Gap Analysis: What is Gap Analysis, Example and Process

by StarAgile

January 20, 2021
Category Project Management


What is Gap Analysis? Explain with Gap Analysis Example

Gap Analysis is a process in which the current state is compared with the estimated or expected or desired results. Unlike forward-looking risk assessments, this compares the current state. Gap Analysis provides the basis for improvement in the process, strategies, capabilities, technologies, practices, skills, and structures, etc and recommends the steps to meet the desired goals or desired state. This helps the organization to quickly move towards the desired state from the deviated values. Hence the Gap Analysis is a comparison of the performance to the potential or the desired state. PMP online training at StarAgile talks about this topic in-depth and covers the PMP specified requirements also.

Gap Analysis can be done in various areas such as 

• Human Resources

• Technical and technologies

• For measuring deviations from the standards or baselines

• Financial Processes

• Sales

• Productivity Gap Analysis

• Employee and customer satisfaction

• Quality assurance

• Market competitiveness

• Cost control and budget measurement

• Energy usage and controls etc 

The list goes on that is Gap Analysis can be used in almost all the fields you can think of. Gap Analysis is the process when applied to business compare various parameters that made the deviation from the business goals. When applied to manufacturing the Gap Analysis tend to show the deviations from the actual and compares the deviation in the resources those are time, human staff, material, and money, etc.

There are various types of Gap Analysis; they are conceptual Vs concrete here in the conceptual Gap Analysis you need to make some assumptions that are required to measure the gaps, whereas in the concrete Gap Analysis you use real-time concrete data and facts to measure the gaps. The next one is the strategic Vs operational; in this type strategic Gap Analysis focuses at the organizational level and planning at that level, whereas the operational Gap Analysis is for measuring the gaps in the day to day functioning of the team or the department. In both these cases, we use the actual data and facts. Register for the PMP certification training at StarAgile institute and take your career to new heights.

Top 6 Gap Analysis Examples

1. Individual assessments - One can perform Gap Analysis on themselves on a certain standard and come out with the intrinsic and interesting reports to measure their performance and take action to improve their work

2. Launch of a new product - After the company has launched the new products it can do the Gap Analysis on the deviations from the sales objectives and make improvements if required.

3. Sales projection - A manufacturing firm can measure the sales performance of their products and find out a way to increase the production and to figure out the right product mix.

4. Software evaluation - A software company may perform the Gap Analysis on the difference between the features performance and expected values.

5. Supply chain management - Hospitals can evaluate their procuring strategies if they run out of supplies very often and quickly set it right.

6. Productivity - A company's productivity is not matching the required customer expectations or set business expectations a Gap Analysis can help set right the processes of the production.

So as we have seen the examples for the Gap Analysis, also the PMP training online at StarAgile covers this topic with real-world examples. 

Top 6 reasons as to why we require a Gap Analysis

1. Increase Profits - The main reason for any company to do the Gap Analysis is to increase the profits of the company such as the high cost of the product of beat the competitions.

2. To Benchmark the own products - You can do the Gap Analysis of your products with that of your competitors and do the Gap Analysis to benchmark your products in the market

3. Set right the Processes - The main concern in any organization are their processes, it is not easy to set right the processes without having the Gap Analysis.

4. Performance indicators - Gap Analysis in any resource serves as the key performance indicator, this serves as the reason for improving the performance of the resources or the processes.

5. Product portfolio analysis - An organization can do Gap Analysis in the market for their not selling products or the top-selling competitor's products to make a new product portfolio.

6. Selling gaps - This is the gap between the current market size of the products versus potential market sizes for the same products. By the Gap Analysis, one can know what to do the increase the market size of the products such as advertisements, discounts, etc.

How to do Gap Analysis and Gap Analysis Process

The steps for doing the Gap Analysis are listed below,

a. Identifying problems or situations or events.

b. Analyzing the current state of the problems or situations or events.

c. Identifying the potential or future state or the standards or the baselines.

d. Comparing the current state with the potential or future or the standards or the events.

e. Finding the gap between the future state and the current state.

f. Evaluate the solutions for each of the Gap Analysis results.

g. Create and implement the solutions to bridge the identified gaps.

Benefits of Gap Analysis

• Finding the weakness and strengths in certain areas

• Insight into various areas that need improvement

• Understanding the differences between the standards and actual and also between the perception and realities.

• It guides the decision-makers to make more informed data-driven decisions

• To find the best practices and the deviations so that the necessary place to focus energy

• To prioritize the needs of the organization

Challenges

• One needs to be knowledgeable to know the processes or the situations or the events very well

• If the events are very dynamic then the analysis may produce fall results.

• The actual reasons may be very complex or Gap Analysis may not have the required depth in the subject or events.

Top 5 Gap Assessment Models 

There are 5 Gap Analysis methodologies

1. McKinsey 7-S Framework - This Gap Analysis is used to compare the 7-S framework with the high-level view of the organization. The 7-S are 

• Shared values

• Skills

• Staff

• Strategy

• Structure

• Style

• Systems

2. SWOT Analysis - This stands for Strength, Weakness, Opportunities, and Threats. This model of Gap Analysis is used to make individuals and businesses understand the four parameters about themselves. You will get a list in each of the four areas.

3. Nadler-Tushman Congruence Model - This Gap Analysis breaks down the business processes into three groups such as,

• Input represents the input to the processes such as materials, equipment, people, operational tools, etc.

• Transformation is something that happens to the inputs. 

• The output is the finished products or goods or services etc.

By analyzing the above 3 you can come with all the pieces of the Gap Analysis and how each one works together.

4. Fishbone Diagram - This is also called a cause and effect diagram or the Ishikawa diagram. It determines what has caused or the root cause of any deviation that has occurred in the current state. 

 

Source – creately

5. Burke-Litwin Causal Model - This identifies the Gap in the processes that have been caused by both the internal and external factors. There are 12 categories used in the model they are as follows,

•Work unit climate

• Task and individual skills

• Systems

• Structure

• Organizational culture

• Motivation

• Mission and strategy

• Management practices

• Leadership

• Individual needs and values

• Individual and organizational performance

• External environment

Master this topic along with the tools by taking up the PMP course online at StarAgile.

Conclusion 

Finally, once you have read this article you may get some idea on the Gap Analysis topic. To know more and get certified in using this subject take up the PMP certification online at StarAgile institute. StarAgile also provides the free Gap Analysis template during the course training.