A strategic planning tool to help you understand where you are now, where you want to be, and how to get there.
As a part of almost all the spec and select projects we work on, we will carry out a gap analysis of your business. A gap analysis is carried out to determine the scope and scale of re-engineering opportunities within a company. The results usually fall under one of three areas:
- Those that we can address immediately
- Those that would require some effort but are still within the scope of existing systems
- Some outcomes would necessitate more extensive changes. In the case of ERP, the selection and implementation, of a more appropriate business solution.
To sum it up, we want to find out and demonstrate to you where your business is now and as a consequence of that result, figure out where you want it to be? We often get caught up in the now and fail to think about or plan for the future. What is working for us today might not work next month or next year. You claim to know your business inside and out, but do you?
Gradient Gap Analysis
At Gradient, we choose to perform a gap analysis to design the roadmap to get you from where you are now to where you want to be. We will consider current and available functionality documenting our findings as we go. Once we have identified the gaps, we analyse and determine how we will address them and also what opportunities have arisen. Typically, our approach to this phase of a project comprises of four key stages:
- One – understanding what the business is trying to achieve. What is its strategy, its customer and supplier needs and demands of the markets in which it operates?
- Two – understanding the business needs to deliver the processes and information required to achieve the strategy.
- Three – understanding the as-is in terms of the current business processes, the existing system functionality and the current data provision.
- Four – identifying opportunities to enable the business to operate more systematically and consistently, improving effectiveness and efficiency, given the capabilities of current ERP’s.
On completion of this information gathering, the findings will be reviewed and analysed, before being documented into a report to demonstrate the scope and scale of any re-engineering opportunities. The focus is on the delivery of an opportunities analysis document to outline the current challenges and unrealised opportunities within the business. Delivery will involve determining, documenting and confirming of the differences between a business’s desired performance and its current capabilities. This will provide a foundation for measuring the investment required to achieve the desired outcome.
Why is it important to do a gap analysis?
The clue is in the name. A gap analysis is a process which analyses business processes with aims to identify the gaps for improvement in your organisation. Every business is different, and so there is no standard with a gap analysis. However, there are common issues that a gap analysis will identify. If you have considered ERP but your not convinced it’s right for you just yet, we would recommend periodically running a gap analysis procedure. Look out for the following avenues to improve:
- Streamline daily tasks, creating a consistent workflow
- Opportunities to enhance business growth
- Increase productivity
- Provide accurate business insights to aid high-level business decisions
- Ensure you are compliant
If your business runs on a mixture of modern and legacy systems, then there will come a time when your setup will no longer be fit for purpose. Your business will cease to improve and expand. Instead, there will be gaps in all areas affecting things like productivity, growth and profits. Carrying out a gap analysis will give you more of a chance to prevent issues spiralling out of control. This eventuality will only happen if you choose to ignore what you have discovered.
What benefits do you get from using gap analysis?
You can apply gap analysis to several situations at any time. The only agreed criteria are when a process is not performing to its full potential. Most businesses use this strategy when choosing to implement new software, such as an ERP system. However, we underestimate the versatility in a gap analysis in that we can use it any time there is a process not working. It doesn’t only apply to a business setting.
Without even realising it, I guarantee that you have performed a gap analysis of a situation or process in the past. You would have asked all the right questions and come out with a similar answer to if you had of followed the framework for a gap analysis. However, there is a difference. Following a structure ensures consistency to your findings, yes, the outcome will vary, but if you trust in and follow the steps, you can guarantee a reliable outcome.
We’ve gone into detail about the reasons for gap analysis. The primary purpose is to identify and fix inefficiency in business processes. Problems in workflows can lead to you becoming less competitive. If you ignore the findings, issues are bound to multiply. Many businesses are performing below their potential because of the misuse of resources. Fixing inefficiencies will give you the ability to grow, become more profitable and maintain or regain your competitive edge.
Bridge the gap
Now you have identified where and why there are gaps, find a way to close the gaps. Don’t do all the hard work and then not follow-through. If this is the first time using the method, then remember there is a first time for everything. What may feel like a damage-control technique to being with, once performed consistently will become second nature.
You can use gap analysis in most departments in your company. The process is a great way to determine where there is room for improvement. It will help you and your employees to want to be more efficient. Don’t forget to consider the cost implications that might come the first time around; this is when you are likely to find the highest number of inefficiencies to fix. If you feel you would benefit from external support, then get in touch with us to discuss your situation in more detail.