-related functions. Now, you’re left with lackluster tools unable to help your team track:
- Client complaints
- Warranty claims
- Service issues
Most organizations have at least one functional gap even if they conducted thorough software requirements gathering sessions.
- Areas of Redundancy
At its core, an ERP system is meant to automate, streamline, and simplify your workflows. However, if your employees are required to enter the same data into the same fields multiple times, then you may need to go back to the drawing board.
In many cases, you may need to consider adjustments or integrations to ensure the seamless flow of data among your various systems.
- Lack of Flexibility
If your ERP system isn’t agile enough to keep up with evolving business needs, it could be holding you back. This will especially be true if your organization undergoes a significant shift, such as a global expansion or operational restructuring.
This also applies to more nuanced, granular adjustments.
For example, say you combine two positions from your accounting team into one position. Internally, your employees should be able to adapt to the new workflows and changes to their roles. However, your ERP system may not be designed to take advantage of this organizational efficiency.
Some systems are too rigid and won’t allow you to adjust workflows or change role-based tasks as required. Built-in flexibility is a feature to prioritize if you decide to reconsider your software selection decisions.
- Lack of Preventive Maintenance
Does your ERP system include preventative maintenance? If not, you not only risk experiencing downtime, but you are more vulnerable to data breaches.
In your gap analysis, you can determine if your vendor has included preventative maintenance as part of your plan. If not, then it’s time to add it.
Conversely, you may find that you have a maintenance plan, but you aren’t making use of it. In that case, speak to your ERP vendor to schedule regular preventative services at a convenient time that will minimize downtime.
Are you looking to understand the gaps in your ERP Implementation?

Modern day companies face adverse competition due to rapid market shifts. In the midst of new technological innovations, the adoption of an ERP system is a big step for the growth of a company and its productivity as well.
Gap analysis remains an indispensable part of this entire process and companies should focus on it more and give the importance that it deserves. The value adds by giving you a detailed retrospective of your business processes and the current systems are much more than the costs involved in the same.
Gap analysis in ERP implementation is to identify and suggest the ways to bridge the gap between ‘As is’ and ‘To be’. When any enterprise decides to implement ERP it means its data will be integrated under one platform and this will also bring some radical changes in the present system.
Gap analysis suggests the changes and steps to bring in these changes, so that ERP benefits are received in full. In absence of gap analysis in ERP implementation even the best ERP will not be able to deliver the benefits it claims to give to its users.
A gap analysis is the best way to maximize ERP business benefits. This process can reveal inadequacies and inefficiencies that you may have overlooked during the selection process.
Whether you are still in the implementation phase or have already gone live, we can help you optimize your investment to ensure long-term ROI.
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