[GAP Analysis] - What and How? - All You Need To Know

What is GAP analysis?

GAP analysis is a method of assessing the current business standard with the best standards in order to understand whether our business is meeting standard practice or lacking somewhere. It lies between where we are and where we want to be. It shows the gap between the ideal future state and its present state. By doing GAP analysis, an organization can act accordingly to move forward towards the goal. However, a gap analysis does not provide the action plan, it only provides the foundation of understanding necessary to create it.

GAP analysis often used by the project managers or product managers in order to identify the gaps causing the problem in the organization’s growth. It could be more beneficial for the small organization to keep improving the performance by identifying the GAPs and addressing them on time. The organization can use the maximum of resources, money, and technology. Simply it’s a process of analyzing the processes which need to be improved, finding the existing GAPs and based on result taking appropriate action to achieve your GOAL. It provides a foundation of measuring investment of time, money and human resources required to achieve a particular output.

How to conduct GAP analysis?

GAP analysis often conducted on a piece of paper with four columns, each representing Present state, Future State, GAPs and Recommendation/Solution. Before doing a GAP analysis, one needs to construct organizational goals. Effective goals are specific, measurable, attainable, realistic and with the timeline. Before starting gap analysis, all goals must be clear and quantifiable so that the gap can be measured.

To conduct a GAP analysis, you need to focus on the below elements:

Present State:

You need to understand the process/organization completely which needs improvement in order to understand the present state. It’s always better if the result of an analysis is quantitative or something which highlights trend and is comparable.

Future State:

In the future state, you need to find your goal by exploring your present position and where you want to go in the future? Like the present state, the future state could draft in quantifiable terms or something which could be compared with Preset State.

Identify GAP:

This column should first identify whether a gap exists between a company's current and future state. If so, the gap description should then outline - what constitutes the gap and the factors that contribute to it. A complete gap analysis can usually be summarized in one sentence.

Proposal/Solution:

This final column of a gap analysis report should list all the possible solutions that can be implemented to fill the gap between the current and future states. These objectives must be specific, directly speak to the factors listed in the gap description above, and be put in active and compelling terms. It should be like the executive summary that quickly gives the observed versus desired results for each goal category and then briefly addresses the reasons believed to be responsible for those gaps. Each goal should then be addressed fully in its own section, followed by a conclusion that summarizes the report and calls for action, usually in the form of a call to create an improvement plan to address the gaps.

SWOT analysis could be used as a tool to perform the GAP analysis as it gives you internal Strengths and Weaknesses as well as external Opportunities and threats to the organization.

Other Useful Tools For GAP Analysis:

• McKinsey 7S Framework:
• Nadler-Tushman model:
• "fishbone diagrams" or "five-why" analyses

Below is the standard template that could be used for GAP analysis:

Some Tips & Warning for GAP Analysis:

Gap analysis is often an iterative process. If you discover part way through the analysis that your goals are unrealistic or irrelevant, go back to the beginning of that category and rewrite the goal to make it more meaningful or actionable.

Be patience in representing solutions to address the gaps as it is the function of the improvement plan and one should take the time to fully understand and validate the performance gaps as well as the reasons behind them before finalizing the solution.

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