Gap Analysis in Organizations: All you need to know
This article explains the process of gap analysis in organizations and the need for its implementation.
Wednesday February 06, 2019,
4 min Read
What is Gap Analysis ?
Gap analysis can be defined as an activity of determining the differences between the delivery of the standards and the standards themselves. Let us consider an example for understanding this better. An organization can get benefited from logging the differences between experience and expectation of a customer in providing medical care. The differences could be used to explain satisfaction and to document areas in need of improvement.
In the technological sector, a gap analysis can address various issues such as a missing technological capability or an incompatible system. This analysis is an essential feature of a competitive IT strategy for any kind of business.
In the gap identification process, an analysis must be done before and after the process. However, this can take various turns. Consider an example where we create a value stream map pertaining to the present process in lean management. After this, we design a value stream map pertaining to the state desired. So, here, a gap can be regarded as the difference between the two. A game plan can be devised once defining gap is done. This game plan will take the company to the state desired from its present state.
Working of Gap Analysis
Let’s say you have a certain number of sales you wish to reach by the end of the quarter, but the current numbers aren’t looking so good. Is this the fault of your sales team? Before you start replacing valuable members of your sales force, it may be wise to analyze all factors which could be turning customers away. In many situations, what business leaders think customers want actually differs from reality.
If your offering is not as appealing as you think it is, it may be time to analyze your target market thoroughly. With GAP analysis, you can identify these issues and implement an effective strategy to fix them, instead of blindly making changes which you think will improve the situation. However, keep in mind that using a business consulting firm for this process will yield better results.
Types of Gap Analysis
Gap analysis is of various kinds. Take for example, the management concepts of service are inspected by service design analysis in order to know how they need to get modified, while service quality is what the service quality analysis concerned more about, and yet the difference between the actual service deliver and service standards is what the service delivery is focused upon. This implies that various aspects of a single problem are explored by all kinds of gap analysis.
Steps taken during a Gap Analysis process
After discovering the gaps, you can take any of the following three steps.
- The objectives need to be redefined: If there exists any difference between forecast and objectives, then the organization’s senior executives must analyze whether they are achievable or not, and whether they are realistic or not. The organization must redefine them if they are set at high level intentionally.
- Remain Silent: This is considered at times, but is used only in rare cases.
- Modify the strategy: In order to close the gap between forecast and objectives, the company’s executives can go with modifying the strategy if the above-mentioned strategies cannot be implemented.
Tools for Gap analysis process
Many tools exist to help you bridge the gap. The major ones are listed below.
SWOT analysis - SWOT(the analysis of strengths, weaknesses, opportunities, and threats). SWOT will enable you to find out external as well as internal threats to your company and determines where you exist in the competition.
McKinsey 7S Framework - The McKinsey framework is actually a management model built by the business consultants working at McKinsey. The significance of this model is that it enable you to analyse whether your organization is meeting its previously set goals. It also monitors the modifications done internally in an organization.
Nadler-Tushman Model - The Nadler-Tushman is a powerful model for determining the root causes for the issues in performance. This is recognized as the beginning point of resolving these issues.
Every organization requires a gap analysis process to run its operations smoothly for cost-effectiveness and efficiency. It is up to the people to choose by exploring solutions to close the gap, and organizations must be in a position to welcome these changes.