Also known as Need Analysis and need Assessment.
Variants include Variance Analysis and McKinsey 7S.
A gap is a problem, issue or challenge, and could be an opportunity for improvement. Gap analysis involves assessing the difference between two things. It is mainly used to compare two different states of something, the current state and the future state. It can be used, for example, to assess where a company or process is today, where it needs to be in the future, and what needed to be there.
At the business level, gap analysis can be useful to identify the areas where a business is performing below quality standards or customer expectations. At the process level, gap analysis is used to address the unsatisfactory performance of a process. It is especially useful when comparing an existing process to a process that is performed elsewhere and provides an excellent opportunity to learn from industry leaders. This allows to determine if the process needs to be simplified, streamlined or redesigned all over again.
In project management, gap analysis can be used before starting an improvement project to justify the initiation of the project. It can also be used at the definition stage of a project which allows to better understand the business case of the problem. It brings understanding to the problems and indicates any potential opportunities and risks that could be faced during the implementation of the project.
There are many real-life examples where gap analysis can be applied. For example, If you find that your team’s skills are not adequate enough, you may perform a gap analysis to assess the current skill level and compare it to the desired level. Once you identified the gap, an action plan can be developed to close the gap and improve the skills of your team. It is common to use performance indicators when comparing the two conditions, and you may use these indicators at any point during the gap analysis process.
Gap analysis is more of a theory than a practice. There is no standard process to perform a gap analysis and it should be tailored depending on the situation and your needs. Various tools and models can be used to turn the theory into practice and identify the gaps including SWOT analysis, fishbone analysis, bottleneck analysis, SPC analysis and the McKinsey 7S model.
Typical Steps for Conducting a Gap Analysis
Gap analysis involves organizing information in such a way that allows for proper comparison and analysis. Such organizing of information can be simply accomplished using tables and charts without the need for complicated methodology or software. The following are the typical steps for conducting a gap analysis.
- Choose a specific problem area you need to focus on.
- Understand the current situation and know where you are standing.
- Identify the desired outcome that need to be achieved
- Identify the gap between the two states and analyze the causes.
- Agree on the steps you need to take to close the gap.
The following example illustrates the steps that have been followed to analyze why it takes too long for the food to be served in a restaurant. A fishbone analysis was conducted to identify the causes of the slow service delivery.
The following example illustrates the steps that have been taken to analyze the high spoilage rate at one of the production lines in a factory.
The following example illustrates the steps taken to analyze the reasons behind the low audit score after conducting an external audit.
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