A gap analysis is an assessment of your recent performance in order to identify the difference between the current state of your business and where you would like it to be. A gap analysis report presents a scrupulous observation of the objectives and vision of a business and the way it functions and manages its assets at the present time.
This document assists in the management and other stakeholders to understand the gap between the current business state and what it aims to achieve.
Importance of a Gap Analysis Report
The aim of conducting a gap analysis is to evaluate the differences between the current business state and where you would like it to be. You can also find out what caused these differences and come up with ways to match the ideal target in the range of real-world outcomes. Below are the reasons for conducting a gap analysis.
In the case where a target profit has not been attained, a company can conduct a gap analysis to find out what went wrong and whether it was in the planning and implementation. The organization can check out whether it was paying more than expected for the raw materials or whether it slashed its prices due to stiff competition, among other factors.
2. Portfolio Analysis
A company can conduct a portfolio on its products to search for new sales opportunities. A gap analysis can be conducted to identify new products to sell and also look for existing goods that are not selling well.
A gap analysis will be used to tell why, and the company can then promote them by offering discounts and other promotions to meet customer needs or remove them completely from their portfolio.
3. Performance Indicators
You can apply gap analysis to key performance indicators such as average order amount, customer acquisition, or returns on investment. For instance, an IT company can find out the reasons that caused them to fail on customer acquisition goals.
Before Using the Templates
When implementing a proper gap analysis report template you must follow the four steps below:
Establish strategic objectives: Explore the mission statement, compare target goals with current performance, and find out what needs to be improved? Example: Increase productivity by X amount in X amount of time. Lower defects by X percent within X amount of time.
Analyze the current process: What is the current status? Where are the deficiencies? Collect data, observe activities, and/or conduct interviews to determine what factors are causing the gap in the current condition compared to desired future goals. Compare the current versus potential business operation.
Create a plan of action: Produce a comprehensive plan to achieve target goals after examining and evaluating the preparation process. What solutions can be put into operation to fill the gaps found in the analysis? What can be implemented to narrow or close the gap?
Back up your plan with data and analysis: After establishing objectives, conducting proper research, planning and implementing the new or modified process, collect data to evaluate if the plan is working and modify unreasonable goals if needed.
Gap Analysis Report Templates
Safety Gap Analysis Report Template,
Data Gap Analysis Final Report (Example),
Data Gap Analysis Report (PDF),
Benefits of a Gap Analysis Report
When a gap analysis is conducted correctly, it can be applied in a wide range of situations where an organization wants to improve. There are many advantages associated with a gap analysis, including:
- Allowing staff to quickly identify problems and come up with solutions through integrated changes in business practices.
- An in-depth consideration of how your organization works and areas that need improvements such as customer satisfaction, competitive advantages, performance, and profitability.
- Making better use of the organization’s finances and assets.
- Coming up with strategies on how you want your organization to look and how to reach that point.
- Finding the best areas to deploy finances and assets.
When evaluating gap analysis, you may encounter some challenges, which include:
- Lack of field data due to constant shifting in the “real world” and problems in tracking fine-scale units.
- You may fail to conduct an in-depth search of the causes of the problems and the resolutions; hence you will not address the real cause; thus, the resolutions will not fix the problem.
Tips for Gap Analysis Report
In major companies, gap analysis is entitled to business analysts, improvement teams, and project managers. Some organizations may have their own process of gap analysis. However, we can look at some of the basic tips.
1. Identify the area to be studied and the target goals
For instance, you may want to find out why your company is not meeting the output goals. The aim will be to find the contributing factors and the resolutions to take.
2. Establish an ideal future view
What if everything worked out as planned, where would the company be?
3. Analyze the current situation
You can find the causes that resulted in the target being missed. For example, the disbursed funds were not enough or the staff was not well trained.
4. Compare the present state with the ideal state
What is the deviation from the actual production? For instance, the company produced 100,000 tonnes per year instead of 250,000 tonnes yearly.
5. Summarize recommendations
You can decide on what needs to be changed and the steps to follow to fix the issue. Your staff can summarize the ideas and present them to the management to work out on improvements.