A Fit Gap Analysis Under The Asap Implementation Methodology
The ASAP implementation methodology is a comprehensive implementation methodology that was introduced in 1997 to replace the much criticized original SAP R/3 Procedural Model. The original SAP R/3 procedural model was criticized for being convoluted, painfully time consuming and very expensive. The ASAP implementation methodology is now the most used implementation methodology although it is currently receiving competition from the agile SAP ERP implementation methodology. The ASAP implementation methodology is divided into five distinct phases with specific activities falling under each phase. A fit gap analysis is one activity that is conducted under the Blueprinting phase of the ASAP implementation roadmap.
What is a Fit Gap Analysis?
The fit gap analysis is a kind of methodology that entails listing down the processes and system functions of an enterprise. These enterprise processes and system functions are then compared and evaluated to find out the matches and mismatches. Matches are popularly referred to as fits while mismatches are referred to as gaps. This gaps and fits are identified after the AS IS and the TO BE documentation is ready.
Purpose of a Fit Gap Analysis
There is a common misconception that a fit gap analysis is designed to provide new system solutions or to help an organization develop new designs. That is far from the truth. A fit gap analysis is intended to globalize the local business processes of an organization, to assess the regulatory requirements affecting an organization and to identify best global practices not included in the initial pilot implementation.
Globalization of Local Business Processes of an Organization
A business process refers to the aggregation of resources from input to output to ensure that the objectives of the organization are achieved. Most organizations design their business processes to address the local issues affecting the organization. The efficiency of these business processes in most cases is far from optimal. The aim of a fit gap analysis during the Blueprinting phase of the ASAP implementation methodology is to adapt these business processes to the industry best practices. The business processes of a pharmaceutical company for example will need to be adjusted to reflect the industry best practices.
Assessing the Regulatory Requirements Affecting the Organization
The fit gap analysis aims at ensuring that the shortfalls in complying with regulatory requirements are met. The business environment is highly dynamic, that much is a well known fact. This puts the regulatory bodies under pressure to introduce new rules and regulations so as to ensure that competing organizations have an even playing field and that the members of the public are not misguided by the organizations. Most of the dynamic laws are the accounting regulations such as the International Financial Reporting Standards which are regularly updated. It is vital therefore for business organizations to comply with new regulations to avoid penalties and in extreme situations, revocation of licenses and payment of hefty fines. A fit gap analysis helps to ensure that there is this compliance.
To Reflect Industry Best Practices
In certain circumstances, organizations have ineffective business processes or conduct business processes inefficiently. It is important for these organizations to get rid of the ineffective business processes and to efficiently conduct vital business processes. This can only be triggered through external benchmarking. Although there are various types of external benchmarking, the best in class benchmarking is the most useful as it reflects the best practices in a particular activity. SAP ERP provides industry specific best practices. A fit gap analysis will therefore go a long way in ensuring that these best practices are appropriately reflected in the SAP ERP environment.
Results of the Fit Gap Analysis Conducted during the ASAP Implementation Methodology
Several gaps are usually identified in the Blueprinting phase of the ASAP implementation methodology. It is important to clearly document the gaps identified during the fit gap analysis. The gaps identified during the Blueprinting phase of the ASAP implementation methodology can be broadly placed into five main groups: operational effectiveness, systems, continuous improvement, infrastructure foundations and information.
Operational Effectiveness Gap or Fit
Operational Effectiveness can prove to be a gap or a fit after the fit gap analysis under the ASAP implementation methodology. In most cases when organizations are seeking to introduce SAP ERP, there is an operational effectiveness gap. This gap addresses technology initiatives relating to overall improvement in the three Es in a business environment- economy, effectiveness and efficiency. A focus on these three Es will ultimately result in an enhancement of business processes.
Systems Gap or Fit
A system gap or fit will depend on the system needs of the different functions or departments in a traditional business organization. Implementation of SAP ERP calls for an introduction of an entirely new system where the traditional business functions will be entirely linked and business processes will cross functional boundaries. Organizations implementing SAP ERP for the first time are therefore bound to have a systems gap.
A Continuous Improvement Gap or Fit
A continuous improvement gap or fit can be identified when a fit gap analysis is conducted in an organization during the ASAP implementation phase of Blueprinting. Continuous improvement relates to adapting the business processes and systems of the organizations to the dynamic business environment and constantly making small incremental improvements to business processes. The continuous improvement rationale is borrowed from the Japanese Kaizen philosophy. An organization that utilizes such as a rationale will have a continuous improvement fit while an organization that does not utilize such a rationale is deemed to have a continuous improvement gap.
Infrastructure Foundations Gap or Fit
An infrastructure foundations gap or fit can be identified after conducting a fit gap analysis in the Blueprinting phase of the ASAP implementation methodology. Factors considered during an infrastructure fit gap analysis include the flexibility of technologies, the resilience of the overall infrastructure, the security of the infrastructure and the performance of the infrastructure.
Information Gap or Fit
Finally, there could be an information gap or fit depending on the fit gap analysis conducted at the Blueprinting phase under the ASAP implementation methodology. For organizations implementing SAP ERP for the first time, there is usually an information gap. This is due to the relatively low accessibility of information for optimal decision making in the traditional systems.