What is gap analysis?
Business gap analysis can be used to help achieve certain goals. This analysis includes a description of the company's current situation and what the company wants to achieve in the future. The difference between these two elements is the gap. The analysis includes specific action steps the company must complete to close this gap and achieve its goals.
For example, Company X is the largest distributor of dolls in the state of New York. Company X wants to be the leading distributor of dolls across the United States. Company X completes an analysis that illustrates how it became the leading doll distributor in New York. This includes an overview of all aspects of the business that contribute to the success of Company X, including marketing, accounting, information technology, administration and other departments.
Company X would then explain the benefits of achieving its goal of becoming the largest distributor in the country. Objectives must be specific and measurable. In this case, Company X will become the main national distributor of dolls in three years. Company X would then study what it needs to do to achieve this goal. The result of Company X's analysis would be a comprehensive plan, or gap analysis document, that includes information on how to become the leading national distributor of dolls.
The analysis may include a review of business documents, files and financial information, as well as interviews with employees from various departments. Once all the information has been collected, a gap analysis report is created. This document typically includes an introduction that states the purpose of the analysis and the methods used to complete the study.
The introduction is usually followed by a summary of the current situation, the goals the company wants to achieve, and the detailed plan to achieve those goals. That plan would include detailed action steps for each area of the business, a timeline for completing each step, and a budget outlining how much the plan will cost. An appendix of documents in support of any claims or statistics may also be included in the final document.
The next step would be for management to approve the action plan and budget. If approved, the plan is put into practice. Tracking each step is necessary to ensure the plan stays on schedule and on budget. If successful, the company will meet the target set out in the gap analysis report.
Companies can use gap analysis to achieve company-wide or specific department or area goals. For example, a company that wants to reduce overhead costs might complete a financial gap analysis. Or a company that wants to expand its product distribution might create a marketing analysis. Gap analysis can help companies stay competitive and help assess a target's potential profitability. This can help management and staff understand and get excited about the plans outlined in the review.