The First Step to ERP Success – Identify Gaps Before System Selection

Organizations rely on their ERP system to manage critical business functions, yet hidden inefficiencies often go unnoticed. These challenges can result in wasted time, unnecessary costs, and missed opportunities for growth. Before jumping into system changes or a full-scale ERP replacement, the first step should be to understand your functional and business gaps and how to address them effectively with a Gap Assessment.

What is a Gap Assessment? A Gap Assessment should be a structured evaluation of your existing ERP system and processes. It identifies areas where your current system falls short, highlights ineffectiveness, and uncovers opportunities for improvement. This assessment provides a comprehensive picture of your organization’s inefficiencies before focusing on the areas for software replacement.

Here’s a look at the four critical areas to consider when trying to bridge the gap between where you are to where you need to be:

1. Uncover Inefficiencies
   Even the most robust ERP systems can develop pain points over time. Whether it’s manual workarounds, fragmented processes, or underutilized features, inefficiencies can be experienced and slow down operations. A gap assessment uncovers these issues, providing actionable insights to streamline processes and save time.
2. Focus on Improvements
   The next step would be to evaluate if the existing inefficiencies can be resolved. A common misconception is that outdated or inefficient systems must always be replaced. However, many businesses can achieve significant improvements by optimizing their ERP such as adding new ERP modules, system reconfiguration, improving integration, or user training without having to perform a full system replacement. In instances where the ERP cannot resolve all inefficiencies, and if these are identified to be high priority, then an ERP replacement should be considered.
3. Save Time and Resources
   Addressing inefficiencies early can reduce costly errors, manual work, workarounds, and other time wasters. A gap assessment helps you prioritize fixes and improvements, ensuring your team operates at peak efficiency while minimizing resource waste.
4. Build a Clear Roadmap for Success
   A gap assessment does not just identify problems—it provides a strategic plan. This roadmap outlines areas for improvement, prioritizes actions, and aligns your ERP processes with business goals. Whether you move toward system optimization, process improvements, or an entirely new solution, the assessment ensures you’re making informed decisions.

Here’s an exercise you can do on your own in performing your gap assessment:

List Your Pain Points
Gather input from your team and identify the biggest frustrations or inefficiencies in your current ERP system. These might include manual processes, slow workflows, or reporting limitations.

1. Identify Manual Workarounds
   Document any tasks your team does manually because the system doesn’t support them effectively. This can help you pinpoint where automation or process improvements are needed.
2. Review System Usage
   Are there features or modules in your ERP system that are underused or ignored entirely? Consider whether better training or process adjustments could make these tools more effective.
3. Align with Business Goals
   Identify the gaps between your ERP’s current functionality with your organization’s future goals and objectives.
4. Prioritize Improvements
   Based on the findings above, identify your functional gaps into three categories: low, medium and high, and then determine which ones could have the biggest impact on efficiency, cost savings, and team satisfaction to be considered for system implementation.

At Advisory IS Solutions, we highly recommend performing a gap assessment to provide clarity and actionable outcomes.

If you need our experts to guide you through a Gap Assessment or any other subsequent phases, then please reach out to us.

What’s Next?

Part 2: Navigating System Selection, where we’ll dive into how to evaluate and choose the ERP solution that best fits your organization’s needs.