Fit-Gap Analysis: Out of the Box or a Workaround

This is the fifth post of a series discussing how Velosio can assist your company in completing a successful ERP implementation.

If you want to review the other posts in the series or learn more about Enterprise Resource Planning (ERP) implementation and how Velosio can help, look at:

Make Velosio Your ERP Migration and Implementation Partner

Managing the Pre-Sale Process: Ensure Your Requirements Are Clearly Defined

Getting Started: Preparing For an ERP Implementation

Requirements Gathering: Determining What You Need

The road to a successful ERP implementation is based on completing a series of milestone tasks in a specific sequence. At this point in the implementation (fit-gap), the current company environment should have been reviewed, workflows and reporting needs documented and the requirements gathering sessions completed.

Requirements gathering allows the company and consultants to understand ERP functionality needed, functionality importance, and implementation goals. After the requirements have been reviewed and approved, they are matched to ERP “out of the box” (OOB) functionality. This process is called a “fit-gap” analysis. Functionality matches are “fits” and missing functionality are known as “gaps”.

The fit-gap process is where an experienced implementation partner like Velosio can make the difference between success, or a less-than-desirable outcome. Since we’re intimately familiar with all of the ERP applications we represent, we can effectively identify and document functionality gaps, and the associated workarounds.

Most of our team members are experienced accountants. Some hold a CPA license or have earned advanced degrees. This level of accounting experience allows us to suggest and build gap workarounds that will not only provide an effective solution addressing the applicable functionality but also workarounds that support sound accounting principles and internal controls.

ERP implementations are controlled using a specific methodology. Many software publishers provide some type of implementation methodology for use by their re-sellers. A sample implementation methodology appears below. The example consists of five phases. Fit-gap is part of the “Requirements and Design” phase.

An implementation process flow example appears below. The process flow consists of five phases. Fit-gap is part of the Requirements and Design phase.

Note how fit-gap analysis is supported by Requirements Gathering and ties into the High-Level ERP Design

Best Practices

Visible Executive Ownership

Visible executive ownership is the number one success driver across all ERP implementation phases.

Employees look to company executives for both direction and a sense of the importance connected to company initiatives. If the Executive team doesn’t take the project seriously, chances are that the project team won’t either.

To learn more about executive ownership, look at: Preparing for ERP Implementation: Getting Started on the Right Foot.

Ensure That the Fit-Gap Document is Completed in a Quality Manner

Fit-gap analysis uses the requirements document as the basis of determining the fits and gaps. Gaps can require a process workaround, a customization or sometimes a companion software solution.

The fit-gap analysis may not be needed for every requirement. It should, however, be completed for all important processes and functionality.

Make sure the ERP project scope includes providing a formal fit-gap document as a requirement and design phase deliverable. The fit-gap document should include:

• A cross-reference to each captured requirement.
• A general statement of ERP functionality supporting each requirement fit.
• A more detailed statement of any gap workaround, how it resolves the issue, and how it will be tested.
• An estimated number of additional hours required to address each gap workaround.

Velosio project managers and implementation consultants are very experienced in preparing fit-gap analyses in an organized and effective manner. The method of completing fit-gap tasks is reviewed in the kick-off meeting. Any changes to fit-gap document templates should be discussed and resolved at this time. Be sure that all project participants understand fit-gap documentation standards.

Be Sure that Requirements “Fits” Can be Tested and Validated

Just because a requirement is considered as a fit by the consultant, doesn’t always mean it’s appropriate for your company. Sometimes, the fit may involve processing that is not suitable for the actual task at hand.

For example, a company may have a transaction or process that occurs many times each day and is currently completed via a single step. The requirement is determined as a fit by the project team.

However, the fit functionality involves 2 steps to achieve the same result. So, while the functionality may be a non-issue for an infrequent transaction or process, it is not suitable for high-volume processing and in this case, would not be satisfactory and is actually a gap.

Fits need to be tested and evaluated. To shorten the user acceptance testing (UAT) process, test and evaluate fits before UAT if possible.

Be Sure that Gap Work-around Strategies are Clearly Defined

Just like requirement fits, gaps must be clearly defined and carefully reviewed. Gap statements should include a fair amount of detail. While gap workarounds don’t need to be completely designed at this point, they do need to be explained enough to support the decision to move forward.

Gap work-around strategies can be as simple as implementing a basic process change, adding a new field, or as complicated as a customization or purchased solution. Review gap workaround strategies with the implementation consultant, and as always, question anything important and assume nothing.

Use Velosio’s experience to help guide you in the right direction. For example, if customization is decided on as the gap workaround, we have a formidable team of system developers who will get the job done using time-tested methods and strong quality control standards.

If a purchased solution is needed, we’re very familiar with all of the solutions we sell, and confident that when needed, we can suggest the appropriate solution.

On a side note, be sure to keep gap workaround goals consistent with their true value. For example, some companies make extensive modifications just to keep legacy processes in place before really understanding how the new system works.

Unless the issue is critical, out-of-the-box functionality should be used for at least 6 months before considering major modifications. Once system users become familiar with the ERP, modifications are usually requested with much less frequency.

Velosio has been successfully implementing ERPs for a long time. Include our project managers in gap discussions. They can be remarkably effective in preventing your company from “biting off more than it can chew”.

Understand the Costs of Gap Workarounds

Unless quite simple, gap workaround strategies are usually considered as out-of-scope activities and may result in a project change order which often results in additional dollars. Be sure that the ERP consultant, or project manager, provides a cost estimate for any out-of-scope workarounds proposed. They should be able to provide a high-level cost estimate as a fit-gap review deliverable.

Velosio’s implementation methodology includes a strong project change order process. Project change management is reviewed, and the change management process agreed upon in the kick-off meeting.

Be Sure Work Around Strategies are Designed and Reviewed Prior to Signing Additional Work orders

Once the Gap workarounds have been reviewed and prioritized, cost estimates and project change orders can be finalized.

All Gap workarounds should be supported with a design document. The design document differs according to complexity. Simple workarounds (e.g., field name changes etc.) can be supported with a general description of the change required. More detailed workarounds such as customizations, are supported by an initial general design document. Once approved, a more detailed design document should be prepared. Review the detailed design carefully ensuring that it effectively addresses the gap.

At Velosio, both summary and detailed design documentation are deliverables of our customization development process. A carefully built design includes expected functionality, workflows, reporting, error handling processes, testing and installation back-out plans.

Finally, the design document should include a detailed cost estimate (direct costs). Don’t forget to add ongoing costs and indirect costs, as they won’t be included in the estimate. Compare the total cost against the expected value to understand the return on your investment.

So Why Velosio?

With many years of implementation experience, Velosio can get your software up and running—effectively and efficiently—as quickly as possible. Our application consultants and project managers, who are among the best in their field, are ready to help your business keep its commitments while investing in the latest technology advances.

Velosio is a team of 450 business professionals, application consultants, developers and industry experts aligned with our clients’ best interests and dedicated to ensuring exceptional outcomes. Our team has worked with clients of all sizes over thousands of projects, allowing us to document your ERP requirements, proactively spot potential functionality gaps and issues, suggest best practices and offer superior development services when required.

With a considerable number of successful implementations under our belt, you can be confident that we have the tools and experience you are looking for. Reach out to our experts today.