There have been times when business owners have faced the challenge of improving and optimizing an ongoing process or a business activity. In typical business environments, entrepreneurs generally come across situations where they have to analyze their current situation or business and compare it to the desired or future state.
In simple terms, gap analysis is the comparison of such actual business states with potential business state or performances. This analysis can yield a lot of insights into an organization’s performance and functioning. This simple tool helps businesses identify the gap between your current situation and the future state that they want to reach, along with the tasks that businesses need to complete to close this gap.
Compared to other business analysis methods, Gap analysis is more organic, quantitative and conceptual in nature, using traditional Excel sheets or flowcharts. It gives the analyst (or business owner) more freedom in choosing what to focus on. In management theory, if an organization does not make the best use of current resources, it may produce or perform below its potential. At a root level, Gap analysis identifies gaps between the optimized allocation and integration of the resources, and the current allocation level. Such analysis is generally done at the operational or strategic level of any business.
Here are the steps followed in a typical GAP analysis:
• Recognize the existing business process
• Find the existing outcome
• Identify the desired outcome
• Pinpoint the process to achieve the desired outcome
• Identify Gap i.e. the difference between the actual and the desired performance, Document the gap
• Develop the means to fill the gap
• Improve and prioritize Requirements to bridge the gap
Such GAP analysis should be done carefully and objectively to realize any potential gains. Gap Analysis is useful at the beginning of a project or process, especially when developing a Business Case , and it’s essential when we identifying the tasks that need to be completed to deliver the project.