A gap analysis is a method for discovering gaps between a company's present performance and its desired performance. This analysis, which can be quantitative or qualitative, is frequently conducted prior to launching an endeavor to "close" the gaps.
The gap analysis methodology is known by several names, including need assessment, need analysis, and need-gap analysis. Whatever you call it, the essential premise stays the same: identify and then solve the challenges that are holding your company back.
Two questions are addressed by gap analysis:
Where are we in terms of performance?
Where do we want to be in the future?
While the process begins with an introspective examination of present vs potential performance, it does not end there. To define your ideal state, gap research should involve outside sources such as industry benchmarks and your market's competitive landscape.
This type of 360-degree examination can be done at both the strategic and operational levels. You can examine your general business objectives or go down into specific processes or departments.
Following the first round of analysis—performance vs potential—you may discover that your outcomes exceed your expectations. The same can be said if your entire company is currently undergoing rapid expansion.
In these circumstances, the goal shifts from identifying difficulties to discovering success factors that can be replicated, applied to other aspects of your business, and eventually grown.
The technique of completing the analysis is the same whether you're reviewing difficulties or triumphs, human resources or logistical activities.
Gaps in research can take several forms, including:
The temptation with the gap analysis approach is to go big at first. Unfortunately, when you try to handle too much at once—to improve everything all at once—resources become stretched thin.
Prioritize the regions where there is either (1) the most beneficial impact or (2) the greatest discomfort.
This could be due to a variety of circumstances, including:
Once you've identified an area large enough to create an impression yet tiny enough to wrap your head and hands around.
Once you've decided on your areas of focus, the first step is to determine where you are now (performance) and where you want to go in the future (potential).
Let's use the following as an example:
Every gap analysis begins with self-reflection. Where are you right now in relation to the key performance indicator (KPI) that you're analyzing? The objective is to describe all of the characteristics—in this case, channels—that influence success or failure.
The qualities (and, hence, the analysis) can be quantitative or qualitative. When detecting potential flaws, it is critical to be detailed and factual. Depending on the gap being investigated, the necessary data can be gathered from a variety of sources, including:
The future state depicts the ideal condition in which you want your firm to be. For quantitative research, such tracking sales metrics, you would incorporate either data from the industry or expected sales (i.e., goals).
When preparing for the future, you want to be highly specific by establishing targets within a specified time period (e.g., raise sales by 40% overall by the end of Q3).
Defined quantitatively, gaps are straightforward. What are the numerical differences between where you are and where you want to be?
Qualitatively, this will take a bit more contemplation and collaboration.
Having discovered the gaps, the following step is to define each gap to better understand the reasons behind their occurrence.
If you’re now ahead of your targets, then it’s a perfect moment to assess what exactly made the outcomes possible and if there are methods to employ the same ideas in other areas of your firm.
Even a well-performing system may always be optimized, thus going through this stage is vital.
Gap. This one is easy. Simply carry over the gaps you discovered in the previous stage, starting with the most underperforming regions first. In our example, we’ve picked email, because that’s where the largest gap between performance and potential lies.
Description. The objective of a gap description is to capture all the relevant variables responsible for the gap. Therefore, the description has to be consistent with those states. These might either be quantitative or qualitative. However, more often than not, to address the reasons behind the gaps, you’ll employ qualitative descriptions.
Why? The tough question here is not how far your actual performance went below target, but why the gap exists. To be of any help, this list has to be specific, impartial, and relevant to the situation at hand. It helps to brainstorm plausible explanations of low performance, and then filter those down using tools like the “five whys” analysis.
The third and final phase in your gap analysis report is to brainstorm all possible remedies and reasons for the gaps. These remedies must be specific and have an immediate impact on the variables identified in the preceding phase.
To accomplish so, let us return to our previous multichannel focus:
By compiling a comprehensive list of solutions to the gap-description summary, you allow yourself to think broadly while positioning yourself for practical implementation.
