Gap Analysis

A gap analysis is a method of accessing the performance of a business unit to determine whether business requirements or objectives are being met and if not, what steps should be taken to meet them. A gap analysis may also be referred as a need analysis, needs assessment, or need gap analysis. The gap in the gap analysis process refers to the space between “where are we” as a part of the business (the present state) and “where we want to be” (the target state or desired state) and information technology gap analysis reports often are used by project managers and process improvement teams as the starting point for an action plan to produce operational improvement. The gap analysis also helps in benchmarking actual business performance so it can be measured against optima, performance level. Performance can be measured across multiple areas of the business, including customer satisfaction, revenue generation, productivity, and supply chain cost. Small business can benefit from performing gap analysis when they are in process of figuring out how to allocate resource. In software development gap analysis tools can document which services or functions have been accidentally left out which have been deliberately eliminated and which still need to be developed. In compliance initiative, a gap analysis can compare what is required by certain regulations with what currently is being done to abide by them. In HR, normally gap analysis can be done to examine which skills are present in the workforce and what additional skills are needed to improve the organizations competitiveness or efficiency. The first step in conducting gap analysis is to establish specific target objectives by looking at the company missions’ statement, strategic business goal and improvement objectives. The next step is to analyse current processes by collecting relevant data on performance levels how resources are presently allocated for these processes. This data can be collected from a variety source depending on what is being analysed. For example, it may involve looking at documentation, measuring key performance indicators or other success metrics, conducting stake holders’ interview, brainstorming, and observing project activities. After a company compares its target goal against its current state, it can then draw up a comprehensive plan. Such a plan outlines a step-by-step process to fill the gap between its current and future state and to reach its target objectives. This is often referred to as strategic planning while gap analysis methodologies can be either concrete or conceptual, gap analysis templates often having the following fundamental components in common. A gap analysis template starts off with a column that might be labelled: Current state”. It lists the process, workflow, and characteristics an organization seeks to improve using factual and specific terms. Areas of focus can be broad, targeting the entire business or the focus may be narrow, concentrating on a specific business process. The choice depends on the companies target objectives. The analysis of this focus areas can be either quantitative such as looking at the number of customers calls answered with in a certain time period or qualitative such as examining the state of diversity in the workplace. The gap analysis report should also include a column labelled “Future State” which outlines the target conditions the company wants to achieve. Like the current state, these sections can be defined in concrete, quantifiable terms such as aiming to increase the number of fielded customer calls by a certain percentage within a specific time or it may be worked in general terms such as working forward a more inclusive office culture. This column should first identify whether a gap exist between a company’s current and future state. If so, the gap description should outline what constitutes the gap and the root causes that contributes to it. This column lists those reasons in objectives, clear and specific terms. Like the state descriptions, these components can be quantifiable or qualitative. They might cite factors such as the lack of diversity programs or the difference between the numbers of the currently fielded calls and the target number of fielded calls. The final column of a gap analysis report should list all the possible solutions that can be implemented to fill the gap between the current and future states. These objectives must be specific, directly speak to the factors listed in the gap description and be put in active and compelling terms. They should include clear objectives and a time frame for achieving them. Some examples of the next steps include hiring a certain number of additional employees to field customer calls, instituting calls volumes reporting and launching specific office diversity programs and resources. There are variety of gap [ analysis tools and methodologies in the market, and the tool a company uses depends on its target objectives. The following are some gap analysis methods like McKinsey 7 – S Framework is used to determine specific aspects of a company that are meeting expectations. An analyst using a 7-S Model examine the characteristics of a business through the lens of seven people- Centric groupings strategy, structure, system, staff, style, skills, shared values. The analyst fills in the current and future state for each category, which would then highlight where the gaps exist. The company can then implement a targeted solutions to bridge that gap. The four steps of gap analysis are the construction of organizational goals, benchmarking the current state, analysing the gap data, and compiling a gap report. The first step is to accurately outline and define the organizational goals or targets all of which needs to be specific, measurable, attainable, realistic, and timely. In the second step, the historical data is used to measure the current performance of the organization as it relates to its outlined goals. The third step is to analyse the collected data that seeks to understand why the measured performance is below the desired level. The fourth and final step is to compile a report based on the qualitative data collected and the qualitative reasons why the data is below the benchmark. The actions items that are needed to achieve the organizations’ goal are identified in the report.