Your Complete Online Guide to Conducting an Effective Gap Analysis: Part 1

Your Complete Online Guide to Conducting an Effective Gap Analysis: Part 1

11th February 2021

Every business exists to grow and thrive in their industry. And every employer and manager has aspirations for their organisation. However, you may not always achieve your goals. When this is the case, you’ll need to perform a gap analysis to understand where your business is at the moment, where you want to go, and what you need to do to close the gap between your desired and actual outcomes.

A gap analysis is necessary whenever a shortcoming arises. It is an integral investigative tool that will help pinpoint opportunities you need to implement for improvement. This guide contains everything you need to know about performing an effective gap analysis. Please read on.

Who Can Perform a Gap Analysis?

A gap analysis can be initiated by any member of the business who needs to determine how to improve the organisation. This tool can be used to assess the performance of an individual, a department, or the entire organisation. It’s the best way to look into what may have gotten in the way to prevent particular goals from being met.

Types of Gap Analysis

Gap analysis can be performed from several perspectives, hence the different types of analysis methodology. There are four common types available:

  1. Strategic/Performance Gap Analysis – this type is conducted to understand why the business failed to meet certain performance goals.
  2. Manpower Gap Analysis – is conducted to understand the variance between the actual number of personnel in a business and the required number.
  3. Product/Market Gap Analysis – is performed to understand the position of the business in the marketplace hence evaluating the gap between the budgeted and actual sales being made.
  4. Profit Gap Analysis – is conducted to understand the gap between the targeted and actual profit that a company is making from its sales.

How to Perform a Gap Analysis

Below is a step-by-step process to guide you through performing an effective gap analysis and identifying where you need to improve to bridge the gap between reality and your desired targets.

Step 1: Identify Areas for Improvement

This is the first step. You need to identify the areas you want to apply a gap analysis tool and understand what you intend to achieve out of it. This will enable you to assess the type of gap analysis required for the situation. For example, you may be interested in determining if your business needs to purchase more safety equipment, in which case, you’ll need to conduct a performance gap analysis. It’s important that you consider purchasing CE marked fabrications designed to meet EU health and safety standards.

Gap analysis may not be necessary if the problem is easily identifiable. But you can use the tool when the problem seems complex and you’re unsure of the solution. For instance, you can use a gap analysis tool when outlining your company strategy. When looking to begin your gap analysis, you don’t have to always wait until failure strikes for you to perform the analysis. You can perform proactive analysis where you look at ways to improve your organization, department, or individual employees as a way to ensure you stay ahead of the competition.

You’ll need to use measurable and trackable key performance indicators (KPIs) when identifying the gaps. Avoid assuming the necessity of a gap analysis unless you have quantifiable data. You don’t want to waste time and company resources.