Every director or senior manager knows the feeling: you are about to start an important IT project, but something is nagging. Will this project actually hit the goals we have in mind? Or will we drift, after months of hard work and a serious budget, towards a result nobody really wants? Often the problem is not in the execution but at the start of the project, and more specifically in a lack of thorough analysis. Put simply: if you do not know where you stand and where you want to go, you have no steering. A good analysis prevents exactly that.
What is a fit-gap analysis and why does it matter?
The fit-gap analysis is a simple but powerful method for making sure your project team and the rest of the organisation fully understand what is needed to finish a project successfully. In a fit-gap analysis you look at where you stand today (the fit) and where the gaps sit in the processes and systems that need improving (the gap). By mapping this thoroughly, you make sure your project does not waste time and resources solving the wrong problems.
In my years of experience with software implementations and IT projects in mid-sized companies, I have seen that projects without a fit-gap analysis have a far greater chance of going wrong. They overrun on cost, deadlines slip, and the resulting system often turns out not to match what the business actually needs. Those are expensive mistakes you can avoid by investing time up front in a thorough fit-gap analysis. And no, this does not have to take months or cost tens of thousands. A focused, pragmatic approach is usually more than enough to get clear on what you need, without eating your project budget.
The benefits of a fit-gap analysis
What you often see, especially in mid-sized companies, is that time and budget are not always set aside for a proper analysis phase. That comes partly from the idea that “we will work it out as we go”, or that the cost of the analysis does not justify the immediate savings. In reality the opposite is true. A thorough analysis saves money over the longer run by preventing expensive rework and making sure your project is on the right track from the start.
Three crucial benefits of a fit-gap analysis:
- Clarity on the scope of the project: A fit-gap analysis gives you clarity on what exactly has to happen. It helps you understand your existing processes and decide which should be kept and which should be improved or replaced. That stops you being pulled off course by less important matters and keeps everyone in the project team focused on the right goals.
- Involvement across the organisation: During the fit-gap analysis you bring in different departments and employees. That makes people feel heard and creates a shared understanding of what the project is trying to achieve. Involving employees early also makes them far more willing to embrace change once the system is rolled out.
- Preventing surprises during implementation: A fit-gap analysis helps you spot potential problems early. That stops you discovering halfway through the project that something is fundamentally wrong with your plans. By mapping the gaps and risks up front, you can adjust in time instead of letting the project get into trouble.
How do you approach a fit-gap analysis?
A fit-gap analysis does not have to be a time-consuming process, but it does need to be done carefully. Here is my approach, which works well in practice for mid-sized companies:
- Identify your current processes: Start with an overview of your existing processes. That does not mean describing every step in detail, but you do need to be clear on the main elements of how you work today. Think of core processes such as production, logistics, sales and finance.
- Determine what works and what needs to improve: Then go through your processes point by point and establish what works well and what needs improving. This is the moment to involve every department and every employee. They often surface bottlenecks and improvements you would otherwise miss entirely.
- Document your findings in a fit-gap spreadsheet: Rather than producing a thick report, I recommend documenting your findings simply in a spreadsheet. In it you record which wishes and requirements exist, which fit inside the standard process of the intended software, and which need configuration or custom work. That gives you a clear view of the project scope and makes sure you have concrete goals from the start.
- Decide which solutions close the gaps: Once the gaps are clear, you can look at solutions. Does it fit inside the standard software, or is custom work needed? Sometimes it also means changing processes to fit the new system, which is often a better solution than building everything bespoke.
Why you should never skip the analysis phase
Skipping the analysis phase is like setting off on a journey blind, without knowing where you are going or what you need along the way. It looks like it saves time, but it brings far more risk with it.
Every time I have guided a project where the analysis was not done thoroughly, I saw the same patterns: deadlines missed, costs climbing, and a final result that did not meet expectations. Those are the projects that fail, not because the team is not working hard enough, but because the foundation is missing.
Contrary to what some people think, a thorough fit-gap analysis does not cost unnecessary time or money. On the contrary, it stops you wasting time and money later in the project on problems you could have foreseen. It makes your project more agile and lets your team start the implementation with confidence, because they know exactly what they have to do.
Conclusion
A fit-gap analysis is an essential step in any IT project, and particularly in ERP implementations. It gives you the clarity and focus you need to approach the project properly, and it stops you being surprised later by unexpected problems. By taking this analysis seriously, you make sure your project is not only delivered on time and on budget, but actually produces the value you expect.
So if you are starting a large project, take the time for a proper analysis. It is not a step you can skip if you want your project to succeed.
What is the TARGET method?
The fit-gap analysis does not stand alone. It is the A of the TARGET method, an approach developed by Radical Fanatics across more than 80 projects: six essential steps for successful project management, aimed specifically at mid-sized companies. The acronym stands for:
- Top management on board: make sure the leaders of the business take an active part in the project.
- Analysis up front (fit-gap): run a thorough analysis to establish where you stand and what needs improving.
- Risk first: identify the biggest risks and tackle those before the easy parts.
- Geared check-ins: hold regular, short meetings to track progress and surface problems early.
- Expert sessions: bring the right people together to resolve specific challenges quickly.
- Tracking: follow project progress closely so that it stays on course.
The TARGET method offers a pragmatic, structured way to run IT and change projects successfully, particularly at mid-sized companies where resources are tighter than at larger organisations. Want to talk through the analysis of your own project? Get in touch.