Few feelings beat the joy of running and executing a successful business. Unfortunately, managing a business is the farthest thing from an exact science you will ever do. There are too many moving parts, including many people with varying levels of skills and commitment.
This complexity and many unforeseeable circumstances in the business environment often cause a deficit between targets and achievements.
This is where the Gap analysis comes in.
Gap analysis is the process of working out the difference between achievements and targets. It is applicable in all measurable business processes such as finances, marketing, customer service, etc.
Uses of Gap Analysis
- Conducting gap analysis enables a business to develop strategies that will allow it to meet its strategic targets in specific departments and for its vision in general.
- The results of your gap analysis are the foundation on which you identify problems in quality measurement parameters. Some of these parameters include;
- Expected services Vs. Perceived services
- Quality specs Vs. The leadership’s expectations of quality
- Communication to customers Vs. Service delivery
How to Conduct Gap Analysis
First, you need to identify the process you want to analyze and establish the proper parameters to use when measuring performance in your target process.
The third step in the process is casting the vision you want to achieve in the specific process for conducting the gap analysis.
Once you have calculated the difference between reality and expectations, you will need to develop strategies to bridge the gap.
Benefits of Gap Analysis
When well thought out, you can apply gap analysis for many processes where you want your business to grow. A gap analysis is an excellent tool for making a strategic plan for several years into the future.
Benefits vary from business to business. The nature of these benefits is informed by the character of the industry in which the company is engaged.
The following are typical benefits of gap analysis.
- It gives you a clear view of how your business operates currently
- It makes your strategic plans more effective since they are based on figures. You will know the difference between where you are and where you want to go.
- Gap analysis is a catalyst for foundational changes in business processes. Most of the strategies developed through this analysis are inherently equipped to identify problems and offer solutions quickly.
- The resources available to any company are usually inadequate, and deploying what is available where needed is an excellent way of making well-targeted allocations.
While gap analysis is a great tool, it can be counterproductive if it is not conducted well. Your business may base critical long-term decisions on wrong information, and this could be disastrous. Always ensure employees in all departments provide the correct information no matter how dismal it is. Data should go through several layers of verification to be sure.
The research you use should also be as extensive as possible to ensure that no critical data is missing. Take time to map out the information you need as soon as you identify the goal of your gap analysis.