WHAT IS GAP ANALYSIS?

GAP analysis is a powerful tool to measure the gap between the automation project goal and its anticipated results. It shows where you are, calls out where you want to be and then bridges the gap between these two. GAP analysis is conducted by assigning certain scores to the respective vendors. These scores would also help the C-suite to evaluate and finalize the vendor.

For example, the GAP score of vendor A is 80, and the GAP score of vendor B is 55. Due to more GAP between vendor B and the project?s anticipated†results, B would not be selected. With a higher score, vendor A would be† selected for the automation project.

GAP analysis is conducted to make it easier for the C-suite to make a decision on which vendor would be selected for the automation project. GAP analysis provides a clear view of which vendor is the best for the project.

STEPS TO CONDUCT GAP ANALYSIS

a) Form a Committee for Evaluation Establish a committee of stakeholders comprising representatives from internal teams such as IT, Sales, Credit & Collections. The motive behind the formation of this committee is to ensure that there are subject-matter experts evaluating the solutions & matching their requirements phase-by-phase. This committee would be in charge of forming a scoring model to conduct GAP analysis. b) Assign a Score to Each RFP Question Assign a weightage score to each parameter in the RFP. The stakeholder committee should determine the priority levels such as high, medium and low, and according to that, weightages should be assigned. For instance, for high priority, the weightage score could be 3 points, for medium priority, it could be 2, for low priority, a weightage of 1point could be assigned. Also, prioritise the individual sections or chapters in the RFP based on the organizational preferences so as to help deciding between vendors with close scores . For instance, IT support might be a big challenge for some companies which might result in them picking a vendor who scores better on IT support even though his GAP scores are similar to another. The below-mentioned example shows the rationale behind the priority assignment. Payment Capture c) Calculate GAP Scores Calculate the GAP scores of the shortlisted set of vendors and present this report to the C-suite. The next step is to compare the vendor scores, and if the senior management feels that there is a need to deep dive into certain feature provided by the vendor, a request should be made for a product demo.

A SAMPLE GAP SCORING MODEL IS GIVEN BELOW:

Payment Capture Remittance Capture Invoice Capture & Matching Exception Handling Capturing Customer Claims Cash Posting Against Open A/R IT Infrastructure Requirements Miscellaneous: d) Select the Vendor With factors such as Implementation Time, Average Rate of Return (ARR), it becomes easier for the C-suite to decide. However, after calculating the final GAP scores, it is necessary to consider a few other parameters to make sure that the right vendor is selected. These parameters are described below: How the vendor?s cost structure looks like: It is important to consider the initial setup fees, monthly subscription fees, additional setup/customization charges while selecting the vendor. A detailed flow of pricing would make it easier to arrive at a conclusion. What deliverables are provided by the vendor: During the RFP process, the vendor has already enlisted their list of deliverables such as blueprints, customer support, ticketing system, project timelines. It is necessary to analyse the validity of the deliverables & request for customer testimonials if necessary. If GAP scores of two or more vendors are equal: If the GAP scores of vendor A and vendor B would have been similar, then the next step would be checking how A and B performed in these high-priority sections such as IT Infrastructure Requirements, Payment Capture, Remittance Capture. How the selected vendor is performing in high-priority sections Even after the final calculation, it is important to cross-check the evaluation. For instance, vendor A has secured 66, however, is it performing the best in all the high-priority sections? If it is not, then the committee should investigate the reasons behind it, & then arrive at a conclusion.

WHAT IS THE NEXT STEP?

After the GAP analysis & vendor selection, it is important to build a business case and present it to the C-suite. This business case would help the senior executives to get an overview of the planned automation project along with the vendor?s contribution to it. While building the business case, it is important to highlight the Savings & Average Rate of Return(ARR) as the C-suite is always eager to know what profit their investments would bear in near future.

Executives have shared their insights on what parameters should a Business Case contain. We will be covering some of those in our next eBook.