Note: This post represents the synthesis of the thoughts, procedures and experiences of others as represented in the articles read in advance (see previous posts) and the discussion among the students and instructor during the Advanced Analytic Techniques class at Mercyhurst University in September 2017 regarding Gap Analysis as an Analytic Technique specifically. This technique was evaluated based on its overall validity, simplicity, flexibility and its ability to effectively use unstructured data.
Gap analysis is a methodology that allows one to estimate the “gap” in between the current situation of a company and a specific goal of the company. Operational gaps tend to look internally, while intelligence gap analysis looks at the external environment and what their competitors’ strategies are. This highlights a fundamental difference in what is meant by gaps, where intelligence gaps are essentially missing pieces of a puzzle, while operational gaps are related to obstacles to be overcome.
- It helps to prepare preliminary list of gaps per scenario.
- Helps identify what areas to improve upon
- Essentially is an internal audit of the organization
- Gives a picture of “where you are” and “where you want to be” to provide estimates on how to close the gaps
- Help identify an objective and how to plan a course action
- Little to no evidence gap analysis is an effective methodology
- Gap analysis might generate misleading results, if the individuals carrying out the analysis do not conduct a proper trend analysis beforehand.
- Gap analysis doesn’t address complexities when analysis gaps
- Can lead to more operational based questions if not appropriately used
- Ignores the possibilities of biases if used incorrectly
- Typically will not be effective to use if company does not have the necessary resources
- Identify the strategic goal.
- Select most appropriate measure of potential gap (qualitative/quantitative).
- Make a list of triggers to which led to gaps
- Collect information about current state.
- Analyze difference between current state and goal.
- Compare situational difference between current state and strategic goal (qualitative).
- Calculate quantitative difference between current state and strategic goal (quantitative).
- Look at external environment in which the company is operating i.e. industry, competitors.
- Discuss what further topics and questions need to be answered in order to reach desired goals.
- Assign action for all gaps
Application of Technique:
To demonstrate the application of the Gap Analysis methodology, the class looked at an example case study depicting the gap in service quality between T-Mobile and AT&T. The class was instructed to research service coverage, plan prices, customer service, and product quality and compare qualitative or quantitative differences between the two service providers in those areas. Multiple areas showed both qualitative and quantitative areas with gaps. While going through the process, the analysis subtly changed from an intelligence exercise into theoretical operational brainstorming. Overall, while the analysis answered the initial question of what gaps existed between T-Mobile and AT&T, the methodology did not prove to be a valid way to increase analysis quality.
For Further Information: