Wednesday, 5 May 2010

What is the Necessity for ERP Gap Analysis and how is it done? Why Gap Analysis?

Gap analysis is an important step in ERP implementation. ERP is meant to integrate the data of all the departments in a company under one common platform. This calls for a radical change in the system of the company's functioning.
The organization can either drop the idea of implementing ERP or choose to go by it. Such a decision can be arrived only by comparing with parameters like the reaction of their customers. The organization can go ahead with ERP by modifying the software to suit their needs but as earlier discussed it leads to other complications and dilutes the working of erp.If the company decides not to go about in searching for another alternative arrangement. On the other hand if the company wants to go for ERP it will stick on to ways and means for implementing ERP. In order to help the company arrive at a proper decision in such unwary circumstances GAP analysis is advocated and followed. Gap analysis basically identifies analyses and as well suggests a sequence of steps to be followed after taking into account "What ought to be "and "what actually exists". It provides to overcome /bridge the gap. Above all it is aimed at improving the commercial viability. The process is aimed at facilitating ERP function so that the benefit of ERP is received in full.
Steps in a Gap Analysis

* The primary step will be to make a note of the existing business system and list out the flaws and positive aspects. This is an attempt to have an idea of what is currently happening given the scenario in question so as to help in ERP implementation.
* Evaluate and decide the additions that need to be made to the business in view of ERP implementation. The aim is to make sure that there is not even a thin line of difference between ERP and the organizations commercial activities. It will be oriented to ERP function.
* Rating the existing level of performance to set a benchmark or standards for the business as on date. This will help in finding out the benefit of ERP.
* Having an in-depth study of the regulations and statements in the organizations and suggesting modifications. This also will decide ERP implementation.
* Clearly defining the roles of individuals in the organization so that the priorities are met and the structure remains undisturbed. This is to make things clear for ERP function.
* Checking if the objective in discharging duties are met because it is the ultimate solution to any issue. If they are not met the gaps should be made known and corrected. Only then the organization can achieve the benefit of ERP.
* Ensuring that functions are executed properly and if need be personnel can be rewarded to boost up and encourage performance.
* Similarly comparisons are to be made for every other factor that draws relation in one way or other. These results are to be complied for ERP gap analysis.
* The gap analysis takes into account all the factors of study and gives the results. It either recommends the implementation of an ERP system or rejects the idea in totality.

This whole process takes about 90-120 days depending on the complexities and technicalities involved. Gap analysis requires the proper understanding of the firm and the ERP product in question. The analysis should fully focus on how the business process and software can be mutually beneficial to one another. GAP analysis becomes instrumental in deciding ERP implementation, so as Business Process Reengineering.

Significance of ERP Implementation

Companies have to clearly know what enterprise resource is planning before thinking of implementing them. The catch word of ERP implementation is speed.
The faster it is implemented the quicker and better are the advantages and delivery in terms of results. This early process has another hold. The returns are sought at a shorter period. This deviation from the conventional practice has become the order of the day as far as many companies are concerned. Formerly Business process reengineering played a vital role with respect to implementation. It is important to know the components of Enterprise resource planning .Merely defining enterprise resource planning will not help in this.

This naturally paved way to development of gaps between the actual results and the one derived during the process of foreseeing. Tuning ERP as per the whims and fancies of the practices followed in the company became a routine affair. This led to slogging and dragging beyond the time limits permitted. It was monetarily pinching and played havoc in the customer's trust. It is also necessary to understand that mere ERP planning does not guarantee the benefit of erp.It has to be implemented as planned after understanding the components of enterprise resource planning.

In spite of having improved the implementation issues what remains static and unfettered is the manner in which companies go ahead with ERP implementation. They do it for the heck of it and without following systematic procedures. Infact they don't even check the desirability of going into ERP. Some issues that an organization has to address after defining enterprise resource planning are

* Popular information systems
* Likelihood of fluctuations in the choice of technology
* The ability of market players to stay in tune with it
* The ways and means to implement a business applications like ERP
* To benefit from the same so as to gain a competitive edge
* Their usage and services
* The necessity for innovating software applications

If an organization is able to answer these questions without any ambiguity and substantiate the results then it can be said that it has a path or up focus in taking ERP. The questions mentioned above are crucial and will even decide the business model of the company. ERP implementation is a vital in the whole process of ERP. They can take place only if one understands "What is enterprise resource Planning" and defining enterprise resource planning in their organization.
Current Approach
It is essential to have an overview of the current approach. The current approach is claimed to be relatively successful.

The current approach more popularly referred to as "baan" has two underlying principles
The idea which concentrates on molding the business
This category is prominent when the organizational unit calls for a radical restructing process by all means. This process will be carried in all aspects of the business .Some of them include strategic manouvere, operation of trade and the circumstances that call for change and adaptability. Defining enterprise resource planning in context to the concerned organization will help to decide on this issue.
The plan which lays more emphasis on technical parameters.
Here business takes the back seat. The thrust lies on technical dimensions. This does not ignore the commercial viability as such but they occupy seat only in the due course of time more so when operations are triggered in full stream and not at the initial stage itself. The advantage with this type is that it does not call for an immediate modification of the business structure. However it is essential to know the components of enterprise resource planning.
Conclusion
The popularity of ERP as a business application does deserve a special mention. The most crucial factor in the whole system of ERP is the implementation aspect. The implementation phase has the ability to cast the spell on ERP'S fortune. As discussed before the success of an ERP Implementation lies in quicker processes and hence training and the speed at which the quintessence of training is received decides its worth and value. Above all one has to clearly understand "What is Enterprise resource Planning"? and then implement it.

Friday, 30 April 2010

Enterprise resource planning (ERP)

Enterprise resource planning (ERP) is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise wide system environment.