Gap Analysis

Contents 1 Application 2 Procedures 3 Instructions    3.1 Example 4 Benefits 5 REFERENCES

"A set of techniques to examine and describe the gap between current performance and desired future goals."

Gap Analysis is the comparison of actual performance with potential or desired performance; that is, the current state and the desired future state.

An important aspect of Gap Analysis is identifying what needs to be done in a Project.

Gap analysis can be used in many areas, such as:

• Sales
• Financial performance
• Human resource management
• Productivity
• Quality assurance
• Cost control
• Employee satisfaction
• Energy conservation
• Market competitiveness
• Technical skills
• Manufacturing or Production
The list is endless….

The gaps can include the following:

• the difference between the current operation of an activity and the activity vision, sometimes referred to as "C delta V" (current gap vision)
• the difference between actual and theoretical targets, sometimes referred to as "A delta T" (actual gap target)
• the difference between actual performance measures and world class benchmarks (see Benchmarking)

In addition to an overall enterprise vision, visions may be expressed for individual and core sets of activities, such as logistics, procurement, product development, or customer engagement. The "C delta V" technique is useful to summarize the results of a gap analysis. The vision statements for a set of activities should conform generally to the criteria for the enterprise vision as a whole (see Content Analysis), but, more importantly, should be as specific as possible with respect to targets and measures.

The "A delta T" technique is useful to summarize the results of either a benchmarking study or the results of activity simulations, where actuals can be compared to various targets. For example, during a cycle time analysis of an activity, it may be theoretically possible to fulfil a customer order in four hours, using a variety of methods. Tests of the new methods may only show a fulfilment time of five hours. One or both of these measures can be compared against the current cycle time of one business day. (See Cycle Time Analysis and Simulation.)

Application

• To compare the current actual performance of an activity to either its theoretical target or its vision.
• At an organizational level to analyze processes based on strategic goals, or to assist with developing a strategy to move the organization from the existing state to an envisioned future state.
• Forms the basis of the service quality measuring tool, which identifies the five gaps as
- Customer expectations vs. managerial perceptions - Manager’s expectations of quality vs. quality specs - Communication with customer at point of service or sale - Service delivery vs. communication - Perceived services vs. expected services

Procedures

1. Select and confirm activity to be analyzed.
2. Review activity profile information and describe key aspects of the activity in terms of measures of performance.
3. Develop a vision for the activity and/or identify targets to compare current performance.
4. Compare the degree of gap and describe as appropriate.
5. Determine actions required to get to the vision.
6. Summarize results.

Instructions

Confirm the scope of the gap analysis. Review all available activity information, relying on the activity profile (see Activity Profiling) and other sources if required. Confirm the key aspects on which comparisons will be made (e.g., cost, time, customer satisfaction, etc.), and determine required measurement activities. (See Quality Measurement and Benchmarking.) Using a table, matrix, or graphic similar to the example shown below, describe the key points about the current operation and/or performance of the activity being analyzed. Conduct research, and/or collect measurements to provide the key details.

Use brainstorming or other appropriate visioning techniques to identify the key elements of vision, if performing a "C delta V" analysis (see Brainstorming, Content Analysis, and/or SWOT Analysis). Use benchmarking, simulation, or other appropriate techniques to determine theoretical or desired targets in the key performance areas, if conducting an "A delta T" analysis. Describe the differences, and identify the actions required to reach the vision or target, using an appropriate technique such as Force Field Analysis, Brainstorming, and/or Transition Planning. Be sure to include all aspects of change: managerial, operational, social, and technological (MOST).

These actions may be summarized in terms of milestones, based on an appropriate time line, after they have been developed. Present as required.

Example



Benefits

A Gap Analysis can help understand and prioritize business needs by helping identify any deficiencies or shortcomings that need to be overcome. Once gaps are uncovered, it becomes easier to quantify them and identify the work effort that will be required to address them. From here, you can help prioritize them so that the greatest gaps can be addressed first.

A Gap Analysis can give decision makers a comprehensive overview of the entire company or particular function such as accounting, information technology or operations. This allows directors and executives to determine whether the department or organization has the resources to meet their mission, goals, and objectives.

The Gap Analysis helps the business focus its efforts and make informed decisions. In addition, a company can allocate limited resources and design efficient budgets by taking into account its main concerns. Priorities are categorized as high, medium and low; the classification does not necessarily mean the priority has a higher ranking over others for attention or resources but may help when conducting further investigation into issues. The gaps between expectations and experiences generally lead to dissatisfaction. Therefore measuring these gaps is the first step to stakeholder satisfaction. Having the realistic ability to reach identified strategic goals and targets puts you, your team and your organization at a distinct advantage. This inevitably leads to better projects, enhanced reputations, more business and higher profits.

This also applies to internal customers – organizations staff! If there are gaps between their expectations and work experiences this can lead to low morale and poor productivity. If the same values and goals are shared across the organization, success will ensue. An efficiently conducted gap analysis looks to improve the entire operation and ethos of the business. Employees are better motivated, more projects can be successfully closed in a shorter time frame – project life cycles can be positively impacted. Risks and losses can also be mitigated or eliminated.

Gap Analysis provides a clarity on where you are and where you could go, baselined against project delivery best practice, that can add real value to your business.

REFERENCES

How to Execute a Gap Analysis
Business Gap Analysis