When considering potential solutions, take in mind that there may be implementation expenses associated. These costs might involve both time and money, as well as human resources.
The "five whys" method is an iterative strategy for investigating the cause-and-effect links underlying a specific situation. Its major purpose is to determine the fundamental cause of an issue by asking "Why?" repeatedly, with each question establishing the basis for the next.
Although this approach is known as the "Five Whys," it does not require you to ask "Why?" five times. The goal is to repeat the process until the root cause(s) are identified. It may take fewer or more than five whys to get to the root of the problem.
Rather than going the multichannel ecommerce way, consider a circumstance in which clients are dissatisfied because they are receiving products that do not fulfill their expectations.
Because manufacturing used materials that differed from what the client expected based on advertising.
Because the supply-chain manager expedites operations on the shop floor by directly contacting the head of manufacturing to start production. When the specifications were being transmitted, an error occurred.
Because the "start work" form requires direct clearance from the supply-chain management before work can begin.
Because the manufacturer does not provide digital integration with your present ecommerce platform.
In this scenario, only four whys were required to determine that the gap was caused by a non-value-added signature created by a lack of integration.
Gap analysis in industry-focused research frequently include examining market trends, consumer wants, and rival offerings.
Understanding the industry's unmet demands and possibilities allows researchers to develop unique solutions and strategies to bridge these gaps and gain a competitive advantage.
Profit gap research can help ecommerce businesses find areas where they are underperforming financially.
A profit objective is set based on past performance or industry benchmarks. Profits are then compared to targets, and areas for improvement in revenue growth or cost cutting are highlighted. This study is used by ecommerce firms to make strategic decisions and increase profitability.
Several tools and techniques can be employed to facilitate gap analysis in research, such as:
Several methods and strategies, such as: can be used to facilitate gap analysis in research.
SWOT analysis is a strategic planning tool that helps organizations determine their strengths, weaknesses, opportunities, and threats.
It assists decision-makers in better planning and strategizing by categorizing internal and external aspects. The tool is used to create goals, analyze markets, and evaluate competitors.
A fish bone diagram, also known as an Ishikawa diagram or cause-and-effect diagram, is a graphical technique used to discover and analyze fundamental causes.
It enables teams to methodically investigate relevant aspects by categorizing potential causes and visualizing them as a "fish bone" structure. Many businesses utilize this type of diagram for quality control, process improvement, and problem solving.
The McKinsey 7S framework assesses the alignment of an organization's strategy, structure, systems, shared values, skills, and style.
These seven components work together to discover areas for improvement or change. This paradigm is utilized for organizational changes, mergers and acquisitions, as well as detecting and correcting performance issues.
The Nadler-Tushman model, often known as the Congruence model, assesses the fit between an organization's task, people, structure, and culture.
The tool examines the alignment of the four components to discover gaps, misalignments, and places for improvement. The model is used to assess organizational performance, to lead change activities, and to create new structures and processes.
Gap analysis in research has various advantages, including:
Despite its advantages, gap analysis in research has certain drawbacks and limitations:
Consider the following best practices for conducting effective gap analysis in research:
Finally, gap analysis produces a thorough study of:
Instead of using sheer force—or "shooting from the hip"—you'll have hard data to build your new products and efforts on, as well as a plan to guide you.
A gap analysis example is a comparison of an organization's current status to its desired future state. This is frequently done to identify areas that require improvement or where greater resources are required. An organization, for example, may do a gap analysis to discover and assess any disparities between its present customer service strategies, rules, and processes and what is required to achieve consumer expectations. The firm can then develop detailed action plans for improving customer service and ensuring that customer service objectives are accomplished.
No, a SWOT analysis and a gap analysis are not the same thing. A SWOT analysis is used to determine a situation's strengths, weaknesses, opportunities, and threats. A gap analysis compares an organization's present performance to its desired performance to discover any gaps.