How would you know what you need to minimize, repair, improve, or change to push your organization to the next level? You perform a gap analysis. You may have many guesses on what’s going on, and the staff might have varying ideas on how to accomplish your goals. Instead of wandering around in the dark, a gap analysis leads you to a comprehensive review of where the organization is now and where you want to be so that you can operate on data, not speculation, to achieve your potential.
What is Gap Analysis
A gap analysis is a review and assessment of your current data to determine the gaps between the current level of functioning and your target goals. Undertaking a gap analysis will help you boost your business performance and profitability by enabling you to notice the “gaps” existing in your organization. After completing the gap analysis, you will concentrate your time and energy on the gaps identified to improve them further.
Why is it Important
The major purpose of gap analysis is to monitor the various aspects of the data project. It is essential because:
A gap analysis helps in finding any deficiencies that need to be addressed. It will be easier to measure or recognize them, and it can help in making adjustments. It also helps increase the productivity of your company. It’s going to pinpoint something odd that’s going on. When completed, you will be able to concentrate on what needs to be improved.
You can also use gap analysis tools for summarizing the whole organization or at least specific tasks. This lets executives see if the company has enough capital to accomplish its objective. Knowing the specifics that demonstrate how much a particular commodity or individual has gone down the road is essential. Therefore, you can use gap analysis as a way of comparing current results with potential.
The Gap Analysis method ensures that you can have more information about how to progress. For example, it may help control capital, i.e., income, product, or human resources, when used in production.
The gap between consumer preferences and customer experience results in customer disappointment. The measurement of these gaps is the first step towards improving customer loyalty. Also, strategic benefits are gained by achieving customer demands. Gap analysis is the method used to assess where companies meet or lag below consumer standards. Customer loyalty leads to re-purchase, and re-purchase leads to faithful buyers. Customer loyalty, in turn, contributes to improved brand value and higher revenues. Therefore, knowing customer expectations is essential to the business’ success. As such, gap analysis is used to close that gap between management and delivery, thereby improving customer loyalty.
How to Perform a Gap Analysis
Knowing how to perform a gap analysis is crucial for attaining the best results. The following steps will help you carry out a useful gap analysis.
Identify your areas of weaknesses
As part of the data collection process, determine and outline your needs evaluation elements.
Identify the following fields:
- What are your latest strategies and procedures? Are new techniques being implemented, or are they being completely ignored, and by whom?
- Conduct a customer satisfaction survey asking about quality standards.
- Hold a discussion to assess the organization’s current views of goods and services.
Collect all the data you can from the different departments that associate with your project or case. For example, if this is an evaluation to support your business and offer quality service, you should include the marketing and customer service departments. Sometimes, addressing questions about what, how, why, and when will give you enough information to do a full analysis.
Evaluate the current state
Suppose you have found where a gap analysis is required and the analysis’s objective; you can check where you are today. You decide the starting point for change by looking at the present situation.
For example; if you’re having user reviews about slow response times, find out the average speeds.
Collect all applicable data analytics and record all the factors that led to the present situation. In this report, be precise and thorough in assisting with the review.
Compare both situations
How big is the gap between the current state of your business and its objectives? It is easier to grasp the translation of collected data through a graphic presentation using a clear table document containing current practices and target goals.
Find the gap and assess the situation
Now that you’ve learned why there’s a gap in your department, it’s time to find out the best plan to close it using the following steps to ensure that the changes you have made are sound:
- Based on all the changes in the adjustments you’ve discovered when finding the gaps, for example, if the team is so busy with custom work, it will be hard for them to step back and formulate a new sales strategy. Perhaps if you stop doing custom work for a few weeks, your team will be free to develop a reliable product for your current target customers.
- Identify the target dates when you expect the gaps to be addressed – Without setting the end date to boost consumer service, it can be missed or ignored. Set a deadline for completion and then set benchmarks to ensure progress.
Establish a strategy to bridge the gaps
Decide what should be improved and what actions should be taken to make it right. In this case, the research team will decide that the structural problem is the easiest to solve and would have the most impact, so they may recommend ways to fix it. They will also consult with the supply chain and staff departments to make recommendations on these issues. They will summarize their proposals and bring them to the management to start preparing the adjustments.
Best Practices in Gap Analysis
When undertaking a gap analysis, there are various things that you may want to consider.
To start off, be logical about the places, products, strategies to assess, and the ideas to adopt. Changes by your staff or organization can influence others, so make sure you recognize these consequences while making your decisions.
Secondly, use charts to display your data. An image, as the saying goes, is worth a thousand words. By promoting your ideas with supporting evidence from your analysis, your organization is likely to follow them. Costs, capital, and effects must also be considered when proposing issues.
Lastly, allocate duties to ensure each part of the process’s manager guarantees that each task is done. After looking deep into the suggested solution, you’ll realize that it may not be easy to accomplish. Look beyond the obvious and see if there’s more to it.
