Gap analysis is the technique used to define the difference between the current state and the proposed state of any business and its functionalities. This technique comes under Enterprise Analysis, knowledge area of business analysts. The technique revolves around two basic questions:
- Where are we?
- Where do we want to be?
Under the first question, the present situation of the business is explained. It consists of the current factors like business attributes, competencies of the people involved in the business, performance factors etc. And the second question explains the future of these current factors. The delta between these two is known as gap and the technique which is used to fill this gap is known as Gap Analysis. It can also be defined as the process to identify the delta between the proposed and existing functionalities in any application. A gap analysis helps bridging that delta by highlighting which requirements are being met and which are not.
There is no formal method to conduct gap analysis and it can be performed in different perspectives like organization structure (HR processes), business processes, information technology etc. Gap analysis provides a foundation for measuring investment of time, money and human resources required to achieve a partial outcome.
In IT industry, Business Analysts or Project Managers have been given this task of performing gap analysis to identify the variation in the future processes or techniques and comparing it with the current ones. As I mentioned above there is no formal way to conduct this analysis, thus an excel-sheet can be used to draw tables with the details of the current and future processes and the delta found, if any. The same template can be embellished in different ways and many organizations have their set template for this process. The important points to be noted before performing any Gap-analysis can be listed as below:
- The current followed processes should be well-known.
- All the current business affecting factors should be well defined. No matter how simple the process is, but it should be well-drafted and described.
- There should be no ambiguity in the future goal and objectives. All the future plans, goals, attributes, objectives and processes should be described and the initial draft of the same should be approved by the business owners. (I have mentioned initial draft because after gap-analysis, there may be a chance that the process would get changed)
- Identify the possible gaps within each section and the same can be adorned by using different charts, templates or figures.
- Possible feedback on the initial draft version of the gap analysis should be collected and later different sessions should be organized in order to avoid the differences in the feedback.
- All the responses should be compiled and final version of the gap-analysis should be drafted so that all the responsible parties should be informed and necessary actions can be taken.
Writing a Gap Analysis Report:
John Galt, on Gap analysis says, “A gap analysis report seeks to benchmark the performance of an organization against target standards or goals. Any type of organization or business can be effectively analyzed using gap analysis methodology.” He also instructs in writing a gap analysis report, some of his instructions are listed below:
- Analyze the two set of data available and divide the same in different phases, if applicable.
- Identify the possible deficiencies in each phase.
- Determine if the available resources sufficient for the promulgated targets.
- Calculate the requisite resources to bring the performance up to the stated goals.
- Take feedback and devise a plan of action to plan the gap.
Stages of Gap Analysis:
Considering the instructions, mentioned above, the different stages of gap analysis can be listed as below:
- Review System: Reviewing the current information system, in order to understand the current processes, features and functionalities.
- Develop Requirements: It explains the strategic objectives that an organization wishes to implement and the development of the requirements needed by the “new system”
- Comparison: It deals with comparing the different attributes and features of the current and proposed processes.
- Implications: It describes the risks involved in the development of the new process.
- Recommendations: Taking the feedback and actions taken in order to fill the gaps described at above stages are considered under this stage.
Gap Analysis is one of the best procedures to help lead a company to not only improve their processes, but recognize which processes are in need of improvement. The organization must acknowledge and approve the differences between the company’s future needs and current competencies. As all the processes have their pros and cons, Gap analysis also posses the same. On one hand if it helps in getting comprehensive overview of the entire organization or any particular function within the organization and determining if the current available resources are suitable enough to meet the future expectations, it may also result in the increased project cost and timelines on the other hand. Gap analysis can be done by the particular team within the organization internally but if the external resources are hired to perform the same, it may result in the demoralization of the current staff and resources of the organization. But above all, the gap analysis is much esteemed and most acceptable technique which should be followed by all organizations at different levels as it helps in allocating efficient resources, planning the budgets and prioritizing the needs and requirements.