March 9, 2014 2 Comments
I think we can all agree that organizational fit is a key consideration for successful ERP selections and implementations. However, mention the phase “fit/gap” or “gap analysis” and most people will fixate on the ERP software. There are several examples of functional/software fit-gap templates/activities but very few organizational fit-gap templates/guides. The goal of this blog is to shed some light on this very important activity.
What is an Organizational Fit/Gap?
An organizational fit/gap analysis is a comparison of the customer’s existing organizational model that supports the business to the defined organizational model supported (or assumed) by the ERP system. Consider the following illustration:
If you do not know what is changing in the organization then how can you manage organizational change? Too often I see ERP projects only focus on the “To Be” model and expect business users to figure out how to transition. I have also observed that customers see organizational change activities as an opportunity to reduce implementation costs by performing the activity themselves – regardless of their capabilities.
In order to effectively conduct an organizational fit/gap analysis there are two key sources of information that are required:
|Customer’s Organizational Structure and Business Processes||A majority of peers and customers believe that this exercise is a non-value-add activity given the imminent organizational change that will occur as part of the ERP implementation.|
|ERP Business Process Maps||Consider ERP business process maps as a demonstration by the ERP vendor to show how their ERP software supports business processes.|
Just as you perform a formal Fit/Gap analysis on ERP functionality you should also consider performing a formal organization Fit/Gap analysis as illustrated below:
An organizational fit/gap analysis should be performed during the ERP selection stage and refined during the early design stages of the ERP implementation. Do not limit yourself to performing this exercise only once. The analysis performed during an organizational Fit/Gap will drive future decisions and implementation activities.
What Activities should an Organizational Fit/Gap Influence?
The organization fit/gap analysis will have a direct impact on your organization change management plan and communication plan. In addition, this analysis will provide insight into user security requirements. Utilizing this approach will highlight how well the predefined ERP user security profile(s) align to the organization’s existing users. As a general rule, the majority of predefined ERP workflows are based upon predefined user security roles; therefore keep in mind that ERP user security profile changes may require additional testing for related ERP workflows.
Why Do We Need a Formal Organizational Fit/Gap?
Conducting a formal organizational fit/gap enables you to quantify the level of change. Instead of taking a broad stroke at managing change you can provide a focused effort to accomplishing your objective. Remember that people are the most important component of a business solution. Given the importance I believe that formalizing this activity is worth the investment.
Predefined ERP implementation tools, templates, roles can provide limited value to an implementation. Too often the ERP market wrongly perceives that these predefined components result in faster implementations. This misconception is most pronounced in the ERP SaaS/Cloud arena. At the end of the day, an ERP implementation should only move as fast as the customer can handle the change. Conducting a formal organizational fit/gap can enable the customer to adapt faster by focusing on the specific changes required for success.