Gap Assessment is an act of analyzing a business performance unit in order to determine its current state and also to know if the business objectives are met. Are you a business owner? You might have heard about Gap analysis/assessment, and you’re wondering what it’s all about. With this write-up, you will learn everything you need to know about Gap analysis for business. So I encourage you to read this content to the end in order to gain maximum knowledge on gap analysis.
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Gap Assessment
For businesses to keep moving forward, there should be gap assessment performance from time to time. This will enable businesses to know their state. Businesses get to identify the differences between their current state of business and where they’d like to be.
What is GAP analysis?
A gap analysis is an examination and assessment of your one’s performance for the purpose of identifying the differences between your current state of business. It also refers to the space between “where we are” as a part of the business (the present state) and “where we want to be” (the target state or desired state).
Importance of Gap Assessment Applications
In information tech, gap assessment reports are mostly used by project managers and process improvement teams as the starting point for an action plan to produce operational improvement. The business gap assessment also helps in benchmarking actual business performance so it can be measured against optimal performance levels.
Moreover, performance gaps can be measured across multiple areas of the business such as customer satisfaction, revenue generation, productivity and supply chain cost. Small businesses can benefit from performing gap assessments, especially when they’re in the process of figuring out how to allocate resources.
For software development, gap assessment tools can document services or functions that have been accidentally left out; which have been deliberately eliminated; and still, need to be developed.
When it comes to compliance initiatives, a gap assessment can compare what is required by certain regulations with what currently is being done to abide by them. While in human resources (HR), it helps to examine which skills are present in the workforce and what additional skills are needed to improve the organization’s competitiveness or efficiency.
How to conduct a GAP Analysis – Skill GAP Assessment
To conduct a skills gap analysis do the following;
- Establish specific target objectives by looking at the company’s mission statement, strategic business goals, and improvement objectives.
- Then analyze current processes by collecting relevant data on performance levels and how resources are presently allocated to these processes.
The data can be collected from a variety of sources depending on what is being analyzed. Take, for example, it may involve looking at the documentation, measuring key performance indicators (KPIs) or other success metrics, conducting stakeholder interviews, brainstorming and observing project activities.
So after the company compares its target goals against its current state, it can then draw up a comprehensive plan. Such a plan will outline a step-by-step process to fill the gap between its current and future states and reach its target objectives. It is mostly referred to as strategic planning.
GAP Analysis Template Components – Skills GAP Assessment
Here are the Features or components of the GAP analysis template;
The current state
The current state lists the processes, workflows, and characteristics an organization seeks to improve, using factual and specific terms. However, areas of concentration can be broad, targeting the entire business; or the focus may be narrow, concentrating on a specific business process. But the choice will depend on the company’s target objectives.
The future state
The gap assessment report also has a column known as the “Future State,”. This tool helps to outline the target condition the company wants to achieve. It can also be drafted in concrete, quantifiable terms, like aiming to increase the number of fielded customer calls by a certain percentage within a specific time period.
Gap description
The gap description column will first identify whether a gap actually exists between a company’s current and future state. If so, the gap description will outline what constitutes the gap and the root causes that contribute to it. Also, the gap description column lists those reasons in objective, clear and specific terms.
Next steps and proposals
This final column of a gap analysis report makes a list of all the possible solutions that can be implemented to fill the gap between the current and future states.
And the objectives must be specific, directly speak to the factors listed in the gap description, and be put in active and compelling terms. However, they should include clear objectives and a time frame for achieving them.
GAP Analysis Tools and Examples
There are different types of gap analysis tools and methodologies. The gap assessment tool a company uses depends on its target objectives. Here are some of the gap assessment tools;
McKinsey 7-S Framework
This gap analysis tool by consulting firm McKinsey & Co is used to determine specific aspects of a company that are meeting expectations. An analyst using the 7-S model assess the characteristics of a business through the lens of seven people-centric groupings: Strategy, Structure, Systems, Staff, Style, Skills, and Shared values.
So the analyst fills in the current and future state for each category, which would then highlight where the gaps exist. With this, the one company can then implement a targeted solution to bridge that gap.
SWOT Analysis
SWOT is short for strengths, weaknesses, opportunities, and threats. SWOT is a gap analysis strategy used to identify the internal and external factors that drive the effectiveness and success of a product, project or person.
The moment it identifies these factors, the company can determine the best solution by playing to its strengths and allocating resources accordingly, as it avoids future threats.
The Nadler-Tushman model
The Nadler-Tushman organizational congruence model examines how business processes work together and how gaps affect the operational efficiency of the organization as a whole.
This tool helps to identify these operational gaps by analyzing the company’s operating system as one that transforms inputs into outputs. It shares the business processes into three groups: input, transformation, and output.
The Nadler-Tushman model also focuses on how gaps in the outputs can point to problems in the inputs and transformation functions. This model highlights how the various components fit together or are congruent.
FAQS
What is the purpose of a gap assessment?
The key purpose of gap analysis is to help businesses develop an understanding of the gaps in their performance so that they can create effective strategies to reduce or eliminate these gaps and achieve their goals.
What is a gap assessment report?
A Gap Analysis Report is a comprehensive document that gives details of the gaps or deficiencies between the current and desired state and the action steps needed to best achieve the business goals.
What are the three 3 fundamental components of a gap analysis?
The three fundamental components of a gap analysis are:
- Current state: This is the current state of the organization, process, or product being analyzed. It is important to have a clear understanding of the current state before you can identify any gaps.
- Desired state: This is the desired state of the organization, process, or product being analyzed. This is the state that the organization is trying to achieve.
- Gap: This is the difference between the current state and the desired state. It is the gap that needs to be filled in order for the organization to achieve its goals.
Once the three fundamental components of a gap analysis have been identified, the organization can develop a plan to close the gap. This plan may include changes to processes, systems, or training.
