Written by Oddinigwe Onyemenem
According to the author, gap analysis addresses two questions in relation to the present state “where are we” and the target state “where we want to be” of a business. Gap analysis has various names used to describe it; however, its core principle is to find solutions to problems that are holding back a business. The process of conducting a gap analysis relies on the objectives of the business embarking on it. The process involves comparing current/actual performance with planned and/or desired performance. Furthermore, a gap analysis can be performed by evaluating results in comparison to industry averages to find gaps in performance relative to competition. Niggulis points out the tendency to attempt to close every identified performance gap which will be a mistake. He suggests prioritizing the gap by focusing on the gap that has the most immediate impact on the business.
The article identifies three main steps for conducting a gap analysis which is prefaced by identifying the area of focus for the analysis. The first step is identifying the current and future states which involve taking an in depth look at where the present business results and/or performance and the most desired result and/or performance. The second step involves identifying and describing the gap. Niggulis suggests using the “five-whys analysis” tool to narrow down the possible causes of the identified gap. The third step is bridging the gap. It is important to note that there may be costs involved in implementing the necessary steps to close the identified gap. A properly executed gap analysis gives a business the ability to identify problems, the causes of the problems, and possible solutions to go from the present state to the target state.
Niggulis explains gap analysis in a clear and concise manner. The identified steps are easily practicable for any business size. The article focuses on the main objective of a gap analysis, which is to get a business from where it is to where it wants or can be. Gap analysis provides an objective overview of the state of a business for decision makers. There is no concern for bias and it helps to uncover underlying issues that exist. In examining the areas of focus, it is important to remain consistent and avoid straying into areas that are out of scope.
The article fails to address any complexities that may be encountered by a business in conducting the gap analysis. In a situation where the implementation costs to bridge the gap for a business is way beyond the financial or human capabilities of the business, will the business shift its focus to less expensive gaps which will in turn result in less impact for the business or abandon the process? Some insights relating to such complexities that may arise will be beneficial to address. Overall, the article provides easy-to-follow steps and explanations about conducting a gap analysis for a business.