Tools for Gap Analysis
There are several ways to define and interpret issues while doing a gap analysis. There are tools that you can use to undertake the operation. There are a couple of them outlined below. Every tool can be used as an organizing concept for both the causes identified and the proposed improvements. Looking for imbalances within groups or areas will also help you find underlying causes.
McKinsey 7S Framework
The McKinsey Paradigm consists of seven groups: policy, organization, structures, common principles, expertise, style, and personnel. An example of imbalance could be if a manufacturing line takes 15 people to function at maximum capacity, but only ten people have access to the cemetery shift. There is a mismatch between the programs and the employees in this case.
Follow these steps when performing a gap review using the McKinsey 7S tool:
- The potential state of the system/process that needs to be changed should be defined clearly.
- The type of the proposed change should be classified under one of the seven elements mentioned above.
- The remaining elements must be handled one at a time, and it should be assessed what changes should be made to this component to make a meaningful contribution to the accomplishment of goals.
Fishbone Analysis or the cause and effect diagram is another root cause analysis method that operates under the ’cause and effect’ principle, i.e., any action affects. We have to execute the right approach to have the desired result.
The following steps should be followed when using fishbone in gap analysis:
- Write the ideal condition or target at the head of the fish, facing to the right.
- On the left, list the main things that need to be done/features to be introduced to achieve the desired objective. These activities are written at the end of each rib of the fishbone diagram.
- Take one activity at a time and assess the tasks that should be undertaken under it. The assignments should be written to the divisions of the respective rib.
SWOT will carefully list the Strengths, Weaknesses, Opportunities, and Threats around your situation and then examine each of these considerations to see their effect on your project. SWOT is by far the most commonly used method for the review of gaps.
Follow these steps when using SWOT:
- Reflect and explain ‘Why’ SWOT is being done and the expected result
- List all related stakeholders who may add to the discussion of the above statement and then welcome them.
- Draw a 2 x 2 matrix on a whiteboard and mark each segment as ‘Strengths,’ ‘Weaknesses,’ ‘Opportunities’ and ‘Threats.’
- Hold a group discussion with stakeholders, asking them questions regarding their goals.
This model splits the company’s success into four categories: work, staff, structure, and community. Note the strengths and weaknesses of each region, and then compare them to other areas. The aim is to figure out if the work being performed in each part helps the others. For example, suppose a regulatory department conducts its activities at a high level and identifies situations that do not align with such laws and regulations. In that case, its management does not have the resources to enforce such improvements, the personnel, and the system are not compatible.
Burke-Litwin Causal Model
Burke-Litwin organizational change tool is a change model that demonstrates where change occurs and how it flows between various company areas. The model reveals the connections between 12 strategic, organizational, and individual factors.
Benefits of Performing a Gap Analysis
Gap analysis gives you a view of your company that you probably haven’t seen before. Based on the sort of analysis you do, the outlook may be quite focused and in-depth. It can be handled from an extensive-angle too.
It also enables critical decision-making processes and allows management to decide where their goals should be by helping them get a closer look at your current activities without the presumption that they are successful. By taking an analytical view, you will recognize which systems have outlived their functionality. Depending on the nature of the task, an analysis of the gap will immediately recognize the issue.
Effective gap analysis can improve the company’s efficiency and performance, resulting in better quality goods at a lower average cost. The gap analysis also calculates the amount of time, money, and energy taken to achieve the organization’s potential to reach the overall goal.
Download Free Templates
An organization may use a gap analysis to assess where it does not function optimally, identify the root causes and start preparing for improvement. When you perform a gap analysis, you can use it to evaluate a work applicant’s profile, an individual looking for a raise, or to determine preparation needs. You can find several gap analysis templates on our website that you can download and customize to fit your business’ needs.
The gap is the difference between where an organization is and where it wants to be.
The Gap Analysis takes roughly one day for most companies. This however, depends on the size of the company and the factors being reviewed.
Many of us have a rough estimate of where we’d like to take our company. But it can often be challenging to know when and how to start. This is where the gap analysis process plays its role. Gap analysis is a great strategy analysis technique that gives us a broad framework to identify not only where we are now, but most importantly, where we want to be and how we are going to get there. In reality, doing a gap analysis for your company is relatively easy. The assessment of strategic planning gaps is one of the easiest ways to start thinking about your priorities in an organized and reasonable manner.
The most significant advantage of a gap analysis is that it allows you to think about your present situation, your ideal future state, the differences between the two, and your action plan in a very straightforward and systematic manner. It also offers a forum for stakeholders to come together to develop a strategic plan. One of the challenges of getting many individuals interested in strategic planning is that the varying approaches may often be contradictory. A gap analysis template resolves this by asking people to answer concrete questions that can be pulled together in a coherent strategic strategy.