GAP Analysis in SAP FICO.

Question: What is GAP Analysis in terms of FI/CO? Explain in detail with an example.

Answer: Gap means small cracks. In SAP world or in Information Technology world, gap analysis is the study of the differences between two different information systems or applications (ex; existing system or legacy system with Client and new is SAP), often for the purpose of determining how to get from one state to a new state. A gap is sometimes spoken of as "the space between where we are and where we want to be."

Gap Analysis is undertaken as a means of bridging that space. Actual Gap Analysis is time consuming and it plays vital role in Business Blueprint (AS IS Process) stage. A through Gap Analysis will identify the gaps between how the business operates and its needs against what the package can or can't do. For each gap there will be one of three outcomes which must be recorded and executed,

1. GAP must be closed and customized software can be developed
2. GAP must be closed but software cannot be written therefore a workaround is required
3. GAP does not need to be closed.

A point worth mentioning here is that at time people confuse between user-exits and Gap Analysis. User exits are standard gate ways provided by SAP to exit the standard code and we can write our own code with the help of ABAP workbench, it is not new functionality which we are trying to build in sap but its slight enhancement within the same code.

Gap analysis is start point of Realization and once Business Blueprint is finished we have to find the realization of sap system for client requirement and there will be certain gaps when compared to system fit. Those gaps can be closed either by re-engineering of business process to fit with SAP or we have to use USER exits in case of small deviations or complete enhancements with the help of ABAP to fit with the SAP system.

In short, GAP Analysis for SAP means identifying the gaps between how the business operates in a particular scenario and how SAP software operates in a particular scenario. Gap analysis can be narrowed down to headings like, gaps in master data, gaps in transactional process, gaps in reports, gaps in all RICEF objects.

Some examples of GAP Analysis are:

1.      The point of creation of asset varies in case of a Corporate asset and Other Dept. assets.

In case of corporate asset, the asset creation process would start after the invoicing is done. So the cost would initially be expensed out and after the asset is created, the cost would be transferred to the asset from the expense.
In case of assets other than the above, the asset creation would take place prior to the creation of the Purchase Requisition, since the asset number would flow to the Purchase Order and subsequently to the invoice.

The cost category should be defaulted to corporate if corporate asset is selected on the BA screen. In such a case, Other Dept asset selection will not be allowed on any further lines. The same applies to selection of Other Dept. asset on the BA (Budget Application) screen.
Hence, a Budget Application can be created entirely for a corporate asset or Other Dept. assets.

Cost category field required at the line depending on the nature of the goods/services. Depending upon the cost category field selected, the dropdown in OHC code should be restricted. Whether the fields Cost center, OHC code, Sub OHC, Activity Code and Segment Code are required or optional or not available for entry should depend on the Cost Category.

2.      GL
Key documents reviewed / Event Conducted
     Business Blue Prints
     End User Documentations
     System Configuration
     Minutes of Meetings-BPOs workshop
      
Major Findings
     Redundant GL Accounts exist in Operative and Global Chart of Account
     Business area wise Financial Statement has not been activated
     Closing Activities such as Automatic Clearing, Foreign Currency Valuations for G/L   balances, and Carry forward Balance, are not being carried out.

Accounts Payable / Accounts Receivable: Standardization and Automation for Vendor Payment and Customer Incoming has not been executed properly
     Customer Aging is not available since the accuracy of billing data is not yet established
     Dunning and Customer statement of Account is not being configured and used
     Closing Activities such as Automatic Clearing, Foreign Currency Valuations for Vendor & Customer and Carry forward Balance, are not being carried out

Bank Accounting: Cash Positioning and Liquidity Forecast has not been configured and used at all. SAP Banking Functionality, Manual or Automatic is not being configured and used at all.

Controlling: Redundant and Unused Cost & Profit Centers exist in Operative Hierarchy for Overhead controlling
     Cost element Contains Duplicate and Unexplained Accounts
     Cost Centre Cycle and their assessment to PA need to be reviewed in detail for accuracy and
        synergizing the Cost Allocations

3.      The Gaps can differ from company to company. Most commonly, however, missing functionality is industry-specific.
Examples:
1. MGM Studios and Lycos sometime back worked with SAP to develop its new intellectual property management and media advertising management functionality, respectively.
2. A leading Oral care product company wanted the promotion of free-goods where they wanted 'Buy one get 2 different products free